Asian Summit of retail and distribution: advice from the Gurus of retail business

Consumer demand steadily declines in Kazakhstan. The volatility of the exchange rate, decline in business activities of companies and, as a consequence, falling solvency of population negatively affected the domestic trade sector. According to the recent data, the amount of inventory in the warehouses of the major suppliers has reached 308 billion tenge, or about 1 billion dollars.

How to overcome the decline in consumption and return the former level of sales? How to adapt to the new environment and to benefit it? In search of an answer to the key question, NCE RK "Atameken" brought together on a single site all the participants of this multifaceted process: manufacturers, retailers, distributors, founders of the logistical and financial structures, representatives of branch departments and associations.

The Asian Business Summit of retail and distribution of consumer goods was opened by Kayrat Mazhibayev, chairman of the Trade Committee of the National Chamber of Entrepreneurs, Chairman of the Supervisory Board of a group of companies "RESMI". According to him, Kazakhstan is used to crises, they occur with cyclical frequency. But this one is the most special and the most difficult, because it originated within the country itself not overseas. And it must be solved from within with a high degree of local content.

"One of the biggest mistakes that entrepreneurs make is weak balance. This is an overloaded liabilities of a company, which has debts in foreign currency. People pay you in tenge and therefore the obligation should be in tenge. The main role in this process plays work with the banks, conduction of active negotiations. The key formula for success is to be as accessible to the consumer, to be in contact with the consumer. The principle of “value for money” will operate in the next 2-3 years. And the best products for a reasonable price can only offer a well-organized retail chains and discounters", - shared Kayrat Mazhibayev.

Summing up his speech, K. Mazhibaev noted three areas that are of interest to him as an investor now - internet - solutions (electronic payment system, fast transaction), the forthcoming privatization program and good assets of stressful owners.

The highlight of the event was the speech of a visiting guest Evgeny Butman, chairman of the Board of Directors of “Ideas4retail”, Guru of the Russian retail business, who was at the forefront of its foundation in the distant '90s. By the advice of an "experienced" retailer, we need to reconsider totally relationships with suppliers. He named distributors archaic, dying class, who are gradually replaced by smaller market intermediaries with the help of e-commerce. In the struggle for margins can survive only retailers, who apply new ideas and provide customer service. "Another point is essential for Kazakhstan. I spoke recently to one entrepreneur from your country, and he specified the amount of the transaction in dollars. While your economy and consciousness of the business is dollarized, as long as you keep the daily settlements in US currency, economic growth can only be a dream. For example, we introduced a ban on calculation of rent of retail space in dollars through long negotiations with the Ministry of Industry of the Russian Federation. A similar revision of the legislation is necessary in the Republic of Kazakhstan ", - said Evgeny Butman.

 The secret of success from the owner of LLP "German court" and the group of companies "Becker and K" Makhmoud Shadiev is a loyal team. "In any business, there are two fundamental conditions for its success - is an idea or a desire to create a quality product, and the people who help you achieve the goals. Even in a crisis you shouldn’t reduce labor remuneration, try to keep each employee. Revenue growth in this case is necessary to achieve through expansion of coverage on the market. It is even possible to re-brand", - recommend a prominent businessman.

Almost all successful retailers came together in a single opinion: in a crisis it is important to have a "moderate appetite". According to them, it is necessary to make a serious re-evaluation of its assets, relentlessly to get rid of expensive projects that do not have a direct impact and not to spend on property (offices, cars, furniture, luxury). In short, not to live in illusions.

To sum up the first day of the Asian Summit, a board member of NCE RK "Atameken", Deputy Chairman of the Board of NCE RK Gulnar Kurbanbaeva reported that the state will provide assistance in the immediate future. From 1^st of January 2016 will come into force the Law "On regulation of commercial activities." It will be a real revolution in the retail business. It will make more harsh the fight against illegal trade and it will enhance the maximum output of unregistered companies out of the shadows. And then, probably bona fide retailers and distributors will occupy the vacant niche and good changes will occur.