Moscow space attracts strong store interest

PUBLISHED : Monday, 06 December, 1999, 12:00am
UPDATED : Monday, 06 December, 1999, 12:00am

More than 100 companies are bidding for space in the mainland's second-large retail space in the centre of Moscow.

It is due to open in February, with prices as little as a fifth of those for comparable goods from Europe.

The China Friendship Market will have 14,000 square metres of commercial space, making it among the biggest stores in the city, with 12,000 products in 40 categories, the Beijing Youth Daily said.

The site is one of two bought in Moscow in 1997 by a delegation led by the Bureau of Internal Trade under the State Economic and Trade Commission, following an agreement in December 1996 by the prime ministers of Russia and the mainland.

The bureau has invited only big firms to bid for space in the new market, in an effort to change the bad impression many Russians have of mainland goods, after a flood of fake and low-quality products in the early 1990s.

The 100 bidders produce mainly foodstuffs and consumer goods, since Russia depends on imports for 40 per cent and 60-70 per cent of these categories of goods respectively.

The companies believe the Russian economy and currency have stabilised since the collapse of the rouble last year.

They also believe they can compete well with goods from Europe since their prices will be much cheaper while guaranteeing a certain level of quality.

The bureau leased the first site to Beijing supermarket chain Tian Ke Long, which opened its Moscow supermarket in August this year.

After the collapse of the Soviet Union and the easing of visa restrictions, mainland traders flooded into Russia and other former Soviet republics, to sell food, clothing and other consumer goods that these countries did not make and take advantage of market opportunities created by the sudden end of the old central planning system.

Many sold cheap and poor-quality goods they could not sell to more sophisticated buyers in Europe or North America.