McDonald's restaurants in Russia were renamed Vkusno i Tochka in 2022. Photo: KIRILL KUDRYAVTSEV/AFP
The departure of Western Brands from Russia after Vladimir Putin's invasion of Ukraine was supposed to change everyday life in Moscow. On the contrary, it provoked the appearance of twins.
The Starbucks stores were bought by a group of local businessmen, including famous Russian rapper Timati, and have since reopened under the name Stars Coffee. The logo still depicts a mermaid, but instead of a crown, she wears a Russian headdress.
“Your name is asked to be written on a cup, your name is shouted out. Everyone who works there is the same,” says Johnny Tickle, a Brit who lives in Moscow.
According to the Kiev Business School, almost 1,500 Western companies have either completely left or are in the process of leaving Russia. Economy.
But their products, although sold through entirely separate businesses, are still widely present in everyday life. Some of them are imported, while others are outright copies. One way or another, the Russians quickly moved on to making a profit.
“Most products and services or suitable alternatives remain, even if at higher prices and worse quality,” says Tim Symington, head of the research newsletter about Russia.
Russian businessman Alexander Gorov bought McDonald's outlets and renamed them Tasty and Tochka, which translates to Tasty, Full Stop. The Big Hit is being sold instead of the Big Mac.
Philip Arkwright, another Moscow resident, says the quality has deteriorated. “There is a small segment of people who refuse to visit the new “Russian” McDonald’s,” he says. But the restaurants are full.
The logo for Stars Coffee, the brand that replaced Starbucks, still features a mermaid, but with a Russian headdress. Photo: NATALIA KOLESNIKOVA/AFP
Yum! Brands, the parent company of KFC, sold its Russian KFC business to the Russian company Smart Service, headed by Konstantin Yurievich Kotov and Audrey Eduardovich Oskolkov.
The restaurants are being rebranded to Rostik’s. “The dishes we make are completely the same as in KFC,” Kotov told RBC.
Rostik corporate identity is also red, black and white, in the same style as KFC. At the opening of one of the stores, a giant cake in the shape of a chicken bucket of popcorn was presented.
There is a surreal parallel to the mass privatization of state assets in the 1990s after the collapse of the Soviet Union.< /p>
Just as the new oligarchs amassed wealth by taking over state property, Russian businessmen are now rapidly acquiring Western assets, supply chains, customer bases and business networks at low prices.
Russians have acquired assets from 110 Western companies that have left the country.
Their total value, measured by their net assets at the end of 2022, was around 35 billion euros (£30 billion), according to an analysis by Novaya Gazeta Europe, a long-established Russian opposition newspaper that closed in Moscow in March 2022. Latvia.
These purchases are usually made at deep discounts. In some cases, factory assets were sold for the symbolic price of €1. According to New Europe, Russia's richest businessman Vladimir Potanin, who is under UK and US sanctions, has acquired about 16 billion euros worth of assets.
But even if brands have not sold their assets, companies are moving to to fill the gap they left behind.
“Stores are realizing that companies may have gone, but people still want (their goods). Capitalism has won. It's just someone else cutting down the middle,” Tickle says.
Ads for Mamba, a Russian dating app, can be seen at bus stops after Tinder's release. “It's always been, but it's not cool. No one has used it since Tinder came along. I think now they are trying to make it cool,” says Tickl.
Swedish furniture store Ikea has left Russia for good, but now Russians can buy flat furniture from the Belarusian company Swed House, which brands itself in iconic yellow and blue colors.
An Ikea spokesman said: “IKEA has nothing. to do with the “Swedish House”. We see that they are trying to jump in and serve IKEA customers and that they are clearly inspired by IKEA.
Belarusian company Swed House stepped in to fill the void left by IKEA in 2022. Photo: SOPA Images/LightRocket
Inter IKEA Systems B.V., which owns IKEA's intellectual property, is exploring “potential actions” to enforce trademark rights.
Even Barbie mania swept Moscow. Bars and clubs across the city have hosted theme nights calling for pink fancy dress, Tickle said.
The recent film will not be released in Russia, but local voiceover company Red Head Sound has announced that it will dub the film. “There’s a weird quirk in Russia where actors are cast in their first movie, they’re given a voice—usually one voice actor works with a western actor for their entire career,” Tickle says.
Margot Robbie's Russian stunt double is Tatyana Shitova.
Ironically, as stores changed their supply chains, some new Western products appeared for the first time. “In fact, there is something here that was not here before. I have never seen a Wispa chocolate bar before. Now they're everywhere,” says Tickl.
Mondelez, the parent company of Cadbury, which makes Wispa bars, continues to operate in Russia, claiming that its operations will simply be taken over by another entity. Its goal is to spin off its Russian business into an independent structure by the end of the year.
The company said that Wispa bars are made in the UK and are not exported to Russia, but enter the country “through a third party, which, unfortunately, is beyond our control.”
Last year, Putin introduced a program of parallel import, which allows you to import goods such as warships and consumer goods that were originally sold in other markets.
Thanks to the free trade agreement in the Eurasian Economic Union, Russians can get goods through countries like Armenia and Kazakhstan, whether or not Western producers have agreed to this.
Coca-Cola has also left Russia. However, Coca-Cola HBC, the bottling company, is still in the country, but has renamed its Russian division Multon Partners and switched to producing another local soft drink called Dobry Kola (Good Cola), which is sold to stores.
Coca-Cola is still widely available in Russian stores along with Dobry Kola, a local soft drink
But often, Russians can still get the originals. “You go into the store and you see this Good Coke, and next to it there will be something normal from Kazakhstan,” Tickl says.
Imports come from countries such as Georgia, Armenia and Azerbaijan. “There are also Coke with labels written in Arabic,” says Tickle.
A Coca-Cola spokesperson said: “We have not authorized the import of Coca-Cola brands into Russia. Our actions to prevent unauthorized imports are limited by regulatory factors related primarily to free trade within the Eurasian Economic Union.”
According to the estimates of the Federal Customs Service of Russia, as of December last year, within the framework of parallel imports from March 2022 imported goods worth $20 billion.
The data shows a dramatic change in Russia's trade routes.
Tatiana Orlova, Lead Emerging Economist at Oxford Economics, says the dollar value of exports from the UK, US, France, Germany to Russia fell 44.6% between January and May, 73. 2%, 46% and 42.7% year on year respectively.
Exports from China, India and Turkey grew by 70.1%, 65.7% and 129.4% over the same period. Exports from Armenia grew by 234%.
But the costs became prohibitive. “These imported versions of Coca-Cola cost two or three times more than they used to,” says Arkwright.
Some people are turning to private import services, paying people to drive used cars from Europe because it's cheaper than buying new cars from dealers, says Arkwright
But even this tactic cannot compensate for the loss of a weak currency. “Two years ago, a good used BMW SUV could be bought for about 3 million rubles, and today the price has doubled,” says Arkwright.
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