Large jewelry chains are intensifying development in foreign markets of neighboring countries

Large jewelry chains are intensifying their development in foreign markets of neighboring countries. This year Adamas intends to open its own stores in Kazakhstan, Belarus, Uzbekistan, Kyrgyzstan and Azerbaijan, and Sokolov – new franchise points in Azerbaijan and Armenia. Experts warn of a lack of modern shopping centers and a gray jewelry market in Central Asian countries.

The large Russian jewelry chain Adamas plans to open its own stores in Kazakhstan, Belarus, Uzbekistan, Kyrgyzstan and Azerbaijan in 2024, the company told Kommersant. They clarified that by the end of the year at least 20 points will be opened in these countries. As follows from the company’s vacancies on the HeadHunter portal, Adamas is looking for a director and line staff to open a facility in Samarkand. In Uzbekistan, Adamas also plans to open a store in Tashkent, the chain added.

Adamas opened its first foreign store in the spring of 2023 in the KeruenCity shopping center in Astana. The company says that in the markets of other countries, they primarily consider premises with an area of ​​60–90 square meters. m in shopping centers with high targeted traffic. In the assortment of foreign stores, up to 20% will be products that meet local preferences, Adamas points out.

The Sokolov jewelry chain also has stores in other countries, but in neighboring countries the company operates on a franchising model. Sokolov CEO Nikolai Polyakov told Kommersant that the chain’s franchises operate in Kazakhstan, Kyrgyzstan, Uzbekistan, Belarus and Moldova, and new openings are expected in Azerbaijan and Armenia. In 2023, the Sokolov chain also opened three of its own stores in Shanghai. In the next five years, Sokolov plans to become a leader among foreign jewelry brands in the mass segment in China, which will require opening about 400 stores, says Mr. Polyakov. MIUZ Diamonds, according to the chain’s website, opened a franchise store in Mongolia last year. The network also has points in Belarus and Kazakhstan. MIUZ Diamonds, Sunlight and 585 Gold did not provide a comment.

General Director of the Association of Jewelers Vadim Serov says that foreign markets have not yet been developed by Russian jewelry retail. According to him, jewelry produced in the Russian Federation can compete well with products from other countries. But, the expert adds, difficulties may arise due to the need to take into account the regulatory requirements of each individual country. In addition, Mr. Serov says, it is necessary to correctly build the assortment in terms of proportions, jewelry design and other nuances that influence the preferences of local buyers.

The general director of Infoline-Analytics, Mikhail Burmistrov, among the Central Asian countries, considers Uzbekistan to be the most promising for the expansion of Russian retail chains as a state with a dynamically growing population, high GDP growth rates, a low level of competition among retailers and a high share of young consumers. Thus, it is this country that Magnit Cosmetic and Letual choose for development abroad, he points out. But, the expert adds, jewelry chains will have to face a limited number of modern shopping centers and a high share of the gray market in Central Asian countries. Investments in opening your own stores in other countries will also take longer to pay off than franchise development, Mr. Burmistrov points out.

In Russia, according to preliminary estimates by Infoline, jewelry sales in 2023 increased by 7–10% year-on-year, to 330–340 billion rubles, after a decline of 6.7% in 2022 due to consumer savings. As market participants noted, the dynamics of last year were mainly associated with an increase in average prices for jewelry (see “Kommersant” dated November 21, 2023).

Alina Savitskaya