Turkey’s second largest grocery retailer, Migros Ticaret, indicated its intention to enter Pakistan. According to Migros Ticaret’s parent company, Anadolu Group, this is part of an international expansion strategy to build on their current presence in Pakistan with its soft drink bottling subsidiary Coca-Cola Icecek.
Migros is not new to international operations
International expansion is not a new strategy for the Turkish retailer. Migros Ticaret operated in Azerbaijan, Bulgaria, Kyrgyzstan, and Russia up until 2011 when its international footprint became limited to Macedonia and Kazakhstan. Although Migros Ticaret sourced less than 3% of its retail revenue from foreign operations in 2016, the retailer now looks to develop its international revenue streams.
Turkish retailers exploring international expansion
According to Anadolu Group’s CEO, Mehmet Hulsit Zorlu, Migros’s attraction to Pakistan is attributed to the country’s huge population of around 200 mn, recovered economic situation, and improved and security in recent years. Such a turnaround attracted the likes of Tesco to a partnership with Pakistan’s Alpha Supermarkets in early 2017 to sell their private label.
Alpha will offer Tesco Finest, Tesco Better and Tesco Everyday to appeal to one of the world’s largest middle-class populations. This helps the British retailer to drive private sales further while Alpha Supermarkets has competitive advantage through stocking credible ranges. Elsewhere, this year BIM’s executive board authorised research work to begin on Iran to consider market entry for the Turkish discounter.
Improved trading conditions make it ripe for suppliers
Migros Ticaret and BIM will likely boost sales for their own-brands abroad that presents a business opportunity for its Turkish suppliers. If Migros Ticaret and BIM commit to their strategy to expand into Pakistan and Iran the likely outcome is the boost in both their private label sales internationally. If Tesco’s own-brand range in Alpha supermarkets indicates any success of international private label amongst Pakistani consumers, then Migros Ticaret will have further motivation to enter Pakistan.
Amin Alkhatib, Retail Analyst CEE, IGD International: based in London, UK, Amin is responsible for shaping IGD's research in Central and Eastern Europe; as well as contributing to IGD's broader European research programme.
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