Overview
Operating in the Azerbaijani market requires patience and a long-term perspective. It is important to have a local partner that facilitates the marketing and selling goods and services and interacts with the local government. Identifying a reliable partner requires sufficient due diligence. The U.S. Embassy’s Commercial Unit can help U.S. companies conduct market research, identify potential partners, and conduct due diligence.
The Azerbaijani retail sector is becoming increasingly regulated and moving off the “street” into shops and retail outlets. Azerbaijani consumers are price sensitive and brand conscious. U.S. goods and services typically enjoy a price premium and good brand recognition. New shopping malls and supermarkets have increased the profile of western brands in recent years. Counterfeit consumer goods, however, are a problem. Furthermore, the Azerbaijani market remains segmented based on income. The largest share of the population earns a monthly wage of approximately $487 and has limited disposable income; a small, but growing middle class earns roughly $1,000 per month; and a concentrated, but very wealthy segment of the population, mostly located in Baku, has sufficient income to purchase luxury goods. The 2015 currency devaluations, and, more recently, decreased oil prices and the COVID-19 pandemic, decreased the purchasing power of many Azerbaijanis and reduced demand for high-end goods and services.
As Azerbaijan develops its tourism industry, the number of visitors from Iran, Iraq, and Gulf Arab states have increased significantly, representing a growing segment of the shoppers in Baku’s malls.
Trade Promotion and Advertising
Advertising in Azerbaijan is primarily carried out through television, radio, newspapers, and billboards. Internet advertising is growing, especially through social media, but does not have the same audience as it does in countries with greater computer ownership. Outdoor billboards are widely used in urban centers for advertising and trade promotions. Outdoor advertising for tobacco and alcohol products is prohibited. Newspapers in Azerbaijani and Russian are published daily, except Sunday, and English-language papers are published weekly. Newspapers are widely read and provide an effective means of reaching Azerbaijani consumers with disposable income. Television advertising is possible on state-run and private national TV networks. There are also popular private FM radio stations and numerous Baku-based trade shows and exhibitions that provide opportunities to market U.S. goods and services.
More information on conference, trade shows and exhibitions can be found at the following websites:
Pricing
Prices in Azerbaijan must be quoted in Azerbaijani manat. Azerbaijanis bargain over prices outside of grocery stores and retail stores in shopping malls. Prices for gasoline, pharmaceuticals, and some food products are regulated.
Sales Service/Customer Support
Customer service is underdeveloped and is not typically up to U.S. standards. To promote tourism, the State Tourism Agency undertook programs that train service sector employees to improve customer service standards in the tourism industry. Product guarantees are rare and not always honored by local partners.
Local Professional Services
Companies interested in entering the Azerbaijani market should seek advice on tax and legal issues from a reputable agent early and often.
The following websites may be of use in identifying local service providers:
Principal Business Associations
The largest and most active business association in Azerbaijan is the American Chamber of Commerce (AmCham). Established in 1996, AmCham is a private, non-profit business association of over 250 members and associates from every sector of the Azerbaijani economy. AmCham represents approximately 80 percent of all foreign investment and a significant portion of local investment in Azerbaijan. Through its industry sector committees, members can share information, raise issues of common concern, and propose possible solutions. AmCham has maintained an active role in facilitating a public-private dialogue on economic reforms by submitting a biennial White Paper of proposals to the government as well as hosting various conferences on topics such as customs and tax regimes with several government agencies.
Limitations on Selling U.S. Products and Services
The Embassy is not aware of any limits on selling U.S. products or services in Azerbaijan.