Sales in the Russian trading district of Yabao Road, also known as Russian town, have dropped by 70 percent since the economic crisis, forcing the closure of nearly 600 Chinese businesses, according to one proprietor.
Liu Yuqi, deputy manager of Tianya Plaza, the largest shopping destination in the neighborhood, said the 600 businesses represented about 10 percent of traders in the capital's largest non-governmental apparel wholesale market.
"It used to be that when some people went out of businesses here, the storefront would soon be filled out by others who are eager to vie for market share," Liu said.
"But this time none of the 600 closed stores have found new owners. It seems few are interested in venturing in, and the situation is likely to continue into next year when more people will perhaps leave."
Liu said sales at the market used to reach $4 billion a year, but had fallen by 70 percent since the economic downturn.
Traders said the downturn was exacerbated by the Russian government crackdown on "gray Customs clearances" - the common practice of smuggling Chinese goods across the Russian border. In Moscow, Cherkizovsky Market, the city's largest wholesale market for Chinese goods, was closed in June.
"Many of our customers said they could not longer sell goods that are not cleared through Customs, so they've cancelled orders with us," said trader Zhou Peifa, who runs a mink coat store.
"Mink fur is among the hardest hit sectors because it's much more expensive than other fur, and fewer people would buy it with less money," he said. "I'm losing millions of yuan every day. Maybe it won't be long before I put up the shutters, too."
Wu Dahui, director of the strategy research center under the Institute of Russian, East European and Central Asian Studies, said sales had fallen across the entire sector.
"Although non-governmental trade between China and Russia fell by 34 percent during the first three quarters this year, it will pick up gradually given the huge market demand for Chinese goods within Russia."
A shopkeeper surnamed Liu told METRO that she recently put a 15-sq-m storefront out to lease but there had been no interest in it.
"I would only charge 8,000 instead of 10,000 yuan a month if anyone showed interest. But it's still difficult because the supply seems to have exceeded the market demand," she said.
The average leasing price for a 23-sq-m store on Yabao Road has dropped by more than 50 percent to 16,000 yuan, according to figures from Tianyuanhaoye, the biggest real estate agent in the region.
"This should be a busy season for Yabao Road, as Russians arrive to make bulk orders of clothing for the winter. But the situation is no better than last year. I can't see any signs of recovery," Liu said.
Qi Zhongshu, a Russian language translator who lost his job six months ago, said he could not find a new job on Yabao Road.
"Many translators like me have become jobless due to the wave of store closures here," he said. "I've worked at Yabao Road for four years and nothing like this has happened before."
However, Wu said Russia's domestic consumption relied on China because Russia could only produce only one fourth of its needed consumables.
"But the market does need some corrections. With the crackdown on gray Customs clearances, branded quality Chinese goods will have a better chance to win in the market in the near future. So it's time for Chinese manufacturers to build on their quality and brand through technological upgrading," Wu said.
