Guiding lines: The Great Silk Road of the 21st Century
The routes of domestic and foreign trade operators in Russia and the CIS - from west to east - is reminiscent of the roads once used by traders in the distant past. In the 19th century the Great silk road, on which the caravans of merchants stretching from Istanbul to China, ran through the present territories of Uzbekistan, Kirgizia, Azerbaijan and Kazakhstan. With one such road passing along the border of Western Siberia. Currently in some of these areas trade is again starting to blossom. Experts name large cities in Kazakhstan and Siberia, such as Novosibirsk, Krasnoyarsk, Irkutsk, Omsk, Tomsk, Alma-Ata, Astana, Aktau, Atyrai, as the most developed on the east side of the former USSR. Alma-Ata now even has the reputation of being the cradle of retail at the start of the 21st century.
Style of work
It is well known that retailers go first of all where there is solvent demand for goods. For example, the average salary in Novosibirsk in 2006 was 8,195 rubles. In Krasnoyarsk it reached 8,700 rubles and in Irkutsk 10,000 rubles. In large cities in Kazakhstan salaries last year on average reached 8,000 rubles. In comparison, in Kaluga, the average salary last year was equal to 9,900 rubles. In the Sverdlovsk region it stood at 10,500 rubles and in Yaroslavl at 7,970 rubles.
Both Russian and foreign retailers have got used to working in Russia and the CIS through franchising. From the start of the formation of the market they thus moved ahead into remote regions. For example, the Danish chain of clothes shops Companys began in Moscow, on Tverskaya Street. But in 2005 it had already settled in the Astor Plaza shopping center in Rostov-on-Don, which was constructed by local developer ADM Group. Last year the company reached Alma-Ata and has rented space there in Mega-Mall, a modern shopping center chain, also built by a local developer, Astana Motors.
Gain of the east
However recently there is a growing tendency for foreign operators to open representatives in cities of Siberia and Kazakhstan without intermediaries. If observers considered as a break through Spanish clothes companies Inditex Group which last year got Zara as its Russian partner and independently brought its Massimo Dutti brand to Moscow, then America's Esprit has gone one step further by opening a shop in the Alma-Ata Mega Mall without franchising.
Ramstor chain of hypermarkets, which also manages Turkish Ramenka, also operates without franchising. It also began in the capital of Russia, and then built its own shopping center in Alma-Ata and Astana and in 2007 entered the Krasnoyarsk market. But then comes Sweden's IKEA. It takes on everywhere the role of developer without any intermediaries. Recently the company started to construct Mega in Novosibirsk and plans to open a shopping complex in Alma-Ata in 2010.
Furthermore Germany's Metro Cash & Carry is represented in Tyumen and by the end of 2007 plans to invest almost 66 million euros in the construction of three shopping centers in Omsk, Novosibirsk and Krasnoyarsk.
Some Russian traders who are willing to work in the farthest regions on their own are also following foreign operators on the Great Silk Road. Lenta, a St. Petersburg chain of hypermarkets became the first federal player in the small wholesale market in Siberia. Following Lenta is St. Petersburg distributor of household goods Laventa, developing a chain of hypermarkets under the Santa House brand, which has announced its intention to open at least six stores in Krasnoyarsk, Novosibirsk, Omsk,
Apparently, retailers in remote regions either build their own trade premises, or find areas thanks to local developers if they have modern shopping centers. But some federal level development companies look after and have even successfully rented plots in Siberia and Kazakhstan. For example, Moscow's RosEvroDevelopment and Leon Building. Laventa has also found its first space for a hypermarket in the Planeta shopping center, which was built by RosEvroDevelopment in Krasnoyarsk. This year the large scale plans of domestic group of companies Regiony became known. There is an opinion, that for developers it is more convenient to international trading operators to simultaneously master both the central and remote edges of any country as being transnational giants they have developed a style of work suitable for it.
In Russia an example of such an approach can be the development of the Mega chain of shopping centers. In 2006 IKEA opened its hyper centers in the Moscow suburbs and the Nizhniy Novgorod region in parallel. If we talk about professional developers of shopping centers, foreign companies have not yet arrived in the country, and domestic ones are still busy with development of cities nearest to the center. When they are convinced that every single plot of land has been developed, they will go further out. And only a handful of them look 20 years ahead.
The arrival of retailers in the regions before other market players seems almost right. From avant guarde times merchants have developed new land. It is worth even remembering the legendary names of Russian merchants-pioneers such as Afanasy Nikitin, Grigory Shelekhov and the Stroganovykh family, which traveled on three seas of the Great Silk Road. The fate of merchants has always been a half-nomadic way of life and has lied in their own hands with farmers and builders following in their footsteps to unknown lands.