Analysis of the market of carpets and rugs in Kazakhstan
The relevance of research
Carpet (other Indian carpet, carpet) - a dense woven product made of various kinds of yarn (or its synthetic imitation), used to cover floors, sometimes other indoor surfaces (tables, sofas, etc.) in decorative, insulating , ritual or acoustic purposes
Purpose of the study
Analysis of the state of the market for carpets and rugs, assessment of the market volume, analysis of competitors, as well as identification of factors affecting the market of carpets and carpets
Content
Part 1. Market overview of carpets and rugs in Kazakhstan
1.1. Main characteristics of the market
1.2. Dynamics of the market volume of carpets and rugs in Kazakhstan in 2016–2020 Potential market capacity
1.3. Trends, problems and prospects of the market of carpets and rugs in Kazakhstan
1.4. Assessment of factors affecting the market
1.5. Stage of the life cycle of the market of carpets and rugs in Kazakhstan
1.6. Competition from substitute products
1.7. Analysis of conducted tenders for the purchase
Part 2. The main companies of Kazakhstan in the market of carpets and rugs
2.1. The main companies producing carpets and rugs in Kazakhstan
2.2. Market shares of carpets and rugs of the main manufacturers
2.3. Profiles of major manufacturing companies
Part 3. Analysis of the production of carpets and rugs
3.1. Volume and dynamics of domestic production of carpets and rugs in Kazakhstan
3.2. Share of exports in the production of carpets and rugs
Part 4. Analysis of foreign trade deliveries of carpets and carpet products of Kazakhstan
4.1. The volume and dynamics of imports of carpets and rugs
4.2. Import structure
4.3. The volume and dynamics of exports of carpets and rugs
4.4. Export structure
Part 5. Assessment of factors of investment attractiveness of the market
Part 6. Forecast for the development of the market of carpets and rugs in Kazakhstan until 2025
Part 7. Recommendations and conclusions
Research excerpt
Part 1. Market overview of carpets and rugs in Kazakhstan
1.1. Main characteristics of the market
The history of woven carpets has more than one thousand years. Since ancient times, people have decorated their homes with carpets. Simple, hand-woven and dense pieces of knitted fabric served not only decorative purposes, but also testified to the wealth of the owners, and most importantly, they served as a reliable way of protection from the cold.
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With the invention of aniline dyes in the th century, carpet production experienced a real boom. Carpets have fallen sharply in price, competition has increased. Turkey, China and even Europe began to push the age-old hegemony of Persia. But the best carpets, for example, from silk threads, are still very expensive. Today, aniline paints are gradually being replaced by polymer and synthetic ones, which do not need to be fixed and do not shed. The most modern, third generation of dyes is chrome. By properties, they are almost indistinguishable from natural ones, but not so juicy in color.
However, modern technology has made it possible to equalize the quality of synthetic carpets with classic wool. Synthetic carpets seriously win in operation: they are easier to care for.
Depending on the production technology and the method of fixing the yarn on the basis, the following types of carpets are distinguished: woven, woven, felt, tufted (from the English tuft - “to grow in bunches”) and needle-punched. Needle-punched and tufted production is fast, automated, and cheap. The process of making woven carpets is much slower and more complicated. Imitating traditional hand-woven carpets, woven carpets are noticeably more expensive than tufted and needle-punched ones. They are flat textile products consisting of two intersecting systems of threads: longitudinal and transverse.
Since significant events took place in the market of cows and carpet products in Kazakhstan in 2013-2015, in some sections of the study, the periods for analyzing indicators were extended.
The market of carpets and rugs in Kazakhstan during the entire period under review is dominated by imported products - its share fluctuates ... largely depends on both the volume of imports into the country and the size of its own production:
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Diagram 1. The ratio of imported and domestic products in the market of carpets and rugs in Kazakhstan in 2014-2020,%
1.2. Dynamics of the market volume of carpets and rugs in Kazakhstan in 2016–2020 Potential market capacity
Let's consider the dynamics of the volume of the carpet market in Kazakhstan. The period from 2013 to 2020 is indicative.
