Text size:

  • Small
  • Normal
  • Large
Emirates Airline was named in the top 10 first class cabins by therichest.com. Find out what position it came here.
Store brands are finding opportunities outside their comfort zones, expanding into markets such as Iraqi Kurdistan, Kazakhstan and Azerbaijan.
Store brands are finding opportunities outside their comfort zones, expanding into markets such as Iraqi Kurdistan, Kazakhstan and Azerbaijan.

Retailers target new frontiers

But locations such as Iraqi Kurdistan and Kazakhstan could be tough to succeed in

Retailers are increasingly setting their sights on frontier markets such as Iraqi Kurdistan, Kazakhstan and Azerbaijan but analysts say their success may be hampered by a lack of consumer information and infrastructure in these new shopping territories. The large populations and nascent retail centres in these countries, combined with increasing political stability, make them attractive targets for major names such as Land Rover and the Saudi Arabian retail conglomerate Fawaz Alhokair.

Simon Marshall, the chief executive of Fawaz Abdulaziz Alhokair Fashion Retail, said its first Zara shop in Kazakhstan, which opened in February, took ?290,000 (Dh1.3 million) on its opening day. "It actually opened with the largest turnover for an opening day for a Zara store anywhere in the world to date," Mr Marshall said. Michael Atwell, the head of Middle East operations at Cushman and Wakefield consultancy in Dubai, said many investors were eyeing these markets, but with few experienced retailers in those regions it was murky territory.

"A lot of people see this as the next developing markets. But I think you need to proceed with a lot of caution," Mr Atwell said. "There are a lot of unknowns there. What's the affordable spending power? What's the ability for retailers to go in and trade?" That has not stopped Land Rover. Sardar Trading Agencies, its regional franchisee, said earlier this year it would start selling the 4x4 vehicles in Erbil, Iraq. The French retailer Carrefour recently announced it, too, would open a hypermarket in the same region of northern Iraq, as part of the upcoming Family Fun Mall, The Kurdish Globe newspaper reported. And Fawaz Alhokair has just signed leases for 68 more stores in Kazakhstan and Azerbaijan, said Mr Marshall.

The company is also looking at northern Iraq. "Everybody is," he said. "But at this moment in time it is not in our immediate plans. We're getting approached by a lot of our brand partners who are interested in the region." Developers are getting into the game as well. Mane Mall, which will house 150 brands, will open its doors at the end of next year in Erbil. Jamie Majid, an investment director with BTWShiells, which is building and managing the mall, said there had been a big demand for retail space.

"There has been an increase in disposable income, there is obviously not much competing retail as it is an emerging market," he said. "It's quite easy to set up over there with tax breaks and no duty to bring goods into the country. And the Kurds are like any other people around the Middle East - they like to shop and go into leisure places and restaurants." Mr Atwell said he expected retail in these markets to follow the model used in eastern Europe, where the supermarket chains such as Tesco and Carrefour entered first and helped to build demand for additional shops around their stores.

"It's often the food retailers, the hypermarkets ? everybody needs to eat," he said. But Majid Al Futtaim Properties, which is planning a US$4 billion (Dh14.69bn) regional expansion to build shopping centres in countries such as Syria and Egypt, is holding off on these new markets until the rewards outweigh the risks and it has the local knowledge and structures in place. "It takes a lot of elements to do things successfully," said Shahram Shamsaee, the senior vice president of retail at Majid Al Futtaim shopping malls. "And you need to be set up for it. If you try to do everything, you end up doing nothing very well."

aligaya@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National