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In the past several years, spending patterns in Kazakhstan have begun to resemble those of the Western world, creating a demand for name brands and quality products. Kazakhstani companies have accumulated financial resources that, combined with a lack of available investment instruments, are also stimulating interest in franchising. Kazakhstan can serve as a gateway to the growing economies of the Central Asian countries.

Although franchising is still a fairly new business concept in Kazakhstan, it is drawing increased interest from entrepreneurs. At the moment, there are more than 450 franchises operating in Kazakhstan, most of them located in Almaty, making Kazakhstan the franchising leader in Central Asia.

In 2013, the Kazakhstan market experienced a consumer boom, which resulted in retail sales steadily rising by 10%. Overall retail volume growth is nevertheless expected to remain high over the full forecast period, at an average of around 6.4% a year in real terms, as real incomes continue to rise.

The Kazakhstan Franchising Agency states the total number of all franchises and brands operating under franchising or other similar terms will grow to 500 by 2016, with approximately 3,000 franchising outlets which employ over 30,000 people and with an estimated annual turnover of $1.2 billion. Kazakhstan is characterized by a large number of franchisees working on the basis of sub-franchising agreements with master franchisees based in Russia, Turkey, or elsewhere. Only a few foreign franchisors work directly with Kazakhstani partners but their numbers are growing.

Current brands represented in the market include KFC, Pizza Hut, Burger King, Hardees, Gloria Jean’s, Coca-Cola, Baskin Robbins, Cinnabon, FasTracKids, GAP, New Yorker, Tiffany Marble, FitCurves, Marriot, Sheraton and Intercontinental as well as retail brands like Adidas, Armani, Burberry, Debenhams, Gap, Gucci, Lacoste, Mango, Marks & Spencer, Mexx, Mothercare, Next, Saks Fifth Avenue, United Colors of Benetton and Zara. Domestic supermarket chains include SM-Market, which has a total of 40 stores in Kazakhstan. Leading retailers by sales are Metro Cash & Carry (Germany), Migros Ticaret (Turkey), Eldorado (Russia), Inditex (Spain) and Mothercare (UK).

Foreign brands see Kazakhstan as a fertile market and A.T. Kearney’s Global Retail Development Index ranked Kazakhstan as the 11th most attractive market for retail development in 2013, up from 19th the previous year, ahead of Russia at 23rd place. Domestic franchising is just starting to develop with 30 local franchises and 200 franchising outlets. According to the Kazakhstan Franchise Union, five local franchises, mostly in retail, even expanded their own franchise concept outside of Kazakhstan – with brands such as Happylon, ShBS, Mimioriki, Biba, and Zibroo currently operating their franchise outlets abroad.

Sub-Sector Best Prospects

According to experts, franchising is quite attractive for businesses that are interested in sales of business support services (business consulting - audit and accounting services, advertising, HR related services, technical consulting), housing construction and repair services, education services (tutoring, foreign language courses), leisure and entertainment, fast food, medical and cosmetic services, retail sales, and other personal services (laundry, footwear and clothing repair, delivery services etc.)

Currently, the majority of local potential franchisees are seeking agreements with franchisers operating in the following sectors:

  • Fast-food and casual dining;
  • Retail sales (clothing, footwear, furniture, sporting goods, supermarkets, gasoline
  • stations);
  • Auto repair and maintenance services, gasoline stations;
  • Hotel chains for low and medium income travelers;
  • Printing and copying services, photo-shops, etc; and
  • Body/health care services (beauty salons, gyms, etc.)


The U.S. Commercial Service in Kazakhstan is working with a number of prospective franchisers that are either finalizing agreements with local partners or in the midst of constructing their first outlets in Kazakhstan. Fast food restaurants are of great demand for U.S. franchise models. U.S. market presence is also visible in business education and training services, business services, and children’s services/preschools. The majority of non-U.S. foreign franchises in Kazakhstan are from Russia and Western Europe, mainly the U.K., France, Germany, Spain, and Italy.

U.S. franchisors should focus marketing efforts on the growing middle class, estimated to be as high as 15-20% of the population and responsible for purchasing 50-70% of the financial value of all goods sold in Kazakhstan. Multibillion dollar investments made by oil companies in Kazakhstan are creating a retail market for locals employed in the energy and related services sectors, as well as for growing expatriate communities.

According to levels of income, the middle class can be roughly divided into two groups:

  • the lower middle class, employees with salaries of $12,000-24,000 per year per person (70% of the middle class) and
  • the upper middle class, with salaries of $24,000-60,000 per year per person (30%).

To understand the potential for franchising in Kazakhstan, it is important to consider the rapidly developing retail infrastructure of new shopping malls. The development of hypermarkets (i.e. megastores that include grocery stores), which is accompanying and spurring retail growth, is opening up new opportunities for franchisors. In the past ten years, about twenty new hypermarkets opened in Almaty and Astana. The process is echoed by other major cities on a smaller scale. According to investors involved in developing new trade centers, retail infrastructure development is far from being saturated and will continue to grow. Several new hypermarkets were opened in Almaty, including Metro Superstores. Ten larger malls are under construction or planned for development in Kazakhstan. Almaty, the largest city, and Astana, the capital, account for more than half of retail sales in the country, and with competition becoming fierce, some developers are targeting other regions.

Web Resources

For more information contact Commercial Specialist Aliya Shaikhina.

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