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Exclusive | Ukraine war: Shenzhen smartphone maker AGM’s Russian business on thin ice after invasion
- AGM, which makes ruggedised smartphones that can operate in extreme cold weather, saw sales in Russia briefly reduced to zero after the country invaded Ukraine
- Economic sanctions against Russia, which sent the rouble into free fall, made it difficult for AGM because its sales in the country are settled in US dollars
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Shenzhen-based smartphone company AGM, which makes ruggedised models that can operate in extreme cold weather, saw sales in its second-largest market Russia briefly reduced to zero following that country’s invasion of Ukraine on February 24.
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AGM co-founder Austin Ding told the South China Morning Post that orders from Russia, which accounts for about 30 per cent of its total sales by volume, evaporated in the first two weeks after the war in Ukraine started.
“The main reason was the hugely volatile exchange rate, and a weakened spending power in the market,” Ding said in an interview on Tuesday in Shenzhen. He also indicated that the price of AGM smartphones, including models designed to function in Siberia’s harsh winter, doubled and even tripled overnight for Russian consumers.
International sanctions against Russia for invading Ukraine sent the rouble into free fall, which made it difficult for AGM because its sales in Russia are settled in US dollars.
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Ding said AGM smartphone sales in Russia are mainly conducted through AliExpress, the global online marketplace operated by Alibaba Group Holding. E-commerce giant Alibaba owns the South China Morning Post.
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AGM sales in Russia have seen a rebound, but still way below pre-invasion levels, after the rouble gained some degree of stability, according to Ding.
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