The household chemicals market in Uzbekistan is showing steady growth, reflecting changes in consumer preferences and the development of local production. This is due to the conditions of urbanization, where an increase in the population's income and growing awareness of hygiene increases the demand for detergents, cleaning products, etc.
A key role in shaping the market is played by both international brands such as Unilever, Procter & Gamble, Henkel, and local manufacturers, including Artel and Sino Chemical, which are actively developing lines of household chemicals adapted to the needs of the Uzbek consumer.
What factors contribute to the development of this segment? How are players adapting to the peculiarities of the Uzbek market? And what opportunities are opening up for new companies? Vladimir Evsyutin, Commercial Director of the distribution company SV-Сluster, reveals in an interview the key trends, challenges and prospects shaping the future of household chemicals in the country.
About the company
SV-Cluster is a young but rapidly developing distribution company operating in the market of Uzbekistan since 2021. Despite the relatively short period, we have already established ourselves as a reliable partner.
Our portfolio includes 4-5 brands, including leading manufacturers from Turkey. These are ABC Deterjan household chemicals, Papia paper products from the Hayat Kimya plant, as well as hygiene products: Molfix baby diapers and Evony adult diapers.
We cooperate with several large factories and already occupy leading positions in a number of areas. Such success has become possible due to our professionalism, high-quality products and a clear understanding of market needs.
A key role in shaping the market is played by both international brands such as Unilever, Procter & Gamble, Henkel, and local manufacturers, including Artel and Sino Chemical, which are actively developing lines of household chemicals adapted to the needs of the Uzbek consumer.
What factors contribute to the development of this segment? How are players adapting to the peculiarities of the Uzbek market? And what opportunities are opening up for new companies? Vladimir Evsyutin, Commercial Director of the distribution company SV-Сluster, reveals in an interview the key trends, challenges and prospects shaping the future of household chemicals in the country.
About the company
SV-Cluster is a young but rapidly developing distribution company operating in the market of Uzbekistan since 2021. Despite the relatively short period, we have already established ourselves as a reliable partner.
Our portfolio includes 4-5 brands, including leading manufacturers from Turkey. These are ABC Deterjan household chemicals, Papia paper products from the Hayat Kimya plant, as well as hygiene products: Molfix baby diapers and Evony adult diapers.
We cooperate with several large factories and already occupy leading positions in a number of areas. Such success has become possible due to our professionalism, high-quality products and a clear understanding of market needs.
Wholesale trade in Uzbekistan
A feature of the Uzbekistan market, in comparison with other CIS countries, is the significant predominance of the Traditional Trade channel (traditional retail) over Modern Trade (modern retail chains). While in Kazakhstan Modern Trade occupies about 40-50% of the market, in Uzbekistan its share is only 10-20%, even for large companies.
This creates completely different working conditions for distribution. For example, a foreign company entering the Kazakhstan market can cover up to 40-50% of the market, cooperating with only 20 large partners. In Uzbekistan, the situation is different: here, in order to successfully cover the market, it is necessary to interact with thousands of small clients.
This feature forces large international manufacturers to enter into contracts with distribution companies that take on the management of a complex network of retail outlets. This is why the services of distributors in Uzbekistan remain in high demand, and their role in the development of the market is becoming key.
Situation in the region
Over the past 6-7 years, the Uzbek market has demonstrated a significant leap in development. However, such a short period was not enough to form a large network of companies and retailers similar to those that exist in the CIS countries. For example, networks such as Magnit Cosmetic and Magnum have just begun to develop the market and are still at the initial stage of development. For comparison, in Russia, similar structures were formed over 20 years.
To date, the share of Modern Trade (modern retail chains) in Uzbekistan is only 10-20%, while in Kazakhstan this figure reaches 40-50%. Such a market structure forces foreign manufacturers to choose cooperation with local distribution companies that are able to work with tens of thousands of small retail outlets. This explains the high demand for distributors in the country, especially in the context of the growth of local production.
