Kazakh exporters are taught to work with Russian retail

On May 31, 2021, the Trade Representative Office of the Republic of Kazakhstan in the Russian Federation together with JSC "Center for Trade Policy Development "QazTrade" with the support of the Ministry of Trade and Integration of the Republic of Kazakhstan held an online conference on the topic "Familiarization with the peculiarities of Russian retail using the example of "X5 Retail Group". The conference was attended by representatives of the National Chamber of Entrepreneurs "Atameken", industry Associations of Kazakhstan and the business community. More than 100 people in total

Opening the event, Vice-Minister of Trade and Integration Kairat Torebayev said that the trade industry has begun to actively recover from last year's downturn.

"In the first quarter of 2021, we see a positive trend in the recovery of trade, which increased by 14% compared to the 1st quarter of 2020 and amounted to $4.8 billion. At the same time, Kazakhstan's exports to Russia increased by 19.3% and amounted to $1.4 billion," the Vice Minister said.

He also said that Kazakhstan is carrying out large-scale work to promote exports to foreign markets. In particular, on the introduction of enterprises to large foreign retail chains, including the Russian direction.
"We are witnessing large-scale qualitative and structural changes in the retail sector, due to the steady growth of network forms of retail organization-retail chains. Network retail is actively developing and replacing traditional retail structures, which usually include independent retail operators and open markets, " Kairat Torebayev said.

He also clarified that " the peculiarity of the modern period is the gradual overcoming of the unsystematic nature of the formation of network retail, the strengthening of its influence on the consumer market, the reduction of the lag behind world trade standards and the provision of trade infrastructure facilities while maintaining the national specifics of domestic retail chains, the activation of network processes in the trade business space."

The Trade Representative of the Republic of Kazakhstan in the Russian Federation, Nurlan Borambayev, spoke about the work of the Trade Mission of the Republic of Kazakhstan on the withdrawal of Kazakhstani goods to the X5 Retail Group network, which is interested in the supply of fruits and vegetables, textiles and clothing, food, including children's food, groceries and beverages from Kazakhstan.
"Today's conference is one of many steps on the way to the goal-to start joint trade of Kazakhstani goods on the territory of Russia," Nurlan Borambayev said.

Maria Exler, Director of the International Department, Department for the Development of Relations with Public Authorities of X5 Retail Group, and Denis Sinitsyn, Head of the Sourcing Department of X5 Retail Group, spoke about the conditions of access to the Russian retail market and the working conditions of the X5 Retail Group retail network with direct suppliers.

Currently, the company is developing cooperation with suppliers from the Republic of Kazakhstan.

Recently, representatives of the company visited Kazakhstan, where they got acquainted with the work of 10 enterprises.

"Thank you very much to the Trade Mission of Kazakhstan, which organized this trip, "said Denis Sinitsyn, Head of the Sourcing Department of X5 Retail Group. He also said that X5 Retail Group is currently "in constant contact" with these companies.

Mr. Sinitsin also said that X5 Retail Group "has a single entry window for any supplier-the management of supplier search. At the same time, the priority for Kazakhstan is obvious. This is due to the length of the border, the common production standards, and the peculiarities of consumption."

However, the company noted the existing shortage of suppliers from Kazakhstan.

"There are several reasons for this situation. Local suppliers are not sufficiently informed about the international quality standards that apply in the Russian Federation. This applies not only to fruits and vegetables, but also to textiles, groceries and other goods. The second reason is the company's policy of moving away from the shadow market. Large companies such as X5 Retail Group are non-cash payers. All goods that are purchased directly from manufacturers are paid only by bank transfer, " Denis Sinitsyn said.

Representatives of the Russian retailer noted that in working with retail chains, the manufacturer can build a long-term program of cooperation, fix the projected volumes of demand. And also, very importantly, move away from local deliveries.

Some Kazakh exporters are already working with large buyers from Russia. In particular, with federal retail chains.

Berik Moldagali, Director for Export Sales and Business Development of Kazakhstan's MCC Trade Company LLP, spoke about his experience working with the Russian retail market.

Kazakh entrepreneurs were able to ask representatives of X5 Retail Group all their questions. The parties exchanged contacts and agreed to continue negotiations on cooperation.

For reference:

X5 Retail Group is the leading food retail company in Russia. Manages a portfolio of brands of chain stores "Pyaterochka", "Perekrestok", "Karusel", "Chizhik", digital businesses "Perekrestok For Future Use", "About", 5Post, as well as its own logistics services, direct import and a number of digital services for partners. The company owns 43 wholesale and logistics centers.
X5 Retail Group shares in the form of global depositary receipts are traded on the London Stock Exchange, as well as on the Moscow Stock Exchange under the ticker "FIVE".