MOSCOW (Reuters) – Sales at M.Video-Eldorado, Russia’s top consumer electronics chain, dropped 14% in 2022 as the industry was hit by the impact of Western sanctions, a company presentation for an upcoming bond placement showed on Wednesday.
The West moved to curb technology exports to Russia after Moscow sent tens of thousands of troops into Ukraine last year, while several leading manufacturers pulled out of the Russian market.
M.Video-Eldorado said Gross Merchandise Value (GMV) – a measure of all goods and services sold by the company, including on its online marketplace – fell to 489 billion roubles ($5.96 billion) in 2022. In 2021, GMV was 571 billion roubles.
The company cited high volatility in sales of household appliances and electronics. Prices for technology products rose significantly in Russia last year after Moscow launched its military campaign in Ukraine, while a cost of living squeeze and general economic uncertainty also made consumers hold back from some big-ticket purchases.
The overall size of the electronics and appliances market in Russia dipped from 2.5 trillion roubles in 2021 to 2.3 trillion in 2022, M.Video estimated in the investor presentation.
Russia launched a so-called parallel import scheme which allows companies to bring specific goods into the country without the licence holder’s permission to try to maintain the flow of Western goods.
But M.Video said the share of products available from brands that have cut their activity in Russia – including Samsung, Apple, Bosch and LG – fell from 52% to 32% last year.
Industry and Trade Minister Denis Manturov on Wednesday told lawmakers that the share of Russian-made products should double this year and account for 70% of the market by 2030, Russian news agencies reported.
In 2023, the market has been showing signs of recovery, said M.Video-Eldorado COO Sergei Li, who expects the company’s EBITDA margin for the first quarter to be at least 4%.
With government support, Russia’s retailers have also moved to boost their sales of electronics from countries that have not imposed sanctions on Russia, such as China, Turkey and India.
($1 = 82.0000 roubles)
(Reporting by Olga Popova, additional reporting by Alexander Marrow; Writing by Jake Cordell. Editing by Jane Merriman)
