Russian Market Opportunities For Smart Folks, Or Why Most Western Businesses In Russia Never Left This Market During Sanctions

The Russian market is often incomprehensible and even frightening for foreign businesses. The daily streams of distorted / biased information by mainstream media make it very difficult to weed out the seeds from the chaff.

More rubbish is written and spoken about Russia than any other country on the planet Earth.

Daniel Thorniley, Former Senior Vice President, The Economist Group

I will highlight a number of issues that could allow you to assess this national market from the perspective of capitalizing on its boosting numerous opportunities available.

Who Is This Copy For?

If you represent a business interested in expanding internationally or you ponder new emerging opportunities globally, namely in Russia, this copy could give you some food for thought.

My name is Stanislav Grafski, a Russian business consultant, lawyer, entrepreneur and coach.

I help to grow successful businesses with Russia for companies who discovered the ability to capitalize on Russian opportunity but lack any knowledge of how to get started and proceed further.

Many unbiased observers who check Russian market opportunities find themselves puzzled with a few simple questions:

• Why does the Russian economy continue to grow during the Ukrainian conflict so that it outpaces all Western economies in growth rates that contradicts formal logics and economic sense?
• How – over today's historically unprecedented anti-Russian sanctions – does the Russian domestic consumption constantly grow and the market expand?
• Why most Western businesses in Russia never left this market during these harsh Western sanctions?

My conclusions are based on my 35 years+ experience, personal observations, and official data of highly authoritative international economic institutions, most of which are unlikely to be called as Mr Putin's friends.

Russia At a Glance

• World's largest country by territory
• World's richest country by natural resources
• Europe's largest and fastest growing national economy
• World's No4 economy by PPP (Purchasing Power Parity) as per The World Bank
• World's No5 economy by GDP as per International Monetary Fund (IMF)
• Top BRICS country by ‘Ease of Doing Business'

NB. A number of highly authoritative international experts forecast Russia's shift to No 3 position globally (to follow China and the US) over the next 5-10 years, based on its performance in the past 20 years. It is inevitable that market investment attractiveness will likely go through the roof for crowds of conservative global investors then.

Jim Rogers, a legendary US investor in undervalued markets known for his heavy investments in Ruble bonds, Russian fertilizers, Russian agro, Aeroflot, etc predicted a boom in Russia, in particular once the Ukrainian conflict is resolved.

Key Market Features

• Consumer base of 150 Mln people and overall access to 185 Mln+ consumers of EAEU market (5 countries)
• Many unsaturated sectors and niches to expand into
• Most assets are greatly undervalued
• Russian rouble is the world's most successful currency in 2025, as per The Bank of America
• Highly educated yet reasonably priced manpower as per OECD
• Low entry costs for new market entrants

Why Is It Particularly Lucrative to Trade With Russia Now Than Before the Ukrainian Conflict [in February 2022]?

Western brands exodus in 2022-2023 generated huge greener pastures for new business players and suppliers from all over the world

• Due to said exodus, some 50% of formerly lucrative niches stay half empty, thus generating more space for new market entrants
• Demand for imported goods is on the grow
• Many infrastructure and nation-wide projects are financed by the Government
• Ongoing demand for massive industrial products manufactured abroad

Ironically, Western sanctions kicked the economy to develop faster than before. The World Bank recognised Russia as the fastest developing economy in Europe.

Thanks to Western sanctions, Russian economy turned mostly to alternative markets of Asia / Global South within 2 years+.

Currently, Russia's 5 leading trading partners include:

1. China
2. India
3. Turkey
4. Belarus
5. Kazakhstan

Russia's international trade turnover (breakdown) is:

• Asia – 74%
• Europe – 19%
• Americas – 4%
• Africa – 3%

Key Market Benefits for New International Businesses:

1. Overall market competition level is significantly lower than in most developed economies that allows new entrants to get settled fast and with low entry costs.  Many niches are still far from saturation that makes business entry relatively easy even to small and medium sized companies.
2. The government stimulates supply into unsaturated sectors and niches, e.g., Import Substitution and Parallel Import programs are in place.
3. Free Trade and Free Zone Agreements with partner countries steadily grow.
4. Preferential trade rules with EAEU and BRICS member countries.
5. ontract payment terms in national currencies grow, thus simplifying cross-border payment mechanisms and leaving sanctions zero effect.

