IN THE LAND OF MILK AND HONEY

BY GARY BURROWS

Belarus is a country of understatement and natural reserve, which is reflected in the quiet, confident, and yet unassuming collective personality of its people. Some of the amazing things that occur in Belarus are rarely covered by the international press rarely  attract the attention of the “global village.” There are two reasons for this, firstly the mentality of the people and secondly the lack of positive PR in the international press. I am unsure if there is a general unwillingness to publish positive news articles about Belarus, or if the lack of information coming out of Belarus has created a vacuum that is easier to fill with negativity.

As a British national who has lived and worked in Minsk, the capital of Belarus, for the past year, I have seen so many positive things that I feel it’s important to highlight some of the more relevant issues. It is easy to start by explaining my title to this article, as Belarus has a long agricultural history and exports 3 times as much milk per capita as the EU. This is complemented by a strong, emerging honey industry that has taken up the slack where Ukrainian exports have dropped off. Belarus is a country of only 9 million people, with excellent natural resources and a growing export market that works off its strengths: building agricultural and heavy plant machinery. It is also one of the world’s largest producers of potash and has forests that not only provide for a huge timber industry, but also act ecologically as the lungs of Europe.

EMERGING SECTORS LIKE IT

It is not only the blue collar sectors that provide employment for Belorussians: The highly educated and entrepreneurial population has produced major international players in the IT sector and many recognized brand names are directly linked with, or outsource work to Belarus. The gaming industry is one such area of expertise, along with the VOIP system Viber. These emerging sectors are providing well paid employment, predominantly for the under 40’s, who all speak English and/or another foreign language. This all translates to a 98.5% employment rate and an average income per capita higher than in many EU countries. The “on the ground” effect is an increasing number of quality restaurants, more expenditure on leisure and entertainment, an emerging café culture, and an increase in nightclubs. In the year that I have been in Minsk, the quality of cars seems to have risen and I have seen more Bentleys in the past three months than I saw in the previous nine.

How does all this relate to shopping centers and the emergence of expectations of experitential shopping centers for the residents of Minsk? It is clear that the people of Minsk used to go to Vilnius, Warsaw, and Moscow to buy brands that they could not get in Minsk. This trend is beginning to change, however, as more and more international brands seek space in the six new shopping centers under construction in Minsk. The next step in completely eradicating outbound retail tourism is to reduce the punitive import duties on Western goods, which currently restrict the high levels of retail trade that could be achieved.

TURKISH RETAILERS LIKE LC WAIKIKI IN THE LEAD

It is fair to say that Minsk is a beautiful city and one of the cleanest, safest cities that I have ever lived in – and I have lived in 16 cities around the world. The ring road functions excellently and the city has an efficient, cheap metro system that extends to the edge of the city and serves all major residential areas. It therefore seems logical to follow internationally successful shopping center locations and position a scheme on a metro route to avoid bad winter weather. It then necessarily follows that the layout, design, and format of the latest thinking in shopping centers should also be embraced if we are to provide the true experiential shopping center process for the people of Minsk and beyond.

While retailers continue to enter the market in Minsk, they are careful about the nature, location, design, and unit sizes, encompassing the overall quality of the environment as a deciding factor. It is unfortunate that there will be winners and losers in this process, as some schemes continue to make rookie mistakes and fail to incorporate international experience to guide them.

As the third-largest city in the CIS region behind Moscow and St Petersburg, Minsk has a population of two million people, who are demanding in-creasing quality at every touch point. Leading the charge into Belarus are Turkish brands such as DeFacto, LC Waikiki, Colins, and, most recently, Koton. They are being followed by well-known Polish brands, which seems logical as a Belorussian neighbor. Many other well-known international brands are already here through franchise partners, such as Mango, Next, Mothercare, Intersport, Desigual, Nike, Adidas, and Apple. Complementing all of these are the Russian brands Tboe, Uyutera, and Ostin. I am aware that several other internationally renowned brands are looking over the fence at the Belorussian market as one of the strongest emerging economies in the medium term.

TOURISM – AN AMAZING OPPORTUNITY

Other international capital cities rely on a proportional income from tourism for hotels, leisure, retail, and entertainment. This is yet another amazing opportunity for Minsk, which currently only has 100,000 tourist visitors from outside the CIS region. This compares to 4.3 million in Budapest (population 1.7 million), 1.4 million in Belgrade (population 1.3 million), and 14 million in Warsaw (population 1.9 million), equal to €8 billion in spend. Not many people are aware that Minsk held the world ice-hockey championships in April this year, yet another amazing event that went below the radar. My theory holds water, however, when considering that the sports fans visiting the championship caused a 20% uplift in retail spending, across all sectors during the championships.

Tourism would be a quick win for Belarus and only requires the softening of visa requirements to start attracting a significant amount of tourism spend and to fill the ten new hotels that have recently been built. Tourism would support not only the retail economy, hotels, bars, restaurants, and other service sectors, but it would also invigorate the overall economy. The line in the sand has to be the 2018 football world cup in Russia, as several warm-up games are planned for Minsk.

MORE BELORUSSIAN COMPANIES AT MAPIC

It is interesting to note that, for several few years, Dana Holdings was the only Belorussian company represented at MAPIC. This year there were four, including the Palazzo mall, the Galleria mall, the MoMo mall, and the biggest of all: Dana Mall. I think this says a lot about the emergence of Belarus as a retail property market, which will see the first North Eastern European retail, property, and investment event held in Minsk on March 26 and 27, 2015.

In conclusion, Minsk is an amazing opportunity that is missing some fundamentals and clearly needs more internationals to import the intellectual property, know-how, and latest thinking. When they eventually do join up the dots, however, Minsk will be an international powerhouse that will be on everyone’s radar.