The dynamics of the carpet market in Kazakhstan is undulating and reflects the overall economic situation in the country. ...
The market for carpets in Kazakhstan is at the stage of maturity of the life cycle, while such goods as carpets are inexpensive compared, for example, with furniture or other durable goods, therefore, latent and deferred demand is realized by consumers faster than for these other groups of goods.
1.3. Trends, problems and prospects of the market of carpets and rugs in Kazakhstan
Among the main trends and prospects for the carpet market in Kazakhstan are:
...
In addition, among the problems of the industry at present, the main ones can be noted:
1. Features of consumer behavior and insufficient level of consumer confidence in
2. The issue of import and export of carpet products.
3. Personnel issue.
According to some reports, during the years of reforms and crises, qualified managerial and engineering personnel, and especially highly qualified workers, were lost. The problem is caused by a decrease in the quality of training of young specialists in universities and colleges, a lack of necessary specialties in educational institutions, and a decrease in the interest of young people in obtaining “not fashionable” professions at the moment, especially a working profile. Also, a rather high tuition fee negatively affects the recruitment of students in the required specialties. The problem is especially acute in the above circumstances in rural areas.
1.4. Assessment of factors affecting the market
Macroeconomic factors influence the dynamics of all sectors of the Indian economy, including the carpet market. The main groups of factors are: economic, political, social and technological.
Economic
GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects the total value of goods, works and services that were produced and provided in the country in a year. Gross domestic product is the main indicator on the basis of which the level and pace of the country's economic development are determined.
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Industrial Production Index
This is an indicator of the dynamics of the volume of industrial production, its rise or fall, is defined as the ratio of the current volume of production in monetary terms to the volume of industrial production in the previous or other base year. This index characterizes the change in GDP due to the fundamental sectors of the economy: mining, manufacturing, production and distribution of electricity, gas and water.
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Demographic (social) factors
During 2014-2020, there was an increase in the population of Kazakhstan. ...
General trends in macroeconomic indicators can also be traced in such a value as real incomes of the population, which determine the level of effective demand.
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The formed culture of consumption. Carpet is a traditional floor covering that provides comfort, soundproofing and is an element of decor.
Carpet is one of the oldest inventions for decorating and insulating any home: from the yurt of a nomadic tribe to a luxurious baroque palace. For many centuries, the carpet was not only a symbol of wealth, but also a piece of art, since long painstaking manual labor was required for its manufacture.
technological
The development of markets for substitute goods is a factor that negatively affects the carpet market.
The import dependence of equipment for the production of carpets is a factor that negatively affects the carpet market.
The pace of construction of residential real estate
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Political
Mandatory certification.
Enterprises on the territory of the Customs Union produce and sell carpet products in accordance with TR CU 017/2011 ""On the safety of light industry products"", which regulates the production of light industry products. According to this regulatory document, machine-made carpet products (paths, textile coverings, carpets) are subject to declaration - using schemes 3, 4 and 6 e. Scheme 3 is designed to check mass-produced carpet products, scheme 4 - to assess the condition of individual batches, and scheme 6 - to assess the quality management in production. According to the technical regulations, an enterprise can undergo certification instead of declaring.
The procedure for issuing a declaration for carpet products
To carry out the declaration, an enterprise interested in obtaining a document of conformity must submit an application. It provides basic information about the manufacturer and the products that he plans to sell in the Customs Union.
After processing the application, the experts of the certification center select a scheme for checking carpet products, draw up a list of evidence of their compliance with TR CU 017/2011, and submit samples of carpet products for testing. Only a laboratory accredited to test this type of product can conduct tests. Laboratory assistants check the presence of formaldehyde in the composition of products, the strength of the electrostatic field, the quality of carpet coloring, and the compliance of their marking with the requirements established in TR TS.
Credit policy. Today it is quite difficult to imagine the progressive development of the economy without the active participation of the credit system. It should also be noted that the assessment of the availability of credit resources for both legal entities and individuals is a significant indicator that allows assessing not only the demand for credit funds, but can also serve as a reflection of the real economic situation both in the region and in the economy as a whole.
