Hong-Kong
CNN
—
When the new iPhone 16 went on sale, locals couldn’t help but notice some lesser-known faces flocking to Apple stores in Hong Kong: Russians with wads of cash.
As new buyers walked out of the stores with the latest models, eager Russian buyers moved closer to seal the deal and offered to buy the new gadgets from them for a price. no less than 12% more than retail prices.
“We want to buy as many as possible,” a Russian buyer, Nick Alexenkov, told CNN outside the Apple Store in Tsim Sha Tsui, a busy shopping area in Hong Kong.
Moscow’s invasion of Ukraine is the main reason why iPhones are so expensive and hard to find in Russia. Russians are therefore often keen to buy mobile phones abroad.
Apple has has “paused” sales of products and services in Russia since March 2022 after Russian President Vladimir Putin sent troops and tanks into Ukraine, starting Europe’s biggest land conflict since World War II.
Western countries also placed sanctions on technology exports to Moscow and several international brands withdrew from Russia in response to the invasion.
As a result, iPhones are difficult to obtain in the country and often cost up to 70% more due to import hurdles, even as Moscow approved a plan in late 2022 to allow so-called gray or parallel imports, making iPhone sales possible. iPhones without permission from the brand owner.
The iPhone 16, which went on sale in many parts of the world on September 20, is available from at least two major chains in Russia: mobile network operator MTS and M.Video-Eldorado, a leading electronics retailer, which said it was securing supplies from “everywhere,” Reuters reported.
Apart from the big players, individual traders with an entrepreneurial spirit also see room to respond to the trend.
Alexenkov, the iPhone buyer in Hong Kong, said he expected to make a profit of up to 25% on each phone, despite offering to pay 12% above the retail price to buy those phones in Hong Kong. The city does not charge sales tax, making it particularly attractive for parallel traders.
The 30-year-old went all out for the 1-terabyte Pro Max model and went around $2,000 for each phone, $250 more than the official price in the city.
“(That model) is very popular in Russia, except for the desert color,” he said.
Alexenkov said he will likely make a profit even if he resells them at a lower price than major retailers domestically. M.Video sells the 1-terabyte model for 249,999 rubles ($2,710), almost 1.7 times the retail price in the US.
But he could make more. On Avito, the Russian classifieds website that also provides a platform for buying and selling, offers from several iPhone 16 models that sellers managed to get their hands on were more expensive than at retailers. A list of the 1 terabyte model went for a whopping 254,000 rubles ($2,742).
Back in Hong Kong, outside the glitzy IFC Mall in the Central district While Apple set up its first store in the city in 2011, four other Russian men were seen trying to buy newly purchased iPhones from Apple’s newest customers.
Three of the Russian buyers spoke little English, but that was not an obstacle to doing business. One of them brought along his son, who spoke perfect English and acted as a translator.
They did not reveal their names to CNN but said they had flown in from Moscow.
A man of Hong Kong, trying to sell two 1-terabyte Pro Max devices, complained that Russian buyers, at $2,027 each, weren’t offering enough. They immediately came up with a more robust offer of $2,040. A deal was made.
Asked if the Russian buyers were afraid their investment would fail, the buyer’s son told CNN: “There are rich people (in Russia) and they want the new colors.”
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