Personnel shortage
One of the key challenges for business remains the personnel shortage. The situation worsened during the pandemic, when workers from the regions returned home en masse. At the same time, local production, private clinics, and service centers began to develop in the regions, which reduced the need to travel to the capital. According to the data, the difference in salaries between Tashkent and the regions is minimal today - often only about $100, which is spent entirely on rent.
An additional factor was the development of the delivery ecosystem, for example, the Uzum platform. Many young people who previously worked as sales representatives began to move to call centers and logistics. As a result, this sector pulled out a significant portion of personnel, which affected salaries in sales and distribution.
A feature of the Uzbekistan market, in comparison with other CIS countries, is the significant predominance of the Traditional Trade channel (traditional retail) over Modern Trade (modern retail chains). While in Kazakhstan Modern Trade occupies about 40-50% of the market, in Uzbekistan its share is only 10-20%, even for large companies.
This creates completely different working conditions for distribution. For example, a foreign company entering the Kazakhstan market can cover up to 40-50% of the market, cooperating with only 20 large partners. In Uzbekistan, the situation is different: here, in order to successfully cover the market, it is necessary to interact with thousands of small clients.
This feature forces large international manufacturers to enter into contracts with distribution companies that take on the management of a complex network of retail outlets. This is why the services of distributors in Uzbekistan remain in high demand, and their role in the development of the market is becoming key.
Situation in the region
Over the past 6-7 years, the Uzbek market has demonstrated a significant leap in development. However, such a short period was not enough to form a large network of companies and retailers similar to those that exist in the CIS countries. For example, networks such as Magnit Cosmetic and Magnum have just begun to develop the market and are still at the initial stage of development. For comparison, in Russia, similar structures were formed over 20 years.
To date, the share of Modern Trade (modern retail chains) in Uzbekistan is only 10-20%, while in Kazakhstan this figure reaches 40-50%. Such a market structure forces foreign manufacturers to choose cooperation with local distribution companies that are able to work with tens of thousands of small retail outlets. This explains the high demand for distributors in the country, especially in the context of the growth of local production.
Personnel shortage
One of the key challenges for business remains the personnel shortage. The situation worsened during the pandemic, when workers from the regions returned home en masse. At the same time, local production, private clinics, and service centers began to develop in the regions, which reduced the need to travel to the capital. According to the data, the difference in salaries between Tashkent and the regions is minimal today - often only about $100, which is spent entirely on rent.
An additional factor was the development of the delivery ecosystem, for example, the Uzum platform. Many young people who previously worked as sales representatives began to move to call centers and logistics. As a result, this sector pulled out a significant portion of personnel, which affected salaries in sales and distribution.
Changes in the business environment
In recent years, the conditions for doing business in Uzbekistan have become more comfortable. For example, the simplification of customs procedures allows for faster customs clearance of goods. Our company, having received the status of Economic Operator of the 2nd degree in 2023, reduced the delivery and sale time of goods from the border to store shelves to two days. This is critical for the FMCG category, especially products with a short shelf life.
However, not all changes are positive. If during the fourth quarter of 2022, prices for household detergents and cleaning products increased monthly by 1.1-2.5%, then at the beginning of 2023, the price increase was only 0.7%. A sharp jump occurred in January 2024, customs exemptions for household chemicals were canceled, which led to an increase in the cost of products by 40%. If previously the price of washing powder was about 60,000 soums, now it has reached 95-100 thousand soums. This has caused a sharp decline in consumer purchasing power.
Understanding that changes in tax and customs policies are aimed at developing import substitution, businesses are faced with the need to adapt. However, the results are not yet obvious. Perhaps the lifting of restrictions or other changes should be implemented in stages so that both businesses and consumers can adapt to them! Production facilities in areas such as Chirchik are still under construction.
I predict that in the next 5-10 years, the market structure will change significantly in favor of Modern Trade. This requires not only the development of chain retailers, but also a smoother transition in economic reforms so that businesses can adapt and maintain financial stability.
In recent years, the conditions for doing business in Uzbekistan have become more comfortable. For example, the simplification of customs procedures allows for faster customs clearance of goods. Our company, having received the status of Economic Operator of the 2nd degree in 2023, reduced the delivery and sale time of goods from the border to store shelves to two days. This is critical for the FMCG category, especially products with a short shelf life.