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Mortgage credit lending. Some programs operate on the territory of Kazakhstan:
Mortgage 7-20-25
One of the main mortgage programs, which is aimed at expanding the possibility of acquiring new housing for each family in Kazakhstan. The main parameter of this mortgage program is loyal conditions:
- Only primary housing from the developer at the choice of the borrower
- Lack of housing on the territory of the Republic of Kazakhstan on the right of ownership
- No mortgage loans
The terms of lending under this state program are in its name:
- 7% rate (7,2% GERR)
- 20% down payment
- 25 years maximum term
Baspana Hit
This mortgage program is an analogue of the state program ""7-20-25"", but unlike the second one, it is aimed at the secondary housing market. But ""Baspana Hit"" can buy not only secondary, but also housing from the developer and even invest in equity construction at the stage of excavation with borrowed funds. There are no separate conditions for this program, such as ""7-20-25"". Lending terms:
- Rate 10,75%
- 20% down payment
- Loan term up to 15 years
...
Own mortgage programs
Each credit organization, among those who provide mortgage loans, has its own housing lending programs for citizens.
Concluding the assessment of the factors influencing the carpet market, we will summarize the key ones in the framework of the STEP-analysis.
Table 2. STEP-analysis of factors influencing the market of carpets and rugs in Kazakhstan
Thus, at the moment, the market of carpets in Kazakhstan is experiencing a positive influence of environmental factors of weak strength.
The negative impact is manifested due to the decline in GDP, the devaluation of the tenge, the decline in the IPP in 2020, the high import dependence of equipment, the development of markets for substitute goods, etc.
The following factors have a positive effect on the market: the formed consumer culture, the dynamics of residential real estate construction, mortgage lending programs, credit policy, population growth, etc.
All groups of factors have a multidirectional influence on the market.
1.5. Stage of the life cycle of the market of carpets and rugs in Kazakhstan
At the moment, the carpet market in Kazakhstan is at the stage of life cycle maturity. At the same time, the quality of the product is at a high level, so there is no need to make any changes to the basic characteristics of the product. The product is presented on the market with a large number of modifications.
At this stage, the role of price competition increases, as the goods are offered for sale by many manufacturers and importers. There are original developments of competitors. The market at this stage is highly segmented, enterprises are trying to satisfy all possible needs.
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It is at this stage that the likelihood of repeated technological improvement, or product modification, is most effective. The main task of the enterprise at this stage is to maintain and, if possible, expand its market share and achieve a sustainable advantage over direct competitors. At the moment, various marketing activities, mass and intensive advertising, price offers will be effective.
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1.6. Competition from substitute products
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As follows from the table, carpet substitute products are quite diverse both in terms of their general characteristics, color possibilities, and the ability to meet the various needs of customers: in coziness, comfort, practicality, originality, and so on. However, each of them has both advantages and disadvantages, while some consumers prefer a certain type of flooring, and some are forced to choose those materials that are not allergic.
Of course, the carpet has been a classic product for a long time, modern productions, improved materials and threads, modern colors appear, but the influence of substitute goods, which is now at an average level, will in the future be strengthened by trends: the desire for environmental friendliness and naturalness, an increase in the number of allergy sufferers, increasing consumer requirements for quality and variety, the growing popularity of attracting specialists in the design and interior design, etc.
In terms of non-domestic use, experts note the growing importance of carpet as a good insulating material in retail outlets and commercial offices. However, the high price and low durability of soft flooring compared to ceramic and wood-based laminates may have a negative impact on the market.
Demand for carpet products in residential applications will depend on the completion of housing construction. Carpets are installed in newly built residential areas due to their reasonable cost, favorable aesthetics and ease of installation. The residential replacement segment will also depend on the consumer's need to replace the old carpet with new.
1.7. Analysis of conducted tenders for the purchase
For the period of 2020 and the first 2 months of 2021, according to the portal ""Public Procurement of the Republic of Kazakhstan"", announcements were posted for 331 public procurements for the keyword ""carpets"". At the same time, a significant part of such purchases was not directly related to the need to purchase carpets and carpet products, as they could include services for dry cleaning or carpet washing, the purchase of shampoos and other carpet cleaning products, carpet cleaning brushes, etc.
