Chinese smartphone manufacturers, as well as U.S.-based tech giant Apple that has production facilities in China, have delayed the supply of their products to Russia for two weeks because, amid a prolonged New Year vacations in Chinese factories due to the coronavirus outbreak, Kommersant reports.
A multiple-week delay may create a certain gap in the market and lead to a 10-15% rise in prices but it will also help retailers sell their stockpiles, the business newspaper writes.
Chinese brands are important to the Russian market. One in two smartphones purchased in Russia in 2019 was Chinese-made, according to data provided by retailer M.Video-Eldorado retailer. The size of Russia’s smartphone market stood at 495 billion rubles ($7.8 billion) in 2019 with China’s Huawei and Honor companies occupying one-third of the market.
If the delay does not exceed two weeks, it will have no significant impact on the Russian market, Head of the Mobile Communication Department at Marvel Distribution Pavel Vyukov pointed out.
However, if the delay lasts two to five weeks, a shortage will emerge, but it may actually benefit business, making it possible for distributors and retailers to sell their stockpiles, he added. However, if the suspension exceeds six weeks, serious negative consequences are possible, Vyukov noted.
The hold-up in deliveries may push smartphone prices up 10-15% by the end of February, but the newest smartphones models will start to sell out by mid-March and stockpiles will come in handy, said a leading analyst at Mobile Research Group Eldar Murtazin.
A rise in prices will reduce the demand because consumers are used to the fact that smartphone prices in Russia are among the cheapest in the world, the expert pointed out.
“It will reduce the retail turnover, negatively affecting the market,” Murtazin emphasized.