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. Last Updated: 07/27/2016

Polish Bazaar Loses Russian Buyers

WARSAW, Poland -- At first glance, the gigantic bazaar looks much the same as ever: crowded, filthy, occasionally violent -- and teeming with bargains.

About 5,000 vendors set up tables every morning at the rundown, communist-era sports stadium. They come from Poland but also from Armenia, Latvia, Lithuania, Ukraine and Russia. They sell "Shetland" sweaters from China, pocket calculators made by "Shark," Soviet army binoculars and night-vision equipment that looks like it came straight from a tank.

As always, the prices are low enough to shame Wal-Mart. Sweaters cost $3.75 and trousers $5, even before any haggling. Pirated copies of Windows 2000 available in Russian, Polish and English go for $4. Powerful Russian binoculars, with anti-glare lenses, fetch $20.

But while the market looks like its old self, the mood has soured. Once a magnet for bargain-hunters from the former Soviet Union, the market is losing those customers.

The former Soviet republics provided the most customers in the years after communism collapsed. But they stopped shopping when Russia plunged into deep financial crisis in 1998 and have never really returned, even after the Russian economy began to recover.

The decline reflects changes in Central and Eastern Europe. New markets have usurped Warsaw's role as a shopping center for Minsk, Kiev or Moscow. Asian producers, selling through Poland's sizable Vietnamese community, have undercut Poland's sweatshops. And many companies now use Warsaw simply as a distribution center.

"When the Russians came, business was very good," said Wanda Gaier, a Pole who trades in surplus Russian military binoculars, sharp-shooter lenses and, during the summer, sunglasses. "Nothing is selling very well right now."

According to Damis, the company that runs this market, the number of vendors peaked in 1997 at 7,000, just before Russia's financial crisis and dropped to 5,000 in 1998. Estimated sales dropped from about $550 million in 1997 to $250 million in 1998 and have never recovered. Damis estimated that sales last year were barely over $200 million.

Of course, the figures are but guesses. This is, after all, a place with no price tags, no receipts, no sales taxes and certainly no audits.

But vendors and Damis executives agree that the business has plunged, and that the reason is apparent. "The loss of Russian customers really hurt us," said Dorota Lutomirska, general manager of the market.

The market, which opened in 1989 as communism in Poland was collapsing, never catered to Poles. Instead, hundreds of Polish sweatshops stitched together cheap clothing tailored to the tastes and limited buying power of people to the east.

The market also became a hub for people bringing goods in from the east. It remains a huge outlet for contraband, like counterfeits of brand-name clothing. Surplus Russian uniforms have always been in supply, along with used tools, automobile parts and practically anything that might find a customer.

It can be a rough place. Darek, an Armenian who sells pirated software, came here five months ago loaded up with merchandise. But the Polish police made one of their periodic raids and confiscated his entire supply of CD-ROMs. That left him in debt to his suppliers, so he now has to repay hundreds of dollars before he can make money.

"I have debts, and if I don't pay off those debts, they will blow my head off," he said. As if on cue, two burly Armenians showed up at his table and began talking with Darek as they sifted through his collection. As soon as they left, he cut off further discussion about his business.

Not so many years ago, Polish garment-makers sewed large volumes of clothing, priding themselves on understanding the tastes and budgets of East Europeans. They set up hundreds of factories around Warsaw and Lodz.

Today, most textile business is controlled by Vietnamese, who operate in packed alleys just outside the stadium. The Vietnamese import hundreds of cartons of clothing every day from Asia, mostly from China. Most of the traders came to Poland during the communist era or followed their relatives here.

Many Polish vendors say the flood of Asian imports is wiping them out. "They are killing the market with their cheap stuff," said one longtime Polish vendor. "They can sell pants for 13 zlotys [about $3.25] and a blouse for 4 zlotys. We cannot possibly sell things that cheap."

One young Polish woman said she comes here to buy perfume. Others have more mundane tastes.

"Cigarettes are very cheap here, and with my scholarship this is the only way I can afford to smoke," said Jozef Wisniewski, a student at Warsaw University. "Sometimes I buy vodka, too."