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Using an Agent or Distributor in Tajikistan

Tajikistan is a mountainous country. The cities of Dushanbe, Khujand, Qurghonteppa, and Khorugh are the major population and economic centers.

Granting official distributor status to a Tajik company responsible for a specific region and/or expansion to other regions can be a good market entry strategy; however, because of the fragmented domestic market, this may not work well with all commodities.

A detailed analysis should be completed in advance. Very few Tajik companies have official distributor status for U.S. goods and services. Due to limited English use in Tajikistan and the distance from the United States, information about U.S. products is not widespread.

Competitors from Asia and Europe are closer to the market. Sales of some U.S. goods originate from neighboring hubs such as Almaty, Bishkek, Tashkent, Moscow, Dubai, and Istanbul

Advantages of using a distributor:

  1. A local agent may have a better sense of the market and potential consumers;
  2. Allows the establishment of a presence in Tajikistan with relatively little startup cost;
  3. Circumvents the need to navigate the often difficult and frustrating process of establishing a business entity in Tajikistan, including dealing with corrupt officials, long delays, and contradictory regulations.

Disadvantages:

Local companies need training in Western business practices including reporting, accounting, sales, marketing, customer care, and English language.

Local companies may lack the skills and resources required to manage a nationwide distribution and sales network.

Cultural and business differences may lead to misunderstandings; there is also the potential for unscrupulous behavior.

While each situation is different, the following general comments apply:

Tajikistan’s domestic market is fragmented due to mountainous terrain and poor transportation infrastructure; therefore, U.S. companies may want to have separate agents in each region.

A local distributor will need start-up support from its U.S. partner to be able to effectively reach out to clients and transfer skills and knowledge.

The U.S. company should expect to support its Tajik partner in a nationwide campaign to promote its goods.

Most U.S. companies are not fully aware of the market conditions and market peculiarities in Tajikistan. Promotion and product materials must be available in Russian or Tajik language.

 

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