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Amber triangle China – Kaliningrad – Saint-Petersburg: profit and losses

October 23, 2017

 

 

Chinese tourists have discovered Russia only recently, due to many reasons, including economic growth in CNR. But the main flows from the country of the rising sun are profitable only to China: the tours are organized by national operators, these groups stay at those hotels and eat in those restaurants, belonging to Chinese and even initially Baltic amber is sold to Chinese by Chinese, with serious added value.

 

Chinese topic stays on the top of Russian newslines: in 2014 China became the leader of incoming tourism in Russia. According to statistical data, 1,3 mln Chinese tourists visited Russia in 2016, also thanks to the agreement among China and the RF about visa-free entrance for touristic groups. The state program of national development in China plans 5 mln tourists to visit Russia annually in 2016-2020. Mainly, these millions go to Moscow and Saint-Petersburg, and both cities are visited during one group tour for 7-9 days.

 

For the North-West region of Russia China is closely connected with amber: there are many shops located on the main streets of Kaliningrad and the seaside towns, with Chinese advertising and “amber” signs in Chinese, and the only official enterprise in Russia mining amber, Kaliningrad Amber Combine, reports about multi-million contracts with Chinese enterprises. Tour groups do not reach Kaliningrad and make amber shopping mainly in SPb. People say that a Chinese tourist considers his travel as successful after visiting Kremlin, the Hermitage and buying amber.

 

The Baltic wave of dissatisfaction

 

In May 2017, there was a wave of various publications concerning the amber scheme popular nowadays in Saint Petersburg. The market seems to be monopolized by the Chinese: they make amber goods from amber bought also in Kaliningrad, then sell it to Chinese tourists in the closed shops working only for Chinese groups. SPb journalists discovered at least three closed shops - Korona Boutique on Obvodnoy kanal naberezhnaya, 108, souvenir shop in one of the business centres on Blagodatnaya str., 8, and a large shop on Aptekarskaya naberezhnaya, 6. There are also a few closed souvenir shops active in Moscow.

 

All specialized shops working only for Chinese touristic groups are equipped with Unionpay systems and QR-codes system in We Chat. According to Russian news project lenta.ru, profit made by the shops is the chief interest for tour agencies organizing travels in China. They take 30% of the sum, spent by the tourists in the shops. Other 30% go to the Chinese guide who brought the group to the shop. And the remaining sum is taken by the Chinese entrepreneur controlling the business.

 

Daily turnout of such a shop can be more than 20 mln roubles. Journalists counted that, on average, 4-6 buses with 20-40 tourists in each come to every shop daily. These tourists come to Russia buying cheap or zero prices tours, and, according to the contract, the tourists are not obliged to purchase something but only to visit the shop with the group. And here comes aggressive marketing, including threats and psychological pressure.

 

Legally, nothing wrong is with the shops. To register any facts of illegal trade, if any happen, a control purchase must be carried out, which becomes quite complicated with the closed system of sales. This organization form can be a breach of the RF law only if these shops are registered as retail, so they break the public offer terms, and it should be controlled by Rospotrebnadzor during planned or unplanned reviews. Experts also mention national discrimination as only Chinese tourists are allowed to enter the shops, but it can hardly be a valuable disturbing reason. The Korona Boutique was under official control procedure at least once because of an anonymous call about illegal amber kept in stock, but it didn’t influence further work of the shop.

In real life, there are the following problems: Kaliningrad producers of amber souvenirs, bijou and jewellery are not satisfied that the main profit in the scheme is received by Chinese entrepreneurs, and they also mention that these closed shops sell false amber, making a serious negative influence on the whole reputation of the stone and the industry.

 

In search for solutions

 

There are no official statistics about Chinese tourists in the Kaliningrad region, but, according to the general data about incoming tourists flow, 87% of them are Russians and 13% – foreigners. Representatives of tour operating companies working in Kaliningrad mention that they made advertising tours for Chinese tour operators in 2016, but no groups followed. Some of the main restraining factors are: absence of direct air connection with China, no infrastructure to be able to work with Chinese groups (guides, interpreters, transport, food and etc.), incompatibility of paying systems.

 

In May 2017, there was a round table discussion organized by the editorial team of a Russian news project for business, RBC, called “In fight for Chinese tourists: problems and advantages for Kaliningrad”. Many concerned parties participated in the talk, including representatives of the local authorities, Denis Mironyuk (Tourism Ministry) and Aleksey Ignatjev (Regional Administration), head of SPb committee for development of RU-CH cooperation and tourism, Juriy Zuckan, representatives of Russian tour operators and amber goods producers.

 

The operators mentioned that Chinese tourists have an interest in the Cathedral, amber and amber Combine, historic fortification system and the national park zone, the Curonian spit. Local ministry suggests to develop not separate tour destinations but complex programs, combining Kaliningrad with other touristic regions. “We think - why not work together with the leading Russian and European colleagues and create new destinations, including Kaliningrad, Saint Petersburg, Poland and Lithuania. All of our locations are very good to be able to organize and offer it”, - said Denis Mironyuk during the discussion, as mentioned in the report about the meeting published on RBC. Kaliningrad ministry reports about a new touristic program called “The Baltic Amber rings”, offering travel to several cities closely connected with the amber industry.

To reduce influence of “grey” amber schemes, Kaliningrad entrepreneurs organized a public organization, naming certification of amber as one of its main tasks. Obviously, to prevent economic speculation on amber, serious legislation activity is greatly demanded.

 

 

How many Chinese tourists visited Russia?

2015 / 670 000

2016 / 1,3 million

 

How much money does an average Chinese tourist spend in Russia?

$3700 ($530 per day)

 

 

Amber legends

 

Guides already tell anecdotes about magic stories told by illegal Chinese guides working with Chinese touristic groups. According to them, the main part of Chinese tourists are sure that amber is mined and produced exclusively in SPb. The other stories are:

 

- that Peter the Great started the North War only to conquer amber deposits in the Baltic sea;

 - that the main goal of Germany in the II Great World War was the amber room;

 - that there are special pink ants living only in Siberia that bring precious pink amber on their back – this is what brings luck and can be bought only in Russia;

 - that amber is the 7th stone of Buddha;

 - that once in an air crash one Chinese tourist had an amber stone and he survived.

 

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