Russian jewellery chain Adamas has announced plans to establish retail outlets in Uzbekistan, alongside other CIS countries such as Kazakhstan, Kyrgyzstan, Azerbaijan, and Belarus. According to representatives of the company, at least 20 shops from the chain are expected to commence operations in these countries by the close of 2024.
Expansion into Uzbekistan and beyond
Adamas is actively seeking employees for their forthcoming shop in Samarkand, as the company looks to tap into the Uzbek market. Founded in 1993 by Andrei Sidorenko and Vladimir Veremeev, the chain has grown to encompass over 200 shops across 80 cities in Russia. Adamas achieved a remarkable 31.6% y/y growth in total sales in 2023, amounting to RUB 9.8bn ($109.2mn). INFOLine estimates rank Adamas as the fifth-largest jewellery chain in Russia.
Another prominent jewellery chain, Sokolov, has already established shops in several countries, primarily operating under the franchising model in the CIS region. Nikolai Polyakov has revealed plans for franchise openings in Kazakhstan, Kyrgyzstan, Uzbekistan, Belarus, Moldova, Azerbaijan, and Armenia.
In 2023, Sokolov also inaugurated three self-owned shops in Shanghai, with future ambitions to become a leading foreign mass-segment jewellery brand in China by opening approximately 400 shops within five years. Sokolov's website cites the opening of a franchised shop in Mongolia in the previous year, in addition to existing outlets in Belarus and Kazakhstan. No comments were provided by MIUZ Diamonds and Sunlight.
Challenges and opportunities
While Russian jewellery products are considered competitive internationally, industry experts recognize potential challenges in meeting regulatory requirements specific to each country. Additionally, the assortment of jewellery designs and understanding local buyers' preferences are crucial factors to consider. Despite these challenges, Uzbekistan is viewed as the most promising country among Central Asian nations for the expansion of Russian retail chains.
The country's growing population, high GDP growth rates, low retail competition, and a significant proportion of young consumers make it an attractive destination for development abroad. However, jewellery chains may face limited availability of modern shopping centres and a substantial share of the gray market in Central Asian countries. Furthermore, investments in self-owned shops in foreign countries may require longer payback periods compared to franchise development.
Positive outlook for Russian jewellery market
In Russia, preliminary estimates by INFOLine suggest that jewellery sales will witness a y/y growth of 7-10% in 2023, reaching a total value of RUB 330-340bn ($3.7-3.8bn). This projected growth follows a decline of 6.7% in 2022 due to increased consumer savings. Market participants attribute last year's dynamics primarily to the rise in average jewellery prices.
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