COUNTRY FEATURE FOCUS
Why the UAE is key to unlocking Uzbekistan’s Retail Potential Uzbekistan (part of the former Soviet Republic), is known for its mosques, mausoleums and other sites linked to the Silk Road, the ancient trade route between China and the Mediterranean. Retail People Magazine spoke with Omar Khan, Director of International Offices at Dubai Chamber of Commerce and Industry who addressed the growing links between Uzbekistan and UAE and new growth opportunities for business.
Dubai Chamber Chairman H.E. Majid Saif Al Ghurair (first row, second right) attends the opening ceremony of the flydubai office in Tashkent.
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s the largest consumer market in Central Asia, Uzbekistan is a country ripe with business opportunities. Government-led reforms have brought positive changes to the nation’s business landscape with the retail sector already seeing growing activity from foreign investors and multinational companies. Population growth, rising incomes, stronger spending power, increased e-commerce adoption and growing appetite for established brands among consumers are among the key factors reshaping Uzbekistan’s retail space and opening the door to new growth opportunities for the global industry players.
Exploring New Frontiers The UAE’s Majid Al Futtaim (MAF) recently announced its plans to open several Carrefour stores in Uzbekistan. The company’s entry to Uzbekistan is significant for a number of reasons. The strategic
move reflects growing confidence in the country and paves the way for other retailers from the UAE and wider Middle East and North Africa region to enter the market and leverage Tashkent as a regional base to expand their reach into Central Asia. One of the key strengths of businesses in the UAE is their shared appetite to look outwards and explore growth opportunities in new markets. Several UAE retail heavyweights that expanded their presence across the Middle East, Africa and Eurasia in recent years have seen great success. Despite heightened interest in the Uzbek market, there are still market gaps that need to be filled before the country can meet consumer demands and ensure long-term economic growth. Scaling up retail and tourism infrastructure, building modern shopping centers and hotels and attracting a wider range of regional and international brands are a few areas where UAE companies can offer valuable expertise and investment.
Expanding Trade Links All of these developments come at a time when UAE-Uzbek relations are going from strength to strength. The UAE remains one of the top foreign investors in Uzbekistan, while Dubai has become a preferred destination for Uzbek companies to re-export their products to markets across the Middle East and Africa. Following the signing of a strategic agreement in 2018 to establish up a $1 billion investment fund to promote economic cooperation and boost bilateral trade, the two countries are making good on their promise to expand economic cooperation in key areas such as civil aviation, tourism, manufacturing, financial sector and halal industries. High-level visits, the launch of direct flights between Dubai and Tashkent and the easing of visa restrictions are important recent developments that are expected to boost business exchange. Dubai’s non-oil trade with Uzbekistan, valued at $231 million in 2018, is currently dominated by re-exports of machinery and electrical and electronic equipment to Uzbekistan.
As Uzbekistan opens its economy to the world, it can certainly look to the UAE as a strategic partner, and a country that has successfully expanded its trade links with emerging markets, diversified its industries and strengthened its value proposition to foreign investors and businesses.
24. RETAIL PEOPLE . JAN-MAR 2020
