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bne IntelliNews – Russian retailers launch ‘parallel import’ e-sales

Russian retailers have started importing electronics using “parallel imports” which source from middlemen and allow them to ignore the wishes of intellectual property owners.

Russian phone retail chain Svyaznoy is the first major retailer to confirm the start of electronics imports through parallel imports.

The chain will add to its offer about a hundred products which appear on the list of parallel imports. Last year, Russia imported 30 million smartphones, but following the imposition of self-sanctions (with phones specifically excluded from sanctions lists), most major brands pulled out of Russia. The shift to parallel imports means that Russian retailers cannot deal directly with manufacturers and will necessarily have to import products in smaller batches, driving up prices.

Svyaznoy said the devices will be 10-20% more expensive than similar devices imported before the start of the war in Ukraine. Another major change is that phones cannot be sold under warranty.

Other major retailers are expected to soon follow Svyaznoy into the parallel import business, bringing Russia’s trade regime for high-end consumer goods back to what it was in the 1990s.

Major Russian e-commerce markets plan to streamline their sourcing of so-called ‘parallel imports’ for goods no longer officially distributed in Russia as brands pull out of the country amid military invasion from Ukraine, Kommersant reported daily.

Meanwhile, the previously booming e-commerce sector was hit by the fallout from the invasion, as major local markets reportedly demanded state support from the government.

Other top e-commerce sites will follow, but have yet to explicitly comment on their plans. Yandex.Market plans to create a new procurement department which will be responsible for creating parallel import supply channels for household appliances, power tools, electronics and health products, Kommersant claims, citing unnamed sources and new job postings posted by Russian internet major Yandex’s e-commerce marketplace. The first batch of foreign-branded electronics and household appliances has already arrived at the warehouses of Yandex.Market, Kommersant say the sources.

Russia’s largest e-commerce platform Wildberries and electronic fashion major Lamoda have yet to make a statement.

The Duma approved the law on parallel imports on June 21, making the practice legal, which was previously banned as Russia struggled for years to eradicate privacy and improve intellectual property rights. The introduction of parallel import legislation was proposed almost immediately after the imposition of sanctions in March and an effort by the state to keep the population with all the material comforts of capitalism to which they have grown accustomed.

A representative of Svyaznoy said that the company will buy Samsung smartphones, the latest generation iPhone, as well as PlayStation, Xbox and Nintendo game consoles. No details were given on which company or country will be used as a middleman, but analysts believe Turkey will become a major conduit. Serbia is another possibility.

Svyaznoy plans to substitute its own official warranty for that of the producer to reassure customers and provide customer service.

KommersantThe company’s source said, “All these products are for Eurasian Economic Union (EAEU) countries only, so there will be no problem activating the device. [as was the case with some Samsung smartphones]. The service covers all devices. As before, the warranty service will be carried out by the service center, but if before the manufacturer bore the costs, now the distributor will pay,” Svyaznoy explained.

The retailer will likely have to repay the money for faulty devices out of its own pocket, as it no longer has manufacturer protection, as it used to, experts say.