The rise and fall of Russian commodity stores in China

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In mid-2024, Russian commodity stores experienced a meteoric rise in popularity across China, fueled by a mix of curiosity, emotional marketing, and social media hype. These stores claimed to offer authentic Russian goods, primarily food items like chocolates, biscuits, and snacks, which resonated with middle-aged and elderly consumers nostalgic about Sino-Russian ties.

Suifenhe, a small border city in Heilongjiang Province and a major trade hub for Russian goods, became the epicenter of this frenzy. Merchants from across the country flocked to Suifenhe to source products, many paying upfront in cash without scrutinizing the goods. During the peak in November 2024, merchants described scenes of buyers armed with millions of yuan, snapping up inventories in bulk without haggling.

According to local wholesaler Meng Bing, the demand was so intense that even incoming shipments were pre-sold before arrival. Popular items like biscuits and chocolates were perpetually out of stock. By November, the number of new Russian commodity stores nationwide had surged, with one estimate suggesting as many as 2,000 new stores opening in a single month.

The rapid expansion of Russian commodity stores was underpinned by several key factors: low entry barriers, promises of high profit margins, and aggressive marketing by franchisors.

Many store chains bore similar names and branding, such as "Russian Bear" or "Russian Fun," giving the impression of a coordinated business model. Some brands even boasted profit margins as high as 50%, a rare figure in retail. Social media accounts promoted the idea that these stores could recoup their initial investment within three to six months. Franchisors collected not only franchise fees but also profited by selling goods to franchisees at marked-up prices.

However, a closer inspection revealed cracks in the system. While most stores claimed to sell authentic Russian products, investigations found that only 50–60% of the goods were actually imported from Russia. The remainder were sourced domestically or from other countries, misleading consumers. Additionally, pricing practices varied widely, with some stores charging exorbitant prices for low-cost items. For example, a box of biscuits costing 3.3 yuan was sold for as much as 19.9 yuan in some stores. Despite the markup, many consumers still purchased these products, driven by the novelty and emotional appeal of "Russian" goods.

The boom came to an abrupt end in December 2024, as media reports highlighted widespread issues, including misleading advertisements, unlicensed operations, and inflated claims about the authenticity of products. These revelations led to regulatory crackdowns across the country. In Shanghai alone, authorities inspected 47 Russian commodity stores in early January 2025, resulting in several closures and investigations.

The fallout was immediate. Sales in many stores dropped by 75% or more. A large Russian goods store in Beijing, which initially recorded monthly sales in the millions, reported a dramatic decline in foot traffic and revenue. The store's manager lamented, "At this rate, I don’t even want to continue. Sales have plummeted, and I’m sitting on millions worth of unsold stock."

The situation in Suifenhe, once the heartbeat of the industry, also took a turn for the worse. Wholesalers like Meng Bing faced mounting inventory pressures as retail demand dried up. A surplus of Russian goods flooded the market, prompting the emergence of a secondary industry focused on buying out unsold stock at heavily discounted prices. Non-Russian goods from these stores were often resold at just 20% of their original price, while authentic Russian items with shorter shelf lives fetched slightly higher rates.

The rapid rise and fall of Russian commodity stores is a cautionary tale of speculative retail ventures driven by hype rather than sustainability. While emotional marketing targeting middle-aged and elderly consumers may have initially succeeded, the lack of regulatory oversight, questionable business practices, and oversaturation of the market ultimately led to its downfall.

One of the most striking aspects of the story is the uniformity across store brands, from logos and décor to promotional tactics. Many brands appeared to be hastily assembled franchises seeking to cash in on the craze. For instance, a popular chain, "Russian Fun," was established only months before the boom and grew rapidly by recruiting franchisees. By December, the chain had opened over 200 stores, adding 50 new locations in just one month.

However, the rush to capitalize on the trend left many stores ill-prepared to weather challenges. With the bubble now burst, franchisees and independent store owners alike are struggling to adapt. Some have pivoted to selling generic imported snacks, while others have shut down entirely.

For cities like Suifenhe, the fallout is particularly painful. Once a thriving trade hub, the city is now grappling with empty markets and dwindling tourist numbers. Yet, some believe this crisis could pave the way for a more regulated and sustainable trade ecosystem in the future.

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