Market News

Belarusian C&F market – enormous potential and little competition

The Belarusian clothing and footwear market, when compared to its neighbours, is admittedly unsaturated, marked by a significantly low number of international brands, suitable retail spaces, competition level, and is still on its early stage of development. This, in turn, implies the capacity and sufficient potential for further growth.

General outline of the Belarusian clothing and footwear market

According to the official statistics, the retail sales turnover in 2018 amounted to BYN 1,542.6m (€653.13m), an 18.6% increase, year on year, in the clothing segment and BYN 717.1m (€303.6m), a 13.9% increase, year on year, in the footwear segment. The share of domestic products hovers around 50%.

However, these figures present an illustrative but not an exhaustive account, since a significant share of products present at open-air markets, which is still an important shopping destination in the country, marked by the relatively high number of “grey market” goods.

According to the MASMI 2017 survey, 55.6% of Belarusians buy clothing and footwear at open-air markets, and the share is gradually dropping – in 2013, the figure was 84.1%. This trend stems from the fact that corresponding products of the same brands in the neighbouring countries are some 10-20% lower and many merchants, as well as final customers, also claim an additional 21-23% refund back through the tax-free shopping system, importing the goods under the pretext of personal use.

At the same time, in terms of official retail units, the market is rather unsaturated. Specifically, recognised international brands operate rarely more than one store, e.g., Guess, Gant, Lacoste, Tommy Hilfiger, Tommy Jeans, Massimo Duty, Marc-o-polo, Armani Exchange, U.S. Polo Assn.; Calvin Klein Jeans, two stores; Pierre Cardin, three; LPP, eight stores, including Reserved (2) and House (3); Inditex eleven stores, including Zara (2) and Bershka (2).

Recent and future launches

H&M entered the country only in September 2019, with the launch of a unit in the Galleria Minsk mall, creating a line of a few hundred people, hours before opening.

LPP Group, a major Poland-based retailer, is planning to expand on the market with the launch of self-operated flagship stores of all five of its brands (Reserved, Sinsay, House, Cropp and Mohito) in the Triniti mall in Grodno in 2020. Previously, these units were present on the market via franchising but the company cancelled its partnership with local business in autumn 2019 and decided to develop the business directly. Selected units will also open in Minsk.

It is worth noting that the Triniti mall in question has been put into operation only recently and is one of the few in the country that meets the requirements of international brands. The suitability of trading floors is one of the key factors considered by retailers when entering a market, along with social-economics conditions, and Belarus lags behind its neighbours in this respect.

Technically, there are some 610 shopping centres in the country and 772.6m2 of trade floor space per 1,000 citizens, but the significant part of the units are half-empty, charter97.org reported, citing Vladimir Karyagin, Chairman of the Presidium of the Republican Confederation of Entrepreneurship.

This may be explained by the fact that most of these units are still far from the European standard and thus disregarded by international businesses who will not compromise in this area. It is safe to assume that the future expansion of fashion brands on the Belarusian markets will be strongly related to the development of suitable retail spaces, complying with the up-to-date industry standards.

In general, the Belarusian clothing and footwear market represents a significant niche with unrealised potential and little to no competition. The formed demand is to a great extent satisfied, under current circumstances, in neighbouring countries, directly or via resellers. The average gross monthly wages in Belarus in 2018 were €411, which was less than in Russia (€643) but higher than in Ukraine (€329), indicating sufficient purchasing power of the population. This altogether creates an enabling environment for the growth of international brands, some of which has already started developments on the market.

Leave a Comment

Your email address will not be published.

You may also like

Market News Trends

Polish state to consolidate the agri-food sector

post-image

The Ministry of State Assets (MEP) is working on the merger of companies from the agri-food sector, which are under state supervision. The National Food Holding (NHS) is to be established in this way.

June: selection of companies for the holding company

The consolidation will be based on the Krajowa Spolka Cukrowa, which is present on several markets, including sugar, starch and grain. The objective is to create a strong agri-food holding and enter new business segments. The idea behind the consolidation undertaken by MEP is that “on the one hand, consumers should receive competitive prices, and on the other hand, farmers and manufacturers should be well paid for their products”.

