The Russian Industry and Trade Ministry has rolled out a 700 million rubles (€9.5m) program to support the import-replacement trend in the domestic sporting goods market. The authorities plan to encourage local companies to replace sportswear, sporting gear and athletic apparel, which are expected to be in short supply due to the mass exodus of Western brands from the Russian market since the breakout of the war in Ukraine. The Ministry has yet to present a detailed plan for the import-replacement campaign, but local businesses already question its effectiveness. In April, the Ministry estimated that Russian companies produce 70 percent of sporting goods items.
The Russian Association of Sporting Companies believes that the Russian self-sufficiency in sporting goods is close to 40 percent. On the other hand, Stanislav Sokolov, general director of the Russian athletic apparel manufacturer SiimB, estimated that 85 to 90 percent of sporting goods in the Russian market are imported. “The goods available now in Russia are uncompetitive on all accounts,” he said. “Now, in Russia, at best, you can sew, assemble and complete the final product. There is no raw material, highly specialized equipment, and experience for more ambitious plans. Small workshops can fulfill the initial terms of reference, but their production volumes will be small, and prices will be way above the market level.”
Even already existing Russian companies experience major difficulties due to Western sanctions and logistics chaos since they were strongly dependent on imported equipment and raw materials.
“In March, there was optimism that now foreign brands will leave and our companies will take their place,” said Andrey Maligin, chairman of the sporting goods department at the Synergia University. “But logistical ties have begun to crumble. After all, each Russian manufacturer has its own suppliers abroad,” he said, adding that most fabrics and parts turned out to be imported. “Currently, many [Russian] factories are turned down by their suppliers who either physically cannot deliver an order to Russia or refuse to work for ethical reasons. As a rule, these are long-term partners, actually friends. But now they are adamant: they say, I’m sorry, I can’t go on. And for our part, it is simply difficult to transfer payments to European business partners.”
The price of sporting goods of Russian origin has already jumped 15 to 20 percent, but this is likely to be only the beginning. “It will be followed by problems with technologies, experience, and training of personnel. Our factories need foreign licenses, operating knowledge, and software. Failures also begin on these channels. There is a tsunami effect,” Maligin said.
