Alexey Popikov, Director of the Shopping Centers Department at Becar Asset Management, on the Possible Return of International Brands to Russia
For over 20 years, we were deliberately accustomed to Western brands - from H&M to Uniqlo. Therefore, it is only natural that our consumers want them to return. Shopping centers are also waiting for them, as these brands used to generate additional and very good traffic. IKEA, for example, has stated that if it returns, it will be the very last to do so. However, the company could very well operate, as it does in Saudi Arabia, through an intermediary - a third party.
No one – neither zoomers nor millennials – has managed to adjust in these three years. And the brands that weren’t represented and came to replace the beloved ones have not been understood. They have worse quality and higher prices. They are losing on all fronts.
Believe me, 95% of the brands will definitely return. Moreover, some, like McDonald's, had an option for return written into their contracts. Others will simply push out competitors with aggressive price cuts. They will start offering such comfortable terms to the owners that they simply won’t be able to refuse, knowing the traffic they will bring with them.
Some may argue, saying that this will slow down the development of our production. But, first of all, there has been no breakthrough in the development of our production in the past 3 years. And secondly, much of it was already being produced in our factories, just under foreign brands.
Therefore, the return of brands is beneficial to absolutely everyone: to the brands themselves, for whom Russia is a small but strategically important market; to consumers, who long for quality and affordable goods; and to our productions, whose products will be better sold.