Turkish-Russian trade may experience the period when it grows the most in Türkiye's history

04 janvier 2023

Türkiye has the ability and human resources to manage all the rings of the retail management chain from the design of products to their production, from procurement to storage, from display in the store to services provided to the customer. If the conditions are met, the Russians can evaluate and transfer this trained human resource for the management of their own affairs, just as the Turks did with the Europeans about 15 or 20 years ago. [Russian market offers strategic opportunities for Turkish retailers - dailysabah.com]

 

 

Since the beginning of the Russian-Ukrainian war, the humanitarian suffering of the war continues while the devastation caused by the conflict is reflected in the global economy. Issues such as the stock market values of Russian companies falling down 99%, the withdrawal of European and American companies from Russia and their impact on economies are still among the current agendas.

Undoubtedly, the retail sector is one sector most affected by the Russia-Ukraine war. After the war, more than one thousand brands of European and American origin made strategic decisions and ended their operations in Russia. When we consider that 11% of the retail market of European companies, including 10% of the Russian market and 1% of the Ukrainian market, are markets where the war is still ongoing, we can say that Western brands have suffered serious damage from this war.

According to the information provided by news sources, Inditex group, which includes brands such as Zara and Massimo Dutti, has decided to close its 502 stores. The famous fast food company McDonald's has decided to close 850 stores, Starbucks has decided to close over 100 coffee shops, and famous brands such as Levi's, which sources 5% of their sales from Eastern Europe and Russia, have decided to close their stores.

Besides these, Russia, especially Moscow, is a very important market for luxury retailing. According to 2021 data, while the luxury clothing, shoes and accessories markets were 320 billion rubles ($4.67 billion), Russia alone was a 5% contributor to the world's luxury sales market. This war also seems to have damaged the luxury retail market. On the other hand, the withdrawal of famous cosmetic brands such as L'Oréal from the country because of the impact of the war also caused a significant loss to the cosmetics and personal care products markets.

No longer a dream

There are 1,700 shopping malls in Russia, 294 of which are in Moscow. According to United Brands Association, 32 Turkish brands are currently operating in Russia with 655 stores. There are over 400 shopping malls and major shopping streets in Türkiye. Turkish brands, which have opened tens of thousands of stores in the country, have opened very few stores in Russia, where there are more shopping malls and customer potential, which indicates that Turkish retail brands do not have a significant presence in Russia.

Of course, one of the main reasons for this was the high rental and investment costs. We can say that this conjuncture created an opportunity for Turkish brands, which could not find a place in shopping malls because of rental costs and occupancy, especially in Moscow, until a year ago. This means that soon, over 3 million square meters (32.29 million square feet) will become vacant in the Russian retail sector. Through this, Turkish brands that are not present in Russia will have an opportunity to take part in the best shopping malls at more affordable prices. Moreover, the Turkish brands which have achieved success in retail and production for years will be the strongest candidate to fill the gap opened by European and American companies in Russia.

Besides brands with growth strategies opening stores in Russia, American and European companies leaving Russia will bring collaboration and new opportunities for Turkish retail companies that have established professional structures and management systems. These opportunities will not only be limited to opening a physical store or growing through an e-commerce sales channel but will lead to the emergence of strategies such as obtaining all sales and distribution rights for Western brands in Russia and Ukraine.

Also, if companies that are financially, managerially and operationally ready have thoughts such as buying a brand or entering into a partnership within their strategic plans, it should also be considered that the current environment may be the right timing for such strategic investments.

Lifeline for market shrinkage?

Undoubtedly, Türkiye will fill some gaps created by the Russia-Ukraine war. By 2025, Türkiye will probably experience the period of greatest growth in the country's history in Russia. But it would be unjustified to paint a positive picture when it comes to war impacting the Turkish economy and its textile economy. In fact, reports reveal the European ready-made clothing market will return to the level of 2019, brand companies predict significant shrinkage in production because of the expected shrinkage in consumption. These results will also show us that especially companies that produce for European companies will produce less and therefore they need to find alternative markets.

In addition, although the Russian economy is negatively affected by this crisis, it may be necessary to interpret it differently when viewed through the perspective of crisis management leadership. Especially in times of crisis, there is a shift from expensive products to cheap ones in the retail sector. This will be an opportunity for brands with good price-quality performance. Turkish brands, which have provided good quality in the retail sector for years at an affordable price, will be the strongest candidate to fill the gap opened by European and American companies in Russia.

On the other hand, according to the Union of Chambers and Commodity Exchanges of Turkey (Türkiye Odalar ve Borsalar Birliği, TOBB for short) Established/Closed Company Statistics, considering 729 Russian-owned companies have been established since the beginning of 2022, 410 of which are in the fields of wholesale and retail trade, it will not be difficult to predict that the trade volume between Russia and Türkiye will increase. The door for service exports to Russia has also been opened.

There is a truth that the world accepts. Especially in the last 20 years. Türkiye has thoroughly learned professional retail and brand management. Turkish retail companies have received consultancy services by paying serious prices for learning the dynamics of retail such as branding, merchandise planning, merchandising management, product management and transfer of know-how. On the other hand, they have preferred the learning method of receiving support from a professional employee from European senior managers trained in the relevant sector.

In addition, it would be appropriate to emphasize that these facilities have created highly significant business opportunities not only for professionals working in the retail industry but also in complementary sectors providing services in the retail sector such as retail management consulting, information technologies, advertising management and shopping mall management.

 


Paese: Russie| Turquie
negozi| Commercio| Türkiye| Dettaglio| vendita al dettaglio| catena di approvvigionamento| Produzione

Altre notizie