Business Cases: Huge influx of Asian IT companies in Russia – over 3,000 new companies in Russia in January-June 2025, ie, twice more than in entire 2024. Within 2 years+, Chinese car manufacturers won over 30% of the Russian care market

Some Challengers vs Opportunities / Solutions

Lucrative Opportunities – a few samples:

1. Traditional Opportunities

• Boosted consumer spending led to increased demand for traditional consumer products
• Selling imported goods & services to Russia – a long list (e.g., machineries, technologies, disposables, textiles, garments, construction materials, cars, trucks, spare parts, tropic fruits & vegetables, demand for pharma products to double annually until 2030), at all
• Sourcing from Russia – energy products (oil, gas, diesel), timber, plastics, chemicals, metals, gold, gems, fertilisers, wheat, sunflower, corn, oats, seafoods, many organic products, a long list of food products, commodities, special vehicles, mining equipment and machineries, semi manufactured goods for many industries, arms & weapons, etc

NB. Direct sourcing from end suppliers seems more lucrative than from local industry leaders.

• Joint Ventures / Strategic Partnerships with Russian businesses to get access to Federal and Regional Government programs and funding, government tenders and many other perks available to local businesses
• Production localisation allows new entrants to benefit from local production facilities and designing business models as per local market demand while hiring local manpower with industry developed connections/ supply chains. Some lucrative areas include industrial manufacturing projects, cosmetics and perfumes, food processing, packaging and storage, medical devices and equipment, medical tourism, pharma and drugs, animal food, baby food, safety and security equipment, premium and fashion in apparel and footwear, and many others.

Business case: my Asian client was hired by a Russian industry leader for designing and supplying a-la carte manufacturing products. A team of Asian engineers moved to Russia to client's site to speed-up the process while mass production is still in their home country. This optimization allowed my client to sign up a 5-year contract with extensionoption with said Russian industrial monster.

• E-commerce in Russia experiences continuous growth for the seventh year in the row. Russia is the largest e-commerce market in Europe and the fifth largest in the world. Over half of all Russians prefer online purchases. E-commerce year to year industry growth is some 20%+.
• IT and Digital is another area for rapid capitalization. Russian IT professionals are 3 to 7 times cheaper than US ones with same level of competence, if not higher.

2. Crisis in Ukraine Generated Opportunities

• Due to massive shift of local manufacturers to defence contracts, whole manufacturing industries/ sectors stay semi-empty, i.e., opportunities to many international manufactures (random sample: demand for axle boxes in Russian Rail, a monopolist in rail transportation, the most massive surface transportation in the country)
• Owing to exodus of many Western brands, their pre-cultivated niches are easy to enter by new market players (e.g., niches left by IKEA, Western car brands, etc.)
• Shortage of Western software products is being compensated by Chinese / Indian software developers
• Legalized crypto mining in Russia attracts many Asian miners (in particular, from China)

3. Some New Opportunities

• Collaboration with hundreds of Russian exporters expanding into many national markets around the globe
• Manpower supply to Russia: there is a boosting demand for qualified engineers, skilled and unskilled workers (teams) from abroad. Current manpower demand appears to be over 3 million people/ year and growing – huge opportunity for international specialized recruiters.

Some 2025 novelties

• Many Western businesses are lined up to re-enter the Russian market
• New affiliate entities set up in neutral jurisdictions to avoid Western sanctions and their limiting regulations
• The number of alternative cross-border payment systems grow steadily in Russia-related trade to avoid sanctions legally.

Business case: Russian conglomerate Rostec rolls-out a ruble-pegged token RUBx alongside a payment hub RT-Pay. The token is based on Tron blockchain.RT-Pay plugs straight into the country's banking rails. That link lets companies and individuals move money in seconds, even after business hours, or lock funds in smart contracts.

Final remark

I hope you can answer the questions I outlined at the beginning of this material on your own. If not, contact me for clarifications.