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The analysis of information on state competitive purchases of carpets, available in the public domain, showed that:
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Part 2. The main companies of Kazakhstan in the market of carpets and rugs
2.1. The main companies producing carpets and rugs in Kazakhstan
Among the Kazakh companies producing carpets, only 2 are large ...
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2.2. Market shares of carpets and rugs of the main manufacturers
Diagram 10. Shares of the main manufacturing companies of Kazakhstan in the market of carpets and rugs in 2020,%
In 2020, foreign manufacturers occupy a share of just under 70% of the market for carpets and rugs in Kazakhstan. Of domestic manufacturers, only 2 companies can be noted: ...
...
However, there are no up-to-date data on the project implementation stage in Kazakhstan for 2020-2021.
2.3. Profiles of major manufacturing companies
Let's present detailed information about the participants of the carpet market in Kazakhstan.
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Part 3. Analysis of the production of carpets and rugs
3.1. Volume and dynamics of domestic production of carpets and rugs in Kazakhstan
Let's consider the dynamics of carpet manufacturing volumes in Kazakhstan.
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3.2. Share of exports in the production of carpets and rugs
During the period shown in the diagram, the share of exports in the production of carpets has a wave-like character, which is due to the dynamics of the volumes of production and export of products.
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Part 4. Analysis of foreign trade deliveries of carpets and carpet products of Kazakhstan
4.1. The volume and dynamics of imports of carpets and rugs
Consider the indicators of foreign trade operations with carpets in Kazakhstan.
Diagram 13. The volume and dynamics of imports of carpets and rugs to Kazakhstan in physical terms in 2014-2020, thousand square meters m
According to preliminary estimates, in 2020, carpets worth ... million dollars were imported.
The dynamics of imports in value terms (in tenge) is fundamentally different from the above, which is due to fluctuations in the exchange rate of the national currency against the dollar.
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4.2. Import structure
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The leading importer in 2015, 2019, 2020 was ...
4.3. The volume and dynamics of exports of carpets and rugs
Until 2014, the export of carpets in Kazakhstan was not developed, which is explained by the lack of mass production in the country at that time.
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Diagram 18. Balance of exports and imports in 2014-2020, thousand square meters m
During the period under review, the trade balance (the difference between exports and imports) in the carpet market in Kazakhstan remains sharply negative. The volume of imports exceeds exports by more than ... times.
4.4. Export structure
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The top exporters in 2019 were: ...
Part 5. Assessment of factors of investment attractiveness of the market
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Negative factors of the investment climate in the carpet market dominate the positive ones.
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The most significant positive factors.
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The most significant negative factors.
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Part 6. Forecast for the development of the market of carpets and rugs in Kazakhstan until 2025
We will analyze the market based on methods based on identifying trends over time, adjusted for expert opinion in the industry.
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Domestic industrial enterprises are in a difficult situation due to the situation with the coronavirus. But thanks to the measures taken by the state to support business, they are gradually restoring their activities and even planning to expand.
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By the end of April, the company began to gradually increase capacity and recall employees. Gradually, it switched to normal mode and returned almost all workers to their places.
Due to the fact that the carpet market in Kazakhstan is at the stage of maturity, the pent-up demand for such goods is realized gradually, and also taking into account the data of the forecast for the economic development of Kazakhstan, GidMarket analysts predict ...
Part 7. Recommendations and conclusions
Comfort technologies are becoming more widespread. Those interior elements that were once considered luxury goods are becoming available to a wide range of consumers in modern conditions of advanced technologies. The last two decades have been a time of mass distribution of carpets and rugs. In apartments and office buildings - the creation of comfort and functional convenience; woolen and polypropylene carpets can make a significant contribution to the formation of a full-fledged living space. Carpets are beautiful and warm, they bring home comfort. Heat and sound insulation, noise absorption, as well as vibration comfort - these are the main properties of carpet products.
