Kazakhstan - Direct Marketing Kazakhstan - Direct Marketing
Direct marketing is becoming more common in Kazakhstan, especially in larger cities such as Almaty and Nur-Sultan. Some popular forms of direct marketing are the distribution of free samples at points of sale and major cultural events and visits to households to promote consumer products. Marketing by mail is less popular, as mail is not considered a reliable delivery instrument, but the situation is improving, and it is gaining popularity with consumers in this market.
Personal computer penetration used to be limited to urban areas, but through the development of the state program Digital Kazakhstan more and more people and organizations are enjoying easier and high-quality Internet access. In 2017, the proportion of PC users reached 78.2% from the total population and the proportion of the Internet users reached 78.8%, and the government of Kazakhstan is planning to continue this increasing tendency of digitalization. Untapped demand is high and the potential for growth is significant, particularly because of the digital development of the country. China has become an increasingly important supplier of electronic goods in recent years.
Kazakhstan takes 16th place in Global Retail Development Index 2017, which is 12 positions lower than in 2016. This fall mainly comes from the previous two devaluations of the local currency, low oil prices, and Western sanctions against Russia, and, as a result, the tendency for saving that led to the fall in retail sales. However, the government is facing the challenges by stabilizing prices for important foods and enhancing GDP growth. It is believed that this drop in the retail sector was a result of the economic shocks and the economy is already picking itself up with the digital development of the country.
The development of e-commerce started in March 2012, with the launch of the Russian e-retailer LaModa, an online platform that allowed any brand to sell its goods, which soon after had become a recognized leader in the market segment. According to operational data, for the first half of 2018, the volume of e-commerce market amounted to around USD296 million. Since the beginning of 2018, 110 new subjects of e-commerce have been registered. The e-commerce market employs about 1.7 thousand online stores, with 1.5 million buyers. The market itself is steadily growing and expanding to the other Central Asian countries.
Direct sales and sales through catalogs are particularly popular in the cosmetics sector. The leading direct sales companies such as Avon, Mary Kay, Faberlic (Russia), and Oriflame, founded the Direct Sales Association (DSA) of Kazakhstan in October 2010 to jointly defend the term of network marketing and protect the rights of their consumers and sellers. At present, the association consists of nine companies such as Amway, Avon, Faberlic, Forever Living Products, Herbalife, LR Health & Beauty, Mary Kay, Oriflame and Tiens. According to the DSA, the turnover of direct sales companies in 2017 amounted to about USD293 million. The main product groups of the direct sales market include: health products (26%), skin care and decorative cosmetics (24%), perfumes (16%), clothing and accessories (10%), and household goods (6%). As of today, the direct sales approximately represent only 1% of the retail turnover, which is far below the world average level of 4.25%. The direct sales market in Kazakhstan is still in the development process and has great opportunities for growth. Recently, the direct sales companies have also launched their online shopping sites keeping up with the digital development of Kazakhstan.