However, not all changes are positive. If during the fourth quarter of 2022, prices for household detergents and cleaning products increased monthly by 1.1-2.5%, then at the beginning of 2023, the price increase was only 0.7%. A sharp jump occurred in January 2024, customs exemptions for household chemicals were canceled, which led to an increase in the cost of products by 40%. If previously the price of washing powder was about 60,000 soums, now it has reached 95-100 thousand soums. This has caused a sharp decline in consumer purchasing power.
Understanding that changes in tax and customs policies are aimed at developing import substitution, businesses are faced with the need to adapt. However, the results are not yet obvious. Perhaps the lifting of restrictions or other changes should be implemented in stages so that both businesses and consumers can adapt to them! Production facilities in areas such as Chirchik are still under construction.
I predict that in the next 5-10 years, the market structure will change significantly in favor of Modern Trade. This requires not only the development of chain retailers, but also a smoother transition in economic reforms so that businesses can adapt and maintain financial stability.
Adaptation to new rules and business expansion
Our company, specializing in the distribution of household chemicals, has held a strong position in the market for many years. In November 2024, we achieved one of the key goals of the current year, expanding our portfolio and entering the FOOD segment. In particular, we focused on snack products.
This step was a logical continuation of our strategic development for our company, since we see significant potential in this segment. The snack category is characterized by dynamic growth and stable demand. Modern consumers are increasingly choosing convenient and tasty snacks for both home and office or travel.
Our immediate plans include expanding the range of snacks and entering new categories of food products. Our goal is to offer customers an even more extensive and diverse product catalog, as well as strengthen the company's position in the market.
This step symbolizes our desire not only to meet the current needs of customers, but also to be ahead of their expectations, creating new opportunities for growth and innovation.
Business transformation: from notebooks to smart systems
The issue of process automation is a subtle and multifaceted aspect that should be considered from several angles. First of all, automation provides two key advantages: wide possibilities for system integration and increased speed of task execution.
Previously, in order to obtain the necessary data, you had to spend hours creating reports in Excel — huge tables that were difficult to read and analyze. Today, thanks to properly configured dashboards, all the necessary information can be obtained in just a few clicks.
Comparing two periods of work — "before automation" and "in the era of automation", we can safely talk about significant differences. It's like night and day. Previously, we used notebooks and calculators, and calculations took hours. For example, to generate a report or obtain analytical data, we had to manually collect and process a lot of information. Today, the situation has changed dramatically.
I remember the time when photo reports had to be downloaded manually and transferred to the supervisor. We literally ran around looking for the Internet to upload a single photo! Now all this is done online and in a few seconds.
Our company, specializing in the distribution of household chemicals, has held a strong position in the market for many years. In November 2024, we achieved one of the key goals of the current year, expanding our portfolio and entering the FOOD segment. In particular, we focused on snack products.
This step was a logical continuation of our strategic development for our company, since we see significant potential in this segment. The snack category is characterized by dynamic growth and stable demand. Modern consumers are increasingly choosing convenient and tasty snacks for both home and office or travel.
Our immediate plans include expanding the range of snacks and entering new categories of food products. Our goal is to offer customers an even more extensive and diverse product catalog, as well as strengthen the company's position in the market.
This step symbolizes our desire not only to meet the current needs of customers, but also to be ahead of their expectations, creating new opportunities for growth and innovation.
Business transformation: from notebooks to smart systems
The issue of process automation is a subtle and multifaceted aspect that should be considered from several angles. First of all, automation provides two key advantages: wide possibilities for system integration and increased speed of task execution.
Previously, in order to obtain the necessary data, you had to spend hours creating reports in Excel — huge tables that were difficult to read and analyze. Today, thanks to properly configured dashboards, all the necessary information can be obtained in just a few clicks.