The main task before the enterprises producing carpet products is to develop a product in demand, which should optimally combine design, operational and functional parameters necessary to create warmth and beauty. Sometimes it is the carpet that can set the cosiness and harmonious combination of the interior decoration of an office or home with the furnishings that fill the interior of a particular room. Modern carpet production has already undergone changes: now there is a technique that can make a carpet in five minutes. The production of carpets can become a profitable business, because in modern times, not only Turkish and Persian carpets, but also Kazakh ones are in demand. The quality indicators of a carpet that affect its price are its material, manufacturing technology, the length and density of the pile, decorativeness, and even the reputation of the manufacturer.
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Companies that plan to start activities in the carpet market are recommended at the first stage:
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Diagrams
Diagram 1. The ratio of imported and domestic products in the market of carpets and rugs in Kazakhstan in 2014-2020,%
Diagram 2. Dynamics of the market volume of carpets and rugs in Kazakhstan, 2013–2020, thousand square meters m
Diagram 3. Dynamics of GDP in Kazakhstan, 2013–2020 (January-September), billion tenge, %
Diagram 4. Quarterly dynamics of the US dollar exchange rate against the tenge, 2015-2020, tenge per 1 US dollar
Diagram 5. Dynamics of Kazakhstan's IPP in 2013 - 2020, % to the previous year
Diagram 6. Dynamics of the population of Kazakhstan at the end of the year, 2013-2020, thousand people
Diagram 7. Dynamics of real incomes of the population of Kazakhstan, 2013 - 2020, % to the previous year
Diagram 8. Dynamics of commissioning of residential buildings in Kazakhstan in 2011-2020, thousand sq. m of total area
Figure 9. Stage of the life cycle of the market of carpets and rugs in Kazakhstan
Diagram 10. Shares of the main manufacturing companies of Kazakhstan in the market of carpets and rugs in 2020,%
Diagram 11. Dynamics of production volumes of carpets and rugs in Kazakhstan for 2014–2020, thousand square meters m
Diagram 12. The share of exports in production for 2014–2020, %
Diagram 13. The volume and dynamics of imports of carpets and rugs to Kazakhstan in physical terms in 2014-2020, thousand square meters m
Diagram 14. The volume and dynamics of imports of carpets and rugs to Kazakhstan in monetary terms in 2014-2020, million dollars
Diagram 15. Volume and dynamics of imports of carpets and rugs to Kazakhstan in monetary terms in 2014-2020, billion tenge
Diagram 16. Dynamics of export of carpets and carpet products from Kazakhstan in physical terms in 2014-2020, thousand square meters m
Diagram 17. Dynamics of export of carpets and carpet products from Kazakhstan in monetary terms in 2014-2020, mln USD
Diagram 18. Balance of exports and imports in 2014-2020, thousand square meters m
Diagram 19. Forecast of the market volume of carpets and rugs in Kazakhstan in 2021–2025, thousand square meters m
Tables
Table 1. Weighted average interest rates of banks on loans issued in tenge, 2015 (Dec.) -2020 (Sep.), %
Table 2. STEP-analysis of factors influencing the market of carpets and rugs in Kazakhstan
Table 3. Advantages and disadvantages of substitute products
Table 4. Announcements on public procurement of carpets and carpet products of the Republic of Kazakhstan for the period from 01.01.2020/24.02.2021/1 to / / for amounts over million tenge
Table 5. Commercial tenders for the purchase of carpets in Kazakhstan in December 2020 - February 2021
Table 6. The main companies producing carpets and rugs in Kazakhstan in 2020
Table 7. Profiles of the main manufacturing companies in the market of carpets and rugs in 2020
Table 8. Structure of imports of carpets and rugs by importing countries in 2015, 2019, 2020 (Jan-Nov), units rev.
Table 9. Structure of exports of carpets and rugs by recipient countries in 2015, 2019, 2020 (Jan-Nov), units rev.
Table 10. Assessment of factors of investment attractiveness of the carpet market
Table 11. Forecasts of economic growth in Kazakhstan in 2021, in % to previous year
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