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INDUSTRY AND SERVICES
The Promenade mall in Almaty
Leisure activities at Astana’s Khan Shatyr complex, which also contains shops and restaurants
People have gone from shopping in kiosks in the late 1990s to shopping at hypermarkets today. While some of the older generation still prefer to shop at bazaars, the younger generation has embraced modern retail oversaturated. They are looking to Kazakhstan and Azerbaijan to get a foothold in the CIS (Commonwealth of Independent States) and capitalize on market expansion.” Among the food retailers in Kazakhstan, Ramstore – which is owned by Turkey’s Migros Group – has established itself in the number-one position, despite competition from local retailers such as SM Market and Green, and Russia’s Vester. As with fashion retail, the food market is also modernizing rapidly. Germany’s Metro Group set up its first cash-and-carry outlet in Astana in late 2009, and opened four more stores in just 16 months. “Kazakhstan looks good to us. It’s premature to be ecstatic, but the macro indicators are positive,” says Stephen Kreeger, managing director of Metro Kazakhstan. Metro plans to open three new stores in northern Kazakhstan this year. The entry of wholesalers such as Metro to the Kazakh market are hastening the transition from the bazaar system INVEST IN KAZAKHSTAN 2011
– which blossomed after the breakup of the Soviet Union – to a modern retail sector. Revin estimates that around 55 percent of retail turnover now goes through formal channels – though it is difficult to estimate since much of the bazaar trade is cash in hand – and he expects the transition to be fairly quick. “The move from bazaars to formal retail is not a slow process,” he says. “People have gone from shopping in kiosks in the late 1990s to shopping at hypermarkets today. While some of the older generation still prefer to shop at bazaars, the younger generation has embraced modern retail. The proportion of goods sold through the bazaars is falling. I think the shift will be completed in the next eight to 10 years.” “I think in future there will be a move away from markets,” agrees Kreeger. “The elimination or reduction in markets could come about simply owing to market forces or from an effort to upgrade sanitary and hygiene standards.” n