Comparing two periods of work — "before automation" and "in the era of automation", we can safely talk about significant differences. It's like night and day. Previously, we used notebooks and calculators, and calculations took hours. For example, to generate a report or obtain analytical data, we had to manually collect and process a lot of information. Today, the situation has changed dramatically.
I remember the time when photo reports had to be downloaded manually and transferred to the supervisor. We literally ran around looking for the Internet to upload a single photo! Now all this is done online and in a few seconds.
Sharing Experience and Taking a Global View
One of the key opportunities is the implementation and development of CRM systems (Customer Relationship Management), which allows you to optimize work with clients, strengthen analytical tools and improve control over sales. Moreover, attracting expats who already have experience in creating remote sales departments will also help speed up these processes.
Uzbekistan is already becoming an attractive platform for the development of such technologies. Large companies such as Ozon place their call centers here. I recently visited one of these call centers and was amazed by their unique corporate culture. Employees work standing or move around the office, which stimulates their activity. This is a completely different approach that inspires.
In the future, I am sure that Uzbek specialists will be able to manage such call centers on their own, which will radically change distribution in the country.
Expats who came to Uzbekistan have already played an important role in changing the market. They shared their experience, trained local specialists and expanded their understanding of how to do business. This exchange of knowledge opens up new horizons.
It is important for us not just to follow the changes, but to be one step ahead. We must carefully look at successful examples from neighboring countries and the global market, adapt them to our realities and implement them in our work.
About competition
The trend of large manufacturers opening their own distribution companies is a pattern that reflects the evolution of the market. This is especially noticeable at the local level of Uzbekistan. On the one hand, this creates competition for independent distributors, but on the other hand, it opens up new opportunities for cooperation and development.
Large companies entering the market often prefer to organize their own distribution structures. This allows them to control every stage of promoting their brands. However, it is important for independent distributors not to perceive this as a threat, but to see new prospects in it.
For example, if a manufacturer plans to develop its brand in Uzbekistan, it will inevitably need operational resources: warehouses, transport, office space, customs warehouses. Instead of resisting these changes, you can offer your resources for rent or in joint cooperation. This will allow you to make a profit, even when interacting with large companies.
One of the key opportunities is the implementation and development of CRM systems (Customer Relationship Management), which allows you to optimize work with clients, strengthen analytical tools and improve control over sales. Moreover, attracting expats who already have experience in creating remote sales departments will also help speed up these processes.
Uzbekistan is already becoming an attractive platform for the development of such technologies. Large companies such as Ozon place their call centers here. I recently visited one of these call centers and was amazed by their unique corporate culture. Employees work standing or move around the office, which stimulates their activity. This is a completely different approach that inspires.
In the future, I am sure that Uzbek specialists will be able to manage such call centers on their own, which will radically change distribution in the country.
Expats who came to Uzbekistan have already played an important role in changing the market. They shared their experience, trained local specialists and expanded their understanding of how to do business. This exchange of knowledge opens up new horizons.
It is important for us not just to follow the changes, but to be one step ahead. We must carefully look at successful examples from neighboring countries and the global market, adapt them to our realities and implement them in our work.
About competition
The trend of large manufacturers opening their own distribution companies is a pattern that reflects the evolution of the market. This is especially noticeable at the local level of Uzbekistan. On the one hand, this creates competition for independent distributors, but on the other hand, it opens up new opportunities for cooperation and development.
Large companies entering the market often prefer to organize their own distribution structures. This allows them to control every stage of promoting their brands. However, it is important for independent distributors not to perceive this as a threat, but to see new prospects in it.
For example, if a manufacturer plans to develop its brand in Uzbekistan, it will inevitably need operational resources: warehouses, transport, office space, customs warehouses. Instead of resisting these changes, you can offer your resources for rent or in joint cooperation. This will allow you to make a profit, even when interacting with large companies.
Problems of local production
In Uzbekistan, new production facilities in special economic zones are often created by foreign companies, not local entrepreneurs. Foreign brands use incentives such as tax cuts and customs duties to reduce costs by opening production facilities under their own brands. This slows down the development of local brands that could compete in both domestic and foreign markets.
