Russians are saving: second-hand shops and appliance repair services are experiencing a real boom. The Russian economy is increasingly reminiscent of that of the former Soviet Union, says a Russian economist.
Interest in second-hand shops and household appliance repair services is growing throughout Russia. Due to the sharp rise in the cost of living, more and more Russians are giving up buying new goods, clothes and shoes and turning to cheaper alternatives. Young Russians in particular are spending less on travel, entertainment and luxury goods in times of economic instability.
A Soviet-style economy
Inflation in Russia reached 9.52% in 2024, significantly higher than the Central Bank's forecast of a maximum of 8.5%. The authorities' attempts to control price increases have had little effect, and Russian economist Igor Lipsiz is convinced that the actual annual inflation rate is more than seven times higher than the official data.
According to him, the Russian economy is increasingly reminiscent of the one in the former Soviet Union, which was oriented primarily towards military needs. At that time, significant funds were directed to the arms industry, while social issues remained in the background. In today's unstable economic conditions, it turns out that only those who offer repair or resale of second-hand goods are good, says Lipsiz.
High demand for used goods
Andrey Fedotovsky, chairman of the Russian Association of Commission Trade and owner of a chain of second-hand clothing boutiques, testifies that the demand for second-hand luxury goods is also growing. Sanctions and the withdrawal of Western brands from the Russian market due to Russia's war with Ukraine are further strengthening this trend. Owners of expensive branded goods want to recover some of their money, and for buyers this is an opportunity to acquire luxury goods at a bargain price, explains Fedotovsky.
According to him, prices in second-hand goods stores have also risen - by eight to nine percent, which corresponds to the level of inflation. However, this is disproportionate to the increase in prices for new branded goods that enter Russia through the so-called grey imports.
"The trend towards reselling branded clothing is also part of the global trend towards more conscious and environmentally friendly consumption," adds Fedotovsky. Due to the economic crisis, even wealthy Russians are switching to a circular economy and preferring to buy second-hand goods instead of new ones, he adds, explaining that the demand for used luxury goods is growing particularly strongly in regions where income growth is observed due to military production. According to Fedotovsky, salaries in some companies in the arms industry have increased to 200,000-300,000 rubles, which is equivalent to about 2,000-3,000 euros.
Repairing old appliances as an alternative
In view of the rising prices of new goods, especially imported ones, Russians prefer to repair their old appliances instead of buying new ones. And this leads to an increase in the services offered. One of the players in this field is the Avito platform, which was originally created for the exchange of goods between private individuals. It is currently one of the largest online retailers in Russia with a turnover of 1.9 trillion rubles (about 19 million euros), according to data for 2023.
Ads for the repair of household appliances have increased by 45% in 2022 and as much as 64% in 2023. The largest number of inquiries are for the repair of washing machines and dryers - the increase is as much as 181%, as reported by the Russian newspaper "Vedomosti", referring to Avito. At the same time, interest in computer repair has fallen by 30 percent, which observers attribute to problems with importing the necessary components due to Western sanctions.
Environmentalists welcome this trend
Environmental organizations are also observing a growing interest in second-hand goods in Russia. Representatives of "Раздельный сбор" tell DW that the difficult economic situation in Russia is changing consumer habits, which in turn is an opportunity for more conscious consumption.
According to the organization, more than 78 percent of textiles that end up in the trash in Russia are suitable for reuse or recycling. "About 20 percent of families in Russia cannot afford new clothes, and hundreds of kilograms of clothes are thrown away in large cities every day," says Irina Shasminova from "Раздельный сбор".
Despite these positive changes, the economic crisis in Russia is having a negative impact on the waste management industry, notes Anna Garkusha of the same organization. Many companies that process secondary raw materials are having difficulty repairing the necessary equipment due to Western sanctions. There are also waste collection centers that are closing for financial reasons.
But in any case, says Garkusha, the increased demand for second-hand goods and repair services is due more to the economic situation in Russia than to any awakening awareness of environmental protection.