VkusVill, the Russian food retailer, aims to expand its operations internationally with the opening of its first store in Almaty, Kazakhstan. This move marks the company's first physical retail venture outside of Russia, involving an investment of several tens of mn rubles. Despite the substantial financial commitment, industry experts expressed concerns regarding potential challenges in the Kazakh market.
VkusVill has been engaged in exporting products to Kazakhstan since the summer of 2023, servicing 125 stores across the country. This distribution is part of a broader strategy that includes markets like the UAE and China. Following positive feedback on its concept and products in Kazakhstan, VkusVill established a local warehouse and office to support its expansion efforts.
Details on the total investment for the Kazakhstan project remain undisclosed. However, Mikhail Burmistrov, head of the Infoline-Analytics agency, estimates that the new store's setup could have cost between RUB 5 and 7 mn ($53,550 to $74,970). Despite the optimism displayed by VkusVill regarding its Kazakh venture, experts like Burmistrov caution about potential difficulties, notably the limited capacity for food production within Kazakhstan. This limitation could mean that only 35% of the store's product range will be sourced locally.
Challenges extend to the economic environment, with the lower income levels in Kazakhstan potentially affecting consumer spending patterns. Irina Bolotova, a partner at Pro.Story, highlights the importance of adapting the product assortment to meet local tastes and budget constraints, a task that she describes as far from trivial.
Comparatively, the most successful foreign entrants in the Kazakhstani retail market have been budget-friendly stores. Russian discount chains such as FixPrice and Svetofor expanded their presence, with FixPrice operating 200 stores across Kazakhstan since its entry in 2019.
The landscape for foreign retailers in Kazakhstan has shown varied results. X5 Retail Group, a major Russian FMCG retailer, discontinued its operations under the "Pyaterochka" brand in 2007 after a brief tenure that began in 2004. Conversely, Turkish retailer Ramstore demonstrated the potential for long-term presence, maintaining operations for 22 years before its unexplained exit in 2020.
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