However, there are already positive examples. In the Samarkand region, local brands are actively supported. For example, at gas stations and in stores, preference is given to local water producers such as Grand Quality Water and VIDA, where you will not find traditional Nestle or Shaffof. This approach helps strengthen the economy and create new jobs, which is important for the sustainable development of regions.
Competition in the household chemicals market in Uzbekistan
I would like to cite very interesting statistics from BusinesStat: In 2021, the export of household chemicals from Uzbekistan decreased by 28.5%, to 6 thousand tons, due to a high comparison base. In 2022, exports grew by 38.5%, reaching 8.3 thousand tons, while deliveries to Russia and Kazakhstan increased by 10 and 3 times, respectively.
These are good indicators, but the segment remains problematic. There are practically no local brands in the country that can compete with imported goods. The main "competitors" here are counterfeits that are produced and sold in violation of the law.
For comparison: in other segments, such as bottled water or food products, local companies are successfully displacing imports. For example, local brands of dry mixes NMedov have replaced Big Bon and Rolton, and Uzbek sweets are worthy competition for foreign analogues. These industries have been developing for years, adapting to consumer demands.
However, the situation is different in household chemicals. Among the local brands, only a few can be noted: Green Tea, Crystal, and Birch Grove powders. In the diaper segment, Kippers and Lalaku stand out, first importing and then establishing their own production. However, such examples are extremely rare.
The problem also lies in the lack of trust in local brands. For example, in Russia, along with Tide and Ariel, the domestic Sukhinsky Khim. Zavod successfully competes. Such an example shows that a high-quality local product can occupy its niche in the market.
In the paper products segment, the situation is slightly better, thanks to brands like ELMA, which repackage imported raw materials. However, there is still no full production cycle in Uzbekistan, which limits the development of the industry.
In Uzbekistan, new production facilities in special economic zones are often created by foreign companies, not local entrepreneurs. Foreign brands use incentives such as tax cuts and customs duties to reduce costs by opening production facilities under their own brands. This slows down the development of local brands that could compete in both domestic and foreign markets.
However, there are already positive examples. In the Samarkand region, local brands are actively supported. For example, at gas stations and in stores, preference is given to local water producers such as Grand Quality Water and VIDA, where you will not find traditional Nestle or Shaffof. This approach helps strengthen the economy and create new jobs, which is important for the sustainable development of regions.
Competition in the household chemicals market in Uzbekistan
I would like to cite very interesting statistics from BusinesStat: In 2021, the export of household chemicals from Uzbekistan decreased by 28.5%, to 6 thousand tons, due to a high comparison base. In 2022, exports grew by 38.5%, reaching 8.3 thousand tons, while deliveries to Russia and Kazakhstan increased by 10 and 3 times, respectively.
These are good indicators, but the segment remains problematic. There are practically no local brands in the country that can compete with imported goods. The main "competitors" here are counterfeits that are produced and sold in violation of the law.
For comparison: in other segments, such as bottled water or food products, local companies are successfully displacing imports. For example, local brands of dry mixes NMedov have replaced Big Bon and Rolton, and Uzbek sweets are worthy competition for foreign analogues. These industries have been developing for years, adapting to consumer demands.
However, the situation is different in household chemicals. Among the local brands, only a few can be noted: Green Tea, Crystal, and Birch Grove powders. In the diaper segment, Kippers and Lalaku stand out, first importing and then establishing their own production. However, such examples are extremely rare.
The problem also lies in the lack of trust in local brands. For example, in Russia, along with Tide and Ariel, the domestic Sukhinsky Khim. Zavod successfully competes. Such an example shows that a high-quality local product can occupy its niche in the market.
In the paper products segment, the situation is slightly better, thanks to brands like ELMA, which repackage imported raw materials. However, there is still no full production cycle in Uzbekistan, which limits the development of the industry.
How interesting is the Uzbekistan market for foreign companies?
Uzbekistan is of significant interest to foreign players due to its strategic location and economic potential.
Convenient logistics hub. Uzbekistan is located in the center of Central Asia, providing access to markets with a population of more than 80 million people (including Kazakhstan, Tajikistan, Kyrgyzstan, Turkmenistan and Afghanistan). This makes the country an important part of the transport and trade chains in the region.
