In recent years, the economy of Uzbekistan has been actively developing. In 2023, economic growth compared to the level of 2022 reached 6%. GDP per capita increased by 16.03%, Gazeta.uz reports. The annual population growth by an average of 2.1% increases consumer activity of the population. In addition, the country is actively striving to become a member of the World Trade Organization (WTO), adopting new laws aimed at developing entrepreneurship and trade, as well as creating favorable conditions for investors.
But here's the most interesting thing: the markets have not yet been divided between international giants. This opens up unique opportunities for new players, especially in the field of distribution.
The numbers speak for themselves. According to INFOLine, in 2023, there were more than 50 large distributors in the FMCG segment on the Uzbek market. The introduction of new IT solutions and automation of business processes contribute to the development of the market and allow companies to work more efficiently.
What makes the local market attractive to distributors? Why does the bazaar remain the main competitor of chain supermarkets? And how does the implementation of software help to develop business? The founder and CEO of one of the largest distribution companies Durust, Yodgor Yuldashev, told us about this.
But here's the most interesting thing: the markets have not yet been divided between international giants. This opens up unique opportunities for new players, especially in the field of distribution.
The numbers speak for themselves. According to INFOLine, in 2023, there were more than 50 large distributors in the FMCG segment on the Uzbek market. The introduction of new IT solutions and automation of business processes contribute to the development of the market and allow companies to work more efficiently.
What makes the local market attractive to distributors? Why does the bazaar remain the main competitor of chain supermarkets? And how does the implementation of software help to develop business? The founder and CEO of one of the largest distribution companies Durust, Yodgor Yuldashev, told us about this.
Durust LLC is a distributor in the FMCG segment, has over 15 years of successful experience in the Uzbek market. During this period, he worked in the grocery, dairy and fish product segments. The team consists of more than 360 field personnel who work throughout the country.
The Unique Market of Uzbekistan
The market of Uzbekistan is truly unique and stands out from other CIS countries. Let's look at Russia, Belarus and Ukraine. In these countries, traditional retail has long been captured by large federal chains, such as Pyaterochka and Magnit in Russia or Magnum in Kazakhstan. In Russia, for example, chain supermarkets account for about 80% of the market (as of 2023).
In Uzbekistan, the situation is completely different. Yes, we also have chains such as Korzinka, Makro, Havas, but they occupy only about 20% of the market. The bulk of trade is still concentrated in traditional bazaars and small retail outlets. This creates a special dynamic and diversity in the market, which is beneficial for both business and consumers.
According to research by the international retail company Makro, the share of modern trade should almost double - from 6% in 2021 to 10.9% by 2026. This confirms that chains are slowly but surely capturing the market, although traditional bazaars still dominate. Analysts predict that by 2028, the share of chain supermarkets could reach 35%, which is due to the growth of urbanization and changing shopping habits of the population.
However, traditional bazaars continue to hold their position due to the cultural characteristics and preferences of Uzbek consumers. More than 75% of the population goes shopping at the bazaar, despite the presence of modern supermarkets.
Bazaar or supermarket?
For local consumers, this is a huge advantage. They can choose between shopping in chain supermarkets, where prices are higher and there is no opportunity to bargain, and bazaars, where you can find the same products at lower prices and still bargain, following the national tradition. For example, you can buy tomatoes at the bazaar for 8 thousand soums, while in the supermarket they cost 24 thousand. Some goods, such as flour, sugar and vegetable oil, have similar prices, but otherwise the difference is noticeable.
Advantages for Distributors
For distributors, the presence of bazaars and small retail outlets is also a big plus. Fast cash flow plays a key role. For example, we provide retail products with a short shelf life, and expect payment within a month. In supermarkets, payment can be delayed for 5-6 months. With small retail outlets, everything is simpler: you deliver the goods, receive part of the payment, and the funds are quickly returned to circulation, which allows you to develop your business.
Distribution Market
Distribution in Uzbekistan is an area where there is a constant "struggle" both internally (development of networks, training of personnel to expand coverage) and externally (between companies). According to statistics, in 2023, there were more than 50 large distributors in the FMCG segment on the local market.
Competition has increased in recent years. There are a lot of new players on the market. And everyone is trying to be leaders, expand their product portfolios. Of course, Uzbekistan with a population of more than 37 million people is a huge market worth investing in and where it is worth building a business. Every entrepreneur sees numbers in a population of 37 million. The formula is simple - 1 person = 1 potential buyer. Now multiply this by 37,000,000 = 37,000,000 potential buyers!
We must also take into account the high demographic growth. In 2023, the population grew by 2.2% or 774.9 thousand people. This is the highest figure in the Central Asian countries!
We are currently working in the fish products segment. Compared to other industries, the competition here is not high. We also work in the dairy segment - this is a competitive market with local and foreign distributors!
