The fast-emerging hottest place to be is Kazakhstan

Most people in the UK would be hard-pressed to find anything to say about Kazakhstan beyond its association with Sacha Baron Cohen’s Borat character.

However, from a retail perspective, Kazakhstan is becoming a hot emerging market. Indeed, in recent months the market has attracted a growing amount of attention from leading global players.

Germany’s Metro Group was one of the first to enter, throwing open the doors of its first cash and carry in late 2009 in Astana.

Metro sees a potential for 10 to 15 cash and carry stores in Kazakhstan. The company has expanded fast and now has five stores in the country. Turkey’s Migros Ticaret is a major player through its Ramstore network of superstores and supermarkets.

Global non-food players are also taking a firm interest, particularly through franchisees. The Gap operates a small number of franchised stores, while late 2010 saw Inditex (operator of the Zara chain) open its first stores in Almaty. In the future, Inditex thinks there is potential for more than 30 stores in the market across a number of its banners.

Even luxury US department store retailer Saks is planning to open a franchised Saks Fifth Avenue store in Almaty in 2012 to tap into the growing number of affluent Kazakhstanis looking to Western luxury brands. Indeed, with a fast-growing upper and middle class to exploit, a whole host of luxury brands are now looking to open up in the market.

Traditionally, the market has been ignored by international retailers. Its fragmented nature, combined with its scattered population, weak infrastructure and the relatively low purchasing power of its population, all discourage investment.

Now though, Kazakhstan’s growing economy, combined with an underdeveloped modern retail sector are obviously attractive, as is the fact that the size of the country’s retail sector has doubled over the past five years.

The impact of the global economic crisis led to a slowing in the rate of growth from 2008 until 2010, although it has picked up as conditions have improved and confidence has returned.

A number of local players,such as SM Market have also started to emerge, many being able to expand thanks to the availability of cheap credit (at least until 2008).

Longer term, Kazakhstan could be an important growth market for a whole host of retailers – particularly as opportunities in other emerging markets gradually dry up.

• Robert Gregory, global research director, Planet Retail. For more information contact us on:

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