Young and growing population. According to 2024 data, the population of Uzbekistan is about 36 million people, with more than 50% of residents under 30 years old. This creates a high demand for goods, services and infrastructure projects.
Economic growth. Uzbekistan demonstrates sustainable GDP growth - about 5.6% in 2023, according to the World Bank. Investments in infrastructure, agriculture and industry are actively supported by the state.
Attractiveness for business. In 2023, Uzbekistan moved up in the Doing Business ease of doing business ranking to 69th place out of 190 countries, indicating a gradual improvement in conditions for investors.
Partnerships. Uzbekistan maintains good neighborly relations with countries in the region, including Afghanistan, making it a reliable partner for international cooperation.
Foreign companies see Uzbekistan not only as a growing market, but also as potential for long-term investment. However, to enter the international arena, it is important for the country to continue reforms and the introduction of modern standards.
Looking to the future
However, the Uzbekistan market will inevitably transform. With the development of the Modern Trade segment, large clients will become even stronger, and the share of small retail outlets will decrease. This will lead to a reduction in the number of field employees. Instead of sales representatives, the demand for trade operators who will work remotely - within systems, through hotlines - will increase.
This trend can already be observed in Kazakhstan, which is actively switching to a similar model. In Uzbekistan, we expect that such a system will also become the standard in the coming years.
Our company is preparing for these changes. Despite our youth, we actively invest in development, open new departments and experiment with new formats. For example, we already have employees who work exclusively from the office. They interact with key clients, servicing large companies. One such specialist is capable of generating a turnover of $100-200 thousand per month.
To increase competitiveness, it is necessary to develop local full-cycle production and build trust in Uzbek brands, adapting to consumer demands and adopting successful strategies from other markets.
We wish your company development and prosperity! Thank you for your interesting answers!
Uzbekistan is of significant interest to foreign players due to its strategic location and economic potential.
Convenient logistics hub. Uzbekistan is located in the center of Central Asia, providing access to markets with a population of more than 80 million people (including Kazakhstan, Tajikistan, Kyrgyzstan, Turkmenistan and Afghanistan). This makes the country an important part of the transport and trade chains in the region.
Young and growing population. According to 2024 data, the population of Uzbekistan is about 36 million people, with more than 50% of residents under 30 years old. This creates a high demand for goods, services and infrastructure projects.
Economic growth. Uzbekistan demonstrates sustainable GDP growth - about 5.6% in 2023, according to the World Bank. Investments in infrastructure, agriculture and industry are actively supported by the state.
Attractiveness for business. In 2023, Uzbekistan moved up in the Doing Business ease of doing business ranking to 69th place out of 190 countries, indicating a gradual improvement in conditions for investors.
Partnerships. Uzbekistan maintains good neighborly relations with countries in the region, including Afghanistan, making it a reliable partner for international cooperation.
Foreign companies see Uzbekistan not only as a growing market, but also as potential for long-term investment. However, to enter the international arena, it is important for the country to continue reforms and the introduction of modern standards.
Looking to the future
However, the Uzbekistan market will inevitably transform. With the development of the Modern Trade segment, large clients will become even stronger, and the share of small retail outlets will decrease. This will lead to a reduction in the number of field employees. Instead of sales representatives, the demand for trade operators who will work remotely - within systems, through hotlines - will increase.
This trend can already be observed in Kazakhstan, which is actively switching to a similar model. In Uzbekistan, we expect that such a system will also become the standard in the coming years.
Our company is preparing for these changes. Despite our youth, we actively invest in development, open new departments and experiment with new formats. For example, we already have employees who work exclusively from the office. They interact with key clients, servicing large companies. One such specialist is capable of generating a turnover of $100-200 thousand per month.
To increase competitiveness, it is necessary to develop local full-cycle production and build trust in Uzbek brands, adapting to consumer demands and adopting successful strategies from other markets.
We wish your company development and prosperity! Thank you for your interesting answers!