From paperwork to automation
Modern business requires flexibility and quick adaptation. After 2010, process automation became a real breakthrough. Our cooperation with Green White Solutions began in 2011, when Smartup version 3 was on the market, and version 4 was in development. We worked the old-fashioned way - everything on paper, which led to confusion and inconsistencies.
We were looking for new ways to do business and were inspired by a video from Coca-Cola, where they talked about automating their processes with Smartup. Having contacted the developers, we began our cooperation with Green White Solutions, which has been going on for over 13 years.
Now automation helps us not only manage, but also develop the business, getting rid of routine tasks and increasing efficiency.
Time is money!
Durust employs over 100 sales representatives and over 20 freight forwarders, processing an incredible volume of documentation every day. Every day we register over 1,000 documents related to cash flows: cash, transfers and through terminals. The automation system is so efficient that one operator can handle this entire flow! There are two operators in the team: one works daily, and the other is on standby in case of an unforeseen situation.
We see every import-export document at a glance, which makes the work convenient and transparent. One of the key features of Smartup is a convenient mobile application available 24/7. With its help, even while in London, I can control the business in Tashkent and track the work of employees in Bukhara or Nukus.
Visit Steps Functionality. This function deserves special attention. In real time, it allows you to monitor the discipline of employees and optimize their work. Smartup helps save time by optimizing routes and the ability to see the nearest retail outlets.
Saving on Catalogs. With Smartup, our employees can independently create catalogs, add the necessary items, choose the color and font without the help of designers and developers. This saves us huge resources, both in time and money.
High Technologies and Mobile Solutions. Modern technologies play a key role in our business. Smartup allows you not only to control, but also to develop your business to a new level. Saving time and increasing work efficiency are the main advantages of using innovative solutions in our company.
Thanks to the implementation of process automation, in 2023, DURUST increased its turnover by 15% and reduced document processing time by 40%. The Smartup system processes about 800-900 documents related to cash flows daily.
New business opportunities
Working in distribution is hard work. Many people think that it is easy to run such a business - buy from a manufacturer or importer and sell to retail stores! But behind this is the colossal work of a huge team. We believe that field employees are the heart valves of the company. Smartup 4 made their work easier and more efficient - it provided our employees with routing functionality.
The second main advantage of the new version for us was the ability to process accounts receivable online. All information on accounts receivable was available and updated in real time.
What functions are used today
Currently, we use financial instruments, photo reports, merchandising, KPI, build sales and visits. We plan to launch Trade Marketing and shelf recognition. This is a powerful tool that is actively used by developed European countries.
Smartup is being improved and each new version provides more powerful and necessary tools for running a business. Smartup X is the latest development, it has a new level of security, updated modules. All this has a positive effect on running a business!
Smartup: Your business designer
Smartup is a real designer for business. Having customized it to your needs, you will get all the necessary information in the palm of your hand. Just 30 minutes at the end of the month - and all the reports are ready. At the end of each day, I instantly see sales data. It's just amazing!
With Smartup automation, I can run and control my business while enjoying a cup of coffee. The system is equipped with sensors that immediately show if something is wrong. Routine tasks, planning meetings and waiting for reports are a thing of the past. Everything has become simpler, faster and more accurate.
Automation has proven that time is money. Solving simple tasks manually is the last century. In the 21st century, speed, safety and accuracy are key requirements, and Smartup has it all!
Business transformation over the past 10 years
The difference between work ten years ago and today is like night and day! Pens and notepads are a thing of the past, waiting for reports and results for days is now history. Today, all work is done through smartphones with the Smartup system, which helps each employee improve KPI and evaluate their work.
I remember how on January 2, 2022, we switched to the 5th version of Smartup. Everyone was resting on holidays, and I was transferring data to the new version. It took three days, and at first I regretted it. But very soon I was grateful to myself for my efforts - the effect of the implementation of the new version justified all the efforts and holiday workdays!
Forecasts for the future
The future of distribution in Uzbekistan promises to be dynamic. According to experts, the share of chain supermarkets, which today makes up about 20% of the market, will grow rapidly, entering into competition with traditional small retail outlets. For example, in Russia, the share of chain supermarkets is 80%, and Uzbekistan can follow this trend.
Today, there are several large players on the Uzbek market, such as "Korzinka" and "Macro", and they are likely to maintain their positions. However, the number of new companies is expected to increase. For example, a new chain is planned to open this year - the Dutch Spar. This is a huge step forward!
If we talk about international distribution companies in general, there are not many of them yet. The reason is the specifics of the Uzbek market, where flexibility and consideration of local traditions are necessary for successful business. Uzbek business traditions dictate their own rules, and international companies need to be ready to adapt in order to compete in this unique market.
Distribution world Uzbekistan continues to develop and improve. Automation helps not only to simplify the work of business representatives, but also to make companies competitive in the international market. The 21st century has become a period of rapid development of globalization, when new rules change established requirements. Flexibility of processes will help to quickly adapt and be in demand!
