"Chinese Smartphone Companies Face Decline in Russian Shipments After Ukraine Airstrikes... Concerns Over Losses"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Following Russian President Vladimir Putin's decision to launch airstrikes on Ukraine, the value of the ruble plummeted, leading to reports that shipments from major Chinese smartphone manufacturers, including Xiaomi, to Russia have decreased. While some suggest the possibility of economic solidarity between China and Russia, this appears to be a case demonstrating that such a reality is difficult to achieve.

On the 9th (local time), major foreign media outlets cited sources reporting that shipments of smartphones from China's leading manufacturers such as Xiaomi, Oppo, and Huawei to Russia have dropped to at least half their previous levels since the airstrikes. Russia, the largest smartphone market in Europe, is a region where Chinese brands account for 60% of the market share. According to market research firm Counterpoint Research, Chinese Xiaomi ranks as the second-largest smartphone vendor in the Russian market, positioned between Samsung in first place and Apple in third.

A source with experience as an executive at Xiaomi said, "Given that the Chinese government supports Russia, officially announcing a halt in sales in the Russian market like Apple or Samsung would be politically sensitive," adding, "However, from a business perspective, it is appropriate to monitor the situation and decide the next steps accordingly." A former Huawei executive who worked in Moscow also expressed the view that "doing business in Russia right now is very risky."

According to foreign media, trade volume between China and Russia reached a record high of $146 billion (approximately 180 trillion won) last year, with about 14% of Russia's imports, including electronic products, coming from China.

The problem is that with the ruble's value collapsing against the dollar, Chinese companies are facing foreign exchange losses. Before the Ukraine invasion, the ruble exchange rate was below 80 rubles per dollar, but it has since risen to about 140 rubles. Chinese companies would need to raise product prices to avoid losses considering this exchange rate, but given the economic sanctions imposed by Western countries, raising prices is realistically difficult. Foreign media analyzed, "The reduction in shipments by Huawei and Xiaomi indicates that the political friendship between China and Russia does not protect Chinese companies from damage."

This content was produced with the assistance of AI translation services.