Iran retail market – overview

The Economist Intelligence Unit estimates the consumer goods market in Iran to be worth $95 billion (Dh348.7 billion), and forecasts it to grow to $166 billion by 2020. Foods and beverages is estimated to account for just under 50 per cent of the total value, a sector that is dominated by local brands.

However, unlike the UAE, the retail structure in Iran is dominated by traditional trade, which accounts for over 90 per cent of sales value. Also, with its much larger area (19 times the size of UAE) and high population dispersion, retailers could face challenges with regard to coverage and distribution.

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Iran retail – foreign chains expansion

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Local retailers are outraged. According to secretary of food wholesalers union Ali Karbasi, 30% of wholesalers in one market neighborhood in downtown Tehran have shut down and more businesses are likely to go to the wall with the opening of new foreign shops such as Turkey’s BIM.

“Hyper Star, Canbo and BIM have harmed many supermarket owners and food distributors and according to some officials, sales of local trade units in this field have dropped about 50%,” Amin Rostampour, a food distributor in Tehran province, told Jam News monitoring website.

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Abu Issa Holding – retail Iran

Qatar’s Abu Issa Holding to enter Iran retail market in 2017

Abu Issa Holding, one of the largest retail and luxury goods firms in the Middle East, plans to expand into Iran next year and open stores in Tehran selling watches and confectionery as the market opens up after sanctions.

The family-run Qatari firm is an example of a Gulf Arab business that could benefit from the lifting last January of nuclear-related sanctions that largely closed Iran off for years.

“It’s an obvious expansion for our business,” 48-year-old Ashraf Abu Issa, chairman and chief executive of Abu Issa Holding, said at the Reuters Middle East Investment Summit.

His company helped to introduce luxury watches and skincare products to Qatar in the 1990s. It now employs 4,000 staff and supplies over 250 brands in fashion, perfume, cosmetics, leather goods and electronics around the region.

“We will start with five or six stores in Tehran. We plan to open a similar number every year for the next five years and also in the city of Isfahan, which we expect to become a touristic hub in coming years.”

Abu Issa is using a model that other businesses in the Gulf may follow: he plans to serve as a go-between linking Middle East-based manufacturers and distributors of luxury items, often Western brands, to Iranian partners. He has spent two years establishing contact and negotiating business terms with the Iranians.

from

http://english.alarabiya.net/en/business/retail/2016/10/31/Qatar-s-Abu-Issa-Holding-to-enter-Iran-retail-market-in-2017.html

Trump rhetoric rattles Iranian business

Post-nuclear deal progress in doubt as US bellicosity triggers surge of uncertainty
FULL ARTICLE https://www.ft.com/content/09d4abbe-eebd-11e6-ba01-119a44939bb6

As soon as Iran’s nuclear deal with world powers took effect, Majid Zamani and his partners set up an investment boutique with the aim of tapping into the flood of foreign business they hoped would flow into the Islamic republic. Sample the FT’s top stories for a week You select the topic, we deliver the news. Select topic Enter email addressInvalid email Sign up By signing up you confirm that you have read and agree to the terms and conditions, cookie policy and privacy policy. Progress was initially sluggish as overseas investors took a cautious approach to Iran, yet Mr Zamani, a US-educated former World Bank consultant, remained confident about Kian Capital Management’s prospects. But the election of Donald Trump and his bellicose rhetoric towards Iran has triggered a surge of uncertainty and forced him and other Iranian businessmen to recalibrate their plans. They no longer expect the foreign investment to flow easily and instead are refocusing on their domestic market.

Business leaders also take solace from the fact that Iran’s $16.6bn deal for Boeing jets remains on track. Five days before Mr Trump’s inauguration, Iran was celebrating the arrival of Iran Air’s first new aircraft — an Airbus jet — in 23 years, a symbolic moment in a country desperately in need of investment.

There are no signs that French companies such as Airbus and Peugeot are under pressure to reconsider deals they reached with Iran in the wake of the nuclear agreement. However, it emerged last night that the oil company Total made its decision to invest in Iran conditional on the Trump administration’s renewal of US sanctions waivers by the summer.

Steven Daines, chief executive of new businesses at Accor Hotels, says the French group is not altering its plans to operate hotels in Iran. But on a visit to Tehran this week, he acknowledged that “we are finding it more difficult than anticipated because of concerns of instability both domestically and internationally [about investing in Iran]”.

Retailing in Iran – EUROMONITOR, country report janvier 2017

http://www.euromonitor.com/retailing-in-iran/report

38 pages, Jan 2017

£1,375

EXECUTIVE SUMMARY

 

 

Trump administration ‘officially putting Iran on notice’, says Michael Flynn

The Trump administration has said it was “officially putting Iran on notice” in reaction to an Iranian missile test and an attack on a Saudi warship by Iranian-backed Houthi rebels in Yemen but gave no details about how Washington intended to respond.

Flynn did not specify how the new administration would respond. Asked for clarification, the White House spokesman, Sean Spicer, said the president wanted to make sure the Iranians “understood we are not going to sit by and not act on their actions”.

FULL ARTICLE

https://www.theguardian.com/world/2017/feb/01/iran-trump-michael-flynn-on-notice

Supertankers from Iran’s state-owned oil fleet are sailing to Europe for the first time since sanctions were eased last year, as one of the world’s biggest crude shippers moves to step up deliveries.

iran-oil

FULL ARTICLE
https://www.ft.com/content/b8cdfb48-e3dc-11e6-9645-c9357a75844a

Before 2012, when co-ordinated western sanctions on Iran’s oil exports came into force, NITC was one of the world’s largest tanker operators with about 65 vessels. The two tankers are currently off Africa having rounded the Cape of Good Hope last week, according to satellite tanker tracking. The ‘Huge’ vessel is south west of Liberia while ‘Snow’ is off Angola. Both are expected to reach Rotterdam early next month. Nasrollah Sardashti, commercial director for NITC, said last spring that his tankers could be sailing to Europe by June, but has had to wait an additional six months for shipments to restart. “We are back in full force now to gain our markets share in tanker shipping,” Mr Sardashti told oil price agency Platts this week, which first reported the vessels’ journey.