Duty-Free Business in Georgia

Duty-Free Business in Georgia

Duty-free business is still struggling with the negative effects of the pandemic. The company Duty Free Georgia which manages seven stores on the borders of Georgia, could not return to pre-pandemic annual figures. However, its general director Omer Salur has positive calculations for 2023. In the special column of Terabank’s personalized banking “Select” Forbes Georgia interviewed Mr. Salur.

Mr. Salur, first of all, tell us how you started your career in Georgia.

It was the beginning of 2013 when I received an offer from the owners of the company to take this position. I remember that the first meeting with them lasted for five hours, during which we discussed how this business could be successful in Georgia. Two weeks after this meeting, I had already packed my bag and was leaving for Georgia. Before that, I worked and lived in Turkey, and for some time in Russia, Belarus, and five different European countries. I managed duty-free shops on cruise ships. In addition, I also worked for Philip Morris International.

That means you had experience in this business even before Georgia…

Yes, I already had experience in a similar business, that’s why taking the current position was not significantly challenging for me. However, before I started my career in Georgia, I didn’t know much about this country. And then I got to know the reality here and I was positively surprised by the hospitality and traditions of the people here.

Why did you accept this offer?

On the one hand, the new opportunities and challenges were attractive, and on the other hand, it was interesting for me to be able to use my experience somewhere else. Before that, I naturally learned about the company’s history and realized that I could contribute to the company’s potential.

Today, at the end of 2022, how satisfied are you with the results you achieved?

We have been growing the company and its financial indicators year after year, however, the Covid-pandemic that began in early 2020 significantly hindered the development and growth of our company. In March 2020, all our stores were closed because the borders were closed. We know how long the pandemic and closed borders have lasted. After the opening of the borders in the summer of 2021, we slowly noticed the movement of people. We had to start all from the beginning. Since then, we have been trying to increase sales figures month by month.

Did you manage to return to the pre-pandemic level?

Fortunately, we were able to return to pre-pandemic levels in December 2022. However, we are still far from the pre-pandemic level in annual terms. As you know, Azerbaijan’s border with Georgia is still closed. The “Red Bridge” checkpoint is closed. Until now, no one knows when the border will open and what to expect soon. We have two stores there, which are still closed. This is extremely damaging for us. But we managed to keep all our employees and till now we are paying them 100% of their salaries which I think is the greatest manifestation of social responsibility on the part of our company. We think that it is important to support employees in difficult situations. In addition, when the pandemic started, we thought about what we could do for Georgian society. We allocated 60,000 dollars and distributed food baskets to those who needed them.

You currently have seven stores on the borders of Turkey, Armenia, and Azerbaijan. Do you research your customers’ needs and wishes?

What kind of products are mainly in demand in your stores?

It depends on the store and the border. For example, at the Turkish border, the main demand is for tobacco and spirits. The reason for this is the price. Tobacco and spirits are expensive in Turkey due to their tax regulations. Compared to market prices in Georgia, there can be a 50% price difference. If we talk about the shops on the border of Armenia, there is a demand for everything, including accessories, perfumes, cosmetics, tobacco, and alcoholic beverages. On the border of Azerbaijan, based on the market reality there, tobacco sales were in the first place.

You also hold the position of CEO of Duty-Free Group. Apart from Georgia, in which other countries do you operate?

We have stores in several other countries. Among them are Paraguay, Kyrgyzstan, Slovakia, and soon we will start operating in Iraq. However, Georgia is the main country for our company, we have our head office here.

How do you choose the country where you decide to start operating?

Globally some of the biggest companies in this business that have bigger stores take fewer risks when opening a new store. Compared to them, when we choose a new location, we take more risks. We believe that if you don’t take risks, you don’t get results, that’s why we are more flexible in this regard. We make decisions quickly, which we consider an advantage. To select a new location, we go to different countries, observe and analyze, and then take a risk.

With a lot of work and business trips, do you manage to find free time?

This is a good question, I am very busy, I travel a lot, especially to the countries where our company operates. And when I am in Georgia and manage to find time, I travel around Georgia with my wife. I like to visit new places, Georgia is a diverse and beautiful country, that I have not discovered yet fully. My wife also loves to travel here. In addition, I like to meet my friends, I also have a hobby that I don’t get to do often, however, once in a few months I go on motorcycle trips with my friends.

Do you use Terabank Select offers when planning your trip?

When did the cooperation between you and Terabank start?

When I arrived in Georgia, of course, I started to search proper financial institution that I would become a customer of. I was researching the services and offers of different banks. Additional offers are also important to me since all banks have standard services. That’s how I discovered Terabank, which I became a regular customer of. And then our company also became a customer of Terabank. As you know, our business is specific as we work with seven different currencies. Terabank has a good exchange rate, plus they are always quick to respond to any issues or questions. All my accounts are in Terabank. I am happy to cooperate with them.

Finally, I would like to ask you about your plans for next year, what are your goals for 2023?

In the coming year, we intend to continue our efforts to maintain growth. We plan to further expand our footprint and operations in Georgia. At the beginning of the year, another store will be opened at the border checkpoint “Ninotsminda”. This will be the eighth store for our company in Georgia.

What about the plans beyond Georgia?

We are going to enter at least three new countries by next year, including Iraq. We are also exploring opportunities on the African continent in this regard, our business in this region has a lot of potential. In addition, we also observe the countries of Asia and the CIS.

The material is presented by Terabank’s personalized banking services – Select.

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