The market and supply chains for ICT equipment are recovering in Russia
Source：Kommersant
From：Taiwan Trade Center, Moscow
Update Time：2024/08/09
The market and supply chains of information, communication and telecommunication (ICT) equipment, as well as microelectronics, are recovering, experts from the Higher School of Economics note in their profile review. The turnover of wholesale ICT distributors increased by almost 40% in the first third of this year, and now, according to experts, Russian consumers do not have problems providing these products. The production situation in the sector looks somewhat worse — investment projects to create ICT equipment production in the Russian Federation are being implemented, but so far mainly on the basis of an imported component base and with relatively low added value.
After the introduction of expanded sanctions and against the background of rising import prices, even in dollar terms, with the weakening of the Russian ruble, a slight decrease in real sales volumes of ICT equipment was recorded. In 2023, the recovery of the market and supply chains began, which continued in 2024, follows from a review by the Institute for Statistical Research and Economics of Knowledge (ISSEK) of the National Research University Higher School of Economics. In the ISSEK newsletter “ICT sector. Trends. Events. Figures” notes that the turnover of wholesale ICT distributors in 2022 decreased by 2.2%, in 2023 increased by 15.9%, and in the first four months of 2024 increased by 39.4% in annual terms. The volume of investments of domestic companies in the purchase of such equipment in 2022 grew at current prices by 5.8%, in 2023 - by 23.8%, and in the first quarter of 2024 - by 42.3% in annual terms.
In the ICT equipment production sector, the situation in 2023 was ambiguous. The growth in sales of computer equipment and other computer equipment amounted to 50.3%, microelectronics - 54.6%. The communications equipment segment grew by only 2.9%.
ISSEK notes that now Russian consumers do not have problems with the provision of ICT equipment, components and microelectronics. It was possible to cope with the disruption of supply chains caused by sanctions in two ways: through parallel imports and purchases from alternative Asian “second and third tier” suppliers. However, such a restructuring is accompanied by a complication of supply chains and an increase in the number of intermediaries, which leads to a significant increase in costs. It is noted that, simultaneously with import purchases, some Russian companies are implementing investment projects to create ICT equipment production in the Russian Federation - for now, however, mainly on the basis of imported components and with a relatively low added value.
As for software and IT services, their official imports decreased by almost half in 2023 compared to 2021, from $5.2 billion to $2.7 billion. The volume of sales of domestic products and services increased significantly - by 30.3% compared to 2022. In January-April 2024, growth continued and in annual terms amounted to 55.9%. Companies strive to maintain the functionality of locally deployed foreign IT systems, but the trend towards import substitution is irreversible, ISSEK experts emphasize. Let us recall that the achievement of “digital transformation of state and municipal government, economy and social sphere”, designated as one of the national goals in the new May decree of Vladimir Putin, also includes the transition of at least 80% of Russian organizations to domestic software, the bar for government agencies is still above - 95%.
Source: https://www.kommersant.ru/doc/6822957?from=top_main_6