If since the beginning of the Russian invasion of Ukraine, the percentage of companies that closed operations in Russia has risen sharply by mid-March, in the last month the ratio of those who leave or stay is virtually unchanged. although we still see a periodic increase in the share of those companies that remain in the Russian market. However, about 40.3% of foreign companies have already announced their withdrawal from the Russian market, but another 40.4% are still remaining in the country, 17.5% are waiting and only 1.8% made a complete exit⁴.

More infographics and analytics see in a special section at the link https://leave-russia.org/bi-analytics

THE KSE DATABASE HAS BEEN SUBSTANTIALLY UPDATED, DESCRIPTION OF THE MAIN CHANGES

This week, KSE Institute significantly expanded the list of companies, adding 422 new ones. Where do new records come from and how do we expand the database?

There are hundreds of thousands and millions of companies in the world. Everyone has heard of a small part of them – Apple, Google, Microsoft, McDonald’s, etc. Probably almost every person on the planet has heard of them. Also, when Russia launched its unprovoked barbaric invasion of Ukraine on February 24, 2022, the world’s largest and most socially responsible companies began to independently make statements in which they at least condemned military aggression, and at most – declared their intention to leave the market in the Russian Federation in response. For some of them it is easy to do (such as Taiwan’s TSMC, which did not directly work in the Russian market, but expressed strong solidarity with Ukraine), for others – it is more difficult (such as Finland’s Nokian Tires, which has a legal entity in the Russian Federation, a tire production plant and generally receives about half of its global revenue in the Russian Federation).

Lists of companies and their decisions then began to be tracked and collected by many organizations, including the KSE Institute. But at some point we realized that our greatest efforts should be directed at identifying those international firms that have physical assets in the Russian Federation (legal entities, personnel, receive revenue, pay taxes, have production, etc.).

In order to identify and rank the TOP-largest foreigners in the Russian Federation, we started with a list of several dozen legal entities in the Russian Federation with non-resident owners. This list is formed according to the statistics codes from Rosstat (OKOGU Code 4210011 Household companies and partnerships with the participation of foreign legal entities and (or) natural persons, as well as stateless persons). However, the majority on this list are not real foreigners. Often, it is the property of the Russians themselves (for example, Yandex, Evraz, Pyaterochka and others) registered to foreign structures, sometimes offshore. Each record had to be checked by hand. After processing a couple of thousand items, we were able to create a TOP-350 list from scratch in the spring of 2022 and rank them by the amount of revenue received directly in the Russian Federation. We continued to gradually process new entries from open registers and data from Russia’s EGRUL and gradually add new corporations, expanding their list to about 800 as of the end of July.

In August, we developed an automatic algorithm that was able to independently process almost ten thousand records of legal entities, and thus we managed to expand the list to almost 1,300 largest foreign companies in the Russian Federation with a minimum revenue of 3.7 million US dollars. Currently, as far as we know, this dataset has no analogues in the world (the largest one close to it is the rating of the Russian Forbes TOP-50 foreign companies in the Russian Federation).

This explains the fact that this week we simultaneously expanded our database of companies by 422 new positions. As of now, the list of those for whom we have found assets in the Russian Federation already includes a little more than 1,300 companies, and our database contains almost 2,900 records (companies, organizations, services, etc., for which the position is known, but some of them do not necessarily directly conduct business in Russia).

For 422 of these “newly arrived” companies, we also tried to automatically find their press releases or news in the media about their relationship to the war and plans to work on the Russian market. But for the absolute majority, it was not possible to do this. Therefore, taking into account the fact that they have an active business in the Russian Federation, with some exceptions, all of them received the status of those who stay to work and do not leave: 394 – stay, 12 – leave, 16 – wait.

Of course, we are open to comments and are ready to revise the position of any company if we receive more information not previously available to us (please do it via the Feedback Form at the https://leave-russia.org/ website).

WEEKLY FOCUS: SMARTPHONE MARKET IN RUSSIA AFTER WORLD’S LEADING BRANDS DEPARTURE

Phone sales in Russia have decreased by 50% in July year-on-year. While Apple and Samsung have stopped shipments, Chinese brands are taking over the market. Gray import is slowly rising as well.

Samsung and Apple suspended their shipments. Parallel import allowed by Russia facilitates importing the most expensive and best-selling models but does not replace the entire line of products. Apple halted sales in Russia on March 1 2022. Moreover, the company restricted the Apple Pay service. The share of the company in July fell to 7%⁵.

In early March, Samsung suspended its shipments as well. The company used to have the largest share of sales on the market, and then its share fell from 30%l to 8.5%. Media reports that the company creates ways of gray imports into Russia to directly bypass sanctions⁶. Samsung keeps its R&D center in Russia and hires staff. The market is waiting for whether the company will return to the market.

The exit of Samsung and Apple created a favorable situation for the commercial activity in Russia of Xiaomi and its two other brands, Redmi and Poco. In July, their share reached 42% of the Russian smartphone market, while in February its share was close to Samsung’s one. Wall Street Journal wrote⁷ that Xiaomi cut shipments to Russia, but Russian media report that their products are widely available⁸.

Another Chinese brand that gained market share⁹ was realme, a BBK Electronics brand with a 17% share in the number of phones sold. The figure is higher than Samsung and Apple together. Another brand that gained market share was Tecno (7.5% of the market in July).

Huawei is losing its market share⁹ due to the absence of Google services in most modern Huawei smartphones and a substantial reduction in the manufacturer’s assortment. Honor, another brand of Huawei, stopped supplying smartphones to Russia¹⁰.

At the same time, a new brand entered the Russian market. Wiko, a French brand of Chinese company Tinno Mobile Technology, started sales in August¹¹. It is another example of a Chinese company replacing the brands’ products, which refused to supply smartphones to the Russian Federation.

The Russian smartphone market fell significantly, but the media reports some signs of slow recovery¹². Chinese companies are replacing the world’s leading brands. There are risks for some of Samsung to return to the market. Constant public attention is required not to allow it.

You can also contribute by spreading the status of the company with a call to leave Russia on social networks directly from the company cards on the website https://leave-russia.org/.