The legitimate cost differences stated by other respondents such as; customs, not manufactured in Russia, high cost of retail space, as well as transportation, also apply to varying levels in other countries but do not result in the same outrageous consumer prices as we see here, nor are those countries experiencing the almost rampant inflation over here. The hidden costs in the Russian system include;
a) What's in corporate terms is known as "a cost of doing business in Russia" in other words rampant corruption & its attendant admin costs throughout the entire business process. b) Inefficiency in most operational areas, leading to higher costs, - caused by poor management in the majority of Russian organisations c) Excessive profiteering, usually excused by reasons a) & b) above, plus - Retailers are in an expansion race to gain market share, & part of the funding for this comes from profits, thus gouging the consumer is fair game - Manufacturers & Distributors make extra profits via inter-company off-shore pricing schemes - Most Russian consumers have no concept of 'value for money' especially for imported goods, & are easily seduced by advertising imagery, unsubstantiated product claims, & an easy come, easy go mentality typically of consumers participating in a black economy. d) The Oligarch monopoly mentioned by another commentator is certainly true when it comes to how the big assets are carved up & then priced on. At the small business level, its not so much a monopoly problem as a day to day survival need. This requires businesses to price as high as possible to recover investment costs ASAP, as they can't risk spreading these out over a normal business cycle. Sadly, I recently heard that new bureaucrats under the new Moscow Mayor are hitting small businesses even harder than the old team, so don't expect any respite soon. The best to hope for is that with an election year coming round, the incumbent parties will make some populist moves on some staple items to win voter approval. Finally, what brings a smile to my face is that your average smart Russian with a bit of business sense is aware of most of the above, & simply laughs it off as part & parcel of life in Russia, & claims most Russians would do the same if they have the chance. Of course those that disagree & have an alternative chance, choose then to leave the country :(( On 8/30/11 12:00 PM, "[email protected]" <[email protected]> wrote: >Send Expat mailing list submissions to > [email protected] > >To subscribe or unsubscribe via the World Wide Web, visit > http://www.lists.ru/mailman/listinfo/expat >or, via email, send a message with subject or body 'help' to > [email protected] > >You can reach the person managing the list at > [email protected] > >When replying, please edit your Subject line so it is more specific >than "Re: Contents of Expat digest..." > > >Today's Topics: > > 1. Why Stuff Costs More in Russia? (Nick Hodgkins) > 2. Re: Why Stuff Costs More in Russia? (David Rubincam) > 3. Re: Why Stuff Costs More in Russia? (Sven Mermans) > > >---------------------------------------------------------------------- > >Message: 1 >Date: Mon, 29 Aug 2011 04:13:08 -0700 (PDT) >From: Nick Hodgkins <[email protected]> >Subject: Expat List Why Stuff Costs More in Russia? >To: "[email protected]" <[email protected]> >Message-ID: > <[email protected]> >Content-Type: text/plain; charset="iso-8859-1" > >Any listers know why (besides other goods and services) most consumer >items in Russia cost more than they cost, say, in Europe/the US? The >real reason why specific models of a Walkman, iPhone, pair of trainers, >M&S pair of socks, etc. always cost considerably more, never the same? >I've always wondered and conjectured, but maybe someone actually knows >the real reasons... > >Thanks, >Nick >-------------- next part -------------- >An HTML attachment was scrubbed... >URL: >http://www.lists.ru/pipermail/expat/attachments/20110829/41f47121/attachme >nt-0001.html > >------------------------------ > >Message: 2 >Date: Mon, 29 Aug 2011 20:05:33 +0400 >From: David Rubincam <[email protected]> >Subject: Re: Expat List Why Stuff Costs More in Russia? >To: Nick Hodgkins <[email protected]>, The Moscow Expat List > <[email protected]> >Message-ID: <[email protected]> >Content-Type: text/plain; charset="us-ascii" > >For one reason the items are imported here, not made here. Another factor >most likely has to do with the oligarchic (monopoly) method of business >here; most prevelant example is dry cleaning. The unit cost bez profit to >dry clean a suit is @ 2.80 USD - so why does it cost over 35.00 USD? >Oligarch aka monopoly over the business sector. Sad but true. > > >On Aug 29, 2011, at 3:13 PM, Nick Hodgkins wrote: > >> Any listers know why (besides other goods and services) most consumer >>items in Russia cost more than they cost, say, in Europe/the US? The >>real reason why specific models of a Walkman, iPhone, pair of trainers, >>M&S pair of socks, etc. always cost considerably more, never the same? >>I've always wondered and conjectured, but maybe someone actually knows >>the real reasons... >> >> Thanks, >> Nick >> >> >> >> >> _______________________________________________ >> Expat mailing list >> [email protected] >> http://www.lists.ru/mailman/listinfo/expat >> http://www.expat.ru/forum/ > >-------------- next part -------------- >An HTML attachment was scrubbed... >URL: >http://www.lists.ru/pipermail/expat/attachments/20110829/1289bd89/attachme >nt-0001.html > >------------------------------ > >Message: 3 >Date: Mon, 29 Aug 2011 18:09:51 +0100 >From: Sven Mermans <[email protected]> >Subject: Re: Expat List Why Stuff Costs More in Russia? >To: Nick Hodgkins <[email protected]>, The Moscow Expat List > <[email protected]> >Message-ID: <[email protected]> >Content-Type: text/plain; charset="windows-1251" > >Dear Nick, > >3 main reasons: > import duties (can add upto 30% or even more in some cases) > high transport costs to get the goods to Russia (many goods go from >China to Europe and then from there on to Russia) > extremely high cost of retail space in Moscow. > >Hope that helps in understanding this frustrating fact of life... > >Sven Mermans > >Sent from my iPhone > >On 29 Aug 2011, at 12:13, Nick Hodgkins <[email protected]> >wrote: > >> Any listers know why (besides other goods and services) most >> consumer items in Russia cost more than they cost, say, in Europe/ >> the US? The real reason why specific models of a Walkman, iPhone, >> pair of trainers, M&S pair of socks, etc. always cost considerably >> more, never the same? I've always wondered and conjectured, but >> maybe someone actually knows the real reasons... >> >> Thanks, >> Nick >> >> >> >> >> _______________________________________________ >> Expat mailing list >> [email protected] >> http://www.lists.ru/mailman/listinfo/expat >> http://www.expat.ru/forum/ >-------------- next part -------------- >An HTML attachment was scrubbed... >URL: >http://www.lists.ru/pipermail/expat/attachments/20110829/3f644f97/attachme >nt-0001.html > >------------------------------ > >_______________________________________________ >Expat mailing list >[email protected] >http://www.lists.ru/mailman/listinfo/expat > > >End of Expat Digest, Vol 82, Issue 13 >************************************* _______________________________________________ Expat mailing list [email protected] http://www.lists.ru/mailman/listinfo/expat http://www.expat.ru/forum/
