Since Russia invaded Ukraine global brands have been working round the clock to execute the largest economic decoupling in human history. This unfortunate scenario is a tectonic shift that negates the spirit and culture of globalisation that the world has pivoted to since the end of the Cold War in 1989.


Well-known brands like Mastercard, Amazon, Burger King, Coca-Cola, Starbucks and many others have joined this movement. Here are some of the over 150 global brands who exited:

McDonald’s closes all Russian restaurants
McDonald’s temporarily closed all of its restaurants in Russia and paused all operations in the market, following increased pressure to take a stand. They also committed $3 million to support Ukrainian refugees as part of their series of charitable donations.

Amazon stops sending products to Russia
Amazon has stopped shipping products sold on its retail website to customers based in Russia and they also cut off access to their video streaming service.

Starbucks suspends business activity at 130 stores in Russia
Starbucks has announced that it would immediately pause operations at all 130 of its stores in Russia. The coffee chain’s licensee will also provide support to the almost 2,000 partners in Russia who depend on the company for their livelihood.

Netflix shuts down operation in Russia
Netflix has shut its operations in Russia and said no new customers will be able to sign up. Although it is unclear what will happen with existing accounts.

Implications

The knock-on effect of the great decoupling from Russia will have a major impact on the bottom line and guidance of most global brands given that Russia was ‘part and parcel’ of the global economy. It is uncertain if there will be a reconnection or re-admission of Russia into liberal international order and market if the current government/structure in Moscow is in situ. As to whether there is a further risk of another major economy being cut-off severed from the globalised market, it is yet to be seen. Brands must anticipate, pre-empt the ripple effect of geopolitical conflicts and events.

About Stagwell Group

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