Currently, 48 companies that could be part of the holding are being analysed. The plan provides that the companies to be consolidated are to be selected in June. By the end of the year, more detailed research…

Read More
Market News

Robotisation in retail & logistics – overview for 2020, part II

post-image

Bartłomiej Łatka, Sales Director at Euvic IT, writes in the second part of the article about what robotization has to offer to the retail segment in 2020.

Mobile robots

Bartłomiej Łatka, Sales Director at Euvic IT

Recently, mobile robots have been pushing people out of storage space in large warehouses. There is a shortage of warehousemen throughout Poland, and warehouses often located on the outskirts of cities or even in the fields, struggling to provide staff. Especially during the holiday or flu season. Relatively high salaries, regulated by the law for working at night or on public holidays, as well as the risk of loss of manning – all that makes automated internal transport systems seem to have the best years ahead.

Among mobile solutions in trade and logistics we can distinguish the following groups:

  • Transport P2P (Point-to-Point) – AMR trolleys carrying baskets…
Read More
Market News

Glovo grows in food delivery in Poland

post-image

The Glovo mobile application, which specialises in on-demand deliveries, has just exceeded 1 million downloads in Poland (App Store and Google Play). Although a wide range of products can be ordered with Glovo, it is widely used to deliver food.

Glovo in Poland: 1 million application downloads

Glovo has been operating in Poland since July 2019, following the acquisition of PizzaPortal.pl. The idea behind the application is to be able to order “anything” and delivery takes place in less than an hour. Glovo has over 2,700 partner points in Poland, including McDonald’s and KFC restaurants and Biedronka and Carrefour shops. The application operates in 30 cities in Poland, but Glovo announces a systematic expansion of its offer and development of all order categories. In total, around the world, the application is used by approximately 2.6 million users per month. It is available in 22 countries and about 550 cities.

The most numerous…

Read More
Market News

Tesco is developing a click & collect service in Poland

post-image

Tesco develops its activities in the e-commerce segment. In May, the company added five new cities for the “Zamow i odbierz” (click & collect) service in Poland.

14 click & collect points

New locations where the service is available are Czestochowa, Zielona Góra, Opole, Kielce and Jelenia Gora. Thanks to the extension of the network of collection points, it is now possible to serve 15% more customers under this solution. In total, currently the click & collect option is available in 14 Tesco stores across the country. Around 2,000 customers use such purchases every week. The chain announces that it will soon introduce further novelties extending the scope of services.

Purchases made in the “Zamow i odbierz” option can be picked up in the store or delivered home by a taxi company cooperating with Tesco. When completing an order via taxi, payment must be made online. In case…

Read More
Market News

Robotisation in retail & logistics – overview for 2020, part I

post-image

As far as saturation with robots is concerned, the Polish market is unfortunately in the tail of the rankings, which is quite surprising if we take into account, for example, Polish GDP (where we have 22nd place in the world) or Human Development Index (Poland with 32nd place in the world).

Bartlomiej Latka, Sales Director at Euvic IT

In 2014, roboforum.pl wrote that “Poland, with the value of the index at 18, is at the bottom of the ranking. Higher density of robotization than Poland is characteristic not only for countries that are among the leaders in this respect, but also for countries with a similar level of development, such as Hungary or Slovakia. The average robotisation density in Europe is 4.4 times higher than in Poland (compared to the previous year, Poland reduced the distance to Europe by 1.1 points),…

Read More
Market News

Camaieu is leaving Poland

post-image

Camaieu clothing chain, specialising in women’s clothing, is leaving the Polish market. The company’s website has already stopped accepting orders and the stationary stores are to be closed at the end of June.

Camaieu is looking for an investor

As far back as 2018. Camaieu operated about 40 stationary stores in Poland. However, the chain has recorded negative sales dynamics in recent years, and the number of stores has been gradually decreasing. Currently, it amounts to 25. In total, the chain operates about 1 ,000 stores in 18 countries, more than half of which are located in France.

The COVID-19 pandemic and the closure of shops in shopping malls have worsened the company’s situation, but it has already been struggling with financial problems. According to Business Insider, the company planned to implement a restructuring plan from the spring, which was to include the closure of 125 stores in…

Read More