The once popular Russian department stores that boasted “Russian charm” are now facing an unprecedented wave of closures nationwide. From the historic street of Confucius Temple in Nanjing to first-tier cities like Shanghai and Hangzhou, these stores that used to tout “authentic Russian goods” have experienced a dramatic transformation from flourishing to clearance sales within less than a year.
In Nanjing, Jiangsu Province, the once bustling “Russian department store” is now a desolate scene with empty shops. The store located in the famous tourist area of Uyi Lane in Confucius Temple has quietly changed its prominent “authentic Russian goods” sign to “snack market.” The remaining few products in the store are undergoing a final clearance sale, with a vacancy rate of over 70%.
According to reports from various media outlets including the Yangtze Evening Post, local store operators stated that the high store rents, brand franchise fees, and procurement costs formed a triple pressure that made it difficult to sustain operations. Coupled with the fact that tourists’ consumption preferences lean more towards local Nanjing products, the stores continued to incur losses, leading to them ultimately disposing of excess inventory at deep discounts of up to 70% off.
Similar operational difficulties have also surfaced in the Wanda Plaza in the west of Nanjing. Several chain stores under the name of “Russian department store” had once appeared in this area, with one store featuring a giant tent design that attracted attention in the mall but has now completely closed down. Another branch in the snack street has also shut its doors, leaving only a glaring red leasing advertisement.
Consumers and nearby shop owners have reflected that these stores initially attracted a large number of customers with the exotic label of “Russian,” but later faced complaints and reports due to issues like “domestic goods masquerading as imports.” This led to a sharp decline in foot traffic, ultimately resulting in their inevitable closures.
Many consumers were shocked to discover after purchasing that the so-called “Russian salami” actually originated from Heilongjiang Province, and even the “Russian pastries” were sourced from Harbin, Heilongjiang.
This typical fraudulent behavior of “selling dog meat under the guise of a sheep’s head” made consumers feel exploited, believing that businesses maliciously took advantage of people’s curiosity about foreign cultures. Ultimately, the romantic exoticism succumbed to the practicality of the “Chinese palate” and the harsh market reality.
This downturn in the industry is not a random occurrence but the inevitable result of multiple negative factors overlapping and resonating. The Russian Embassy in China clarified through Weibo in January that the only authorized Russian national pavilions are supported by Russia’s export centers, cautioning consumers to be wary of counterfeit Russian products.
Subsequently, market supervision authorities across the country have launched large-scale special rectification actions targeting “Russian department stores” in their respective jurisdictions, focusing on the qualifications of operators, product quality standards, label specifications, and import clearance procedures.
Meanwhile, the systematic collapse of the brand franchise model has further accelerated the overall decline of the industry. Some brand operators lured investors with false promises of “high profits and quick returns.” After collecting high franchise fees, they enforced the distribution of domestically produced close-dated goods at inflated prices.
Some franchisees disclosed that the brand operators pocketed up to 30% of the intermediate profits from the procurement process, while burdening them with the pressure of dealing with large quantities of unsold inventory, resulting in losses and their eventual exit from the market. This typical business model of profiting from information asymmetry not only damaged the economic interests of franchisees but also deceived the legitimate rights of end consumers.
From the bustling Bund in Shanghai to the leisurely Chunxi Road in Chengdu, from the internet capital Hangzhou to the commercial hub of Guangzhou, this wave of closures of “Russian department stores” has almost swept through major cities nationwide.
Veteran retail industry analysts pointed out that the end of this sensational commercial drama once again confirms the timeless core principle of the business world: once any business model deviates from the fundamental principles of genuine products and honest operations, it is destined to be unsustainable.
Initially, these exotic department stores cleverly capitalized on the diplomatic dividends of “Sino-Russian friendship” and consumers’ curiosity-driven shopping psychology, truly creating a brief and fervent wave of consumer frenzy. However, as consumers gradually discovered that the goods they purchased at high prices were not genuinely imported from their purported origins and even the product tastes differed significantly from Chinese preferences, repeat purchase rates plummeted rapidly to near-zero levels.