Apple and HP are exiting Russia which allows room for Chinese firms to invade the market and take over the technology sector. With more sanctions from the US, it is only a question of time before the doors are open for business. Some say China encouraged Putin to invade!
China's support for Russian President Vladimir Putin's invasion of Ukraine has geopolitical reasons and dreams of grandeur, but it comes with a market astuteness: Chinese technology companies want to take advantage of US and EU sanctions to invade the Russian market. With the departure of Apple, HP, Dell Technologies, Samsung and Ericsson, the Chinese will have a captive market for Lenovo, Huawei and Xiaomi Corp.
Anyone who gambled on those sanctions would throw Russia into a period of technological darkness similar to what existed in the Soviet Union time. Putin hasn’t really bargained that the repercussions would cause so much inconvenience. As soon as the war is over and the dust has settled, only then will the Chinese open more shops in Russia to help it get back to its former glory. However, the Chinese will acquire new frontiers!
It is a market that the Chinese know very well. Lenovo, the Hong Kong-based personal computer company is Russia's second-biggest PC seller, just behind Hewlett Packard according to a survey by International Data Corp. Xiaomi has been 1st place in the mobile phone market since August last year, followed by the South Korean Samsung and the North American Apple.
Apple's decision to leave the Russian market because of the Ukrainian invasion creates a new market for Chinese manufacturers. Apple held 14% of the cellphone market in Russia. As the Chinese already hold 41% of the smartphone market, they could reach 55%.
Another Chinese giant, Huawei, leads the Russian telecommunications market and competes with Sweden's Ericsson for the 5G market. Alibaba group, an e-commerce giant in China, has partnerships with a Russian internet company.
Take care!
Carl Boniface
Vocabulary builder:
Astuteness (n) = shrewdness, smartness, intelligence, wisdom, cleverness, good judgment, (ant) stupidity