GEORGIAN ENTREPRENEURS: AN INTERVIEW WITH WISSOL GROUP'S SAMSON PKHAKADZE
Investor.ge is launching a new series of interviews exploring the biggest trends in Georgian business innovation and entrepreneurialism. In each issue, the best and brightest minds in Georgian business will discuss their ideas, market trends, and the obstacles that face Georgian entrepreneurs today. In the first conversation, Investor.ge's Maia Edilashvili spoke with Samson (Soso) Pkhakadze, the president of Wissol Group.
Wissol Group's Samson Pkhakadze and U.S. Ambassador Richard Norland
Wissol Group's Samson Pkhakadze has made a career out of taking risks - and succeeding - in Georgia's challenging retail market.
Rolling out ambitious projects - like Georgia's first Wendy's franchises at a time when majority of businesses are delaying their most serious projects in anticipation of the October 27 election - is business as usual for Pkhakadze.
Georgian business, he noted, is about taking "bold steps."
"[E]ven if there is a period of slowdown, we would not allow ourselves to be passive," he said.
"Assuming responsibility for your own decisions is part of being in business and it's the same in every country. Yes, countries in economic transition have higher risks, but at the same time, higher risk means higher yield per one dollar invested. Then it's up to the business group how to implement and manage the project."
Taking calculated risks is a critical part of being an entrepreneur anywhere, but especially in Georgia - and in particular in the retail sector, which depends on a small, developing middle class.
When investors analyze the competitiveness of Georgia's business landscape, either locally or internationally, they frequently complain about the small size of Georgia, estimated at around four million. For Wissol, however, the biggest obstacle is the lack of strong middle class and the price of new products and services on the market.
According to official statistics, as of August 2013, the monthly subsistence minimum in Georgia for an average citizen is just 129 lari (approximately $78) and for an average family - 145 lari ($87), while most professions top out at 1,588 lari ($960) a month .
But with Georgia's untapped potential in various areas, including a convenient geographic allocation and transit potential, Pkhakadze sees an opportunity.
"Many countries of the same size as Georgia have a 30-times-bigger economy," he said.
"What matters more than the size of the population is how developed the economy is, and I think Georgia has good potential."
In order to achieve this potential, Pkhakadze thinks that "very good cooperation" should develop between the government and business and a higher level of political stability should be reached.
"The government, business and society - all these sides should reach a consensus that economic development is a prerequisite for the country's development and then each should do its own part," he said.
Though, this process, Pkhakadze believes, is going to take time.
"Not just hundreds of businessmen but the whole society should decide that improving purchasing power is our main goal and only that can lead to a higher employment rate," he said.
"The development of a strong middle class is paramount and for this to happen those who create jobs should be appreciated and supported."
Pkhakadze noted that Wissol Group still has "many things to do" and it plans on expanding its retail holdings - as well as investing capital in education.
"We have many things to do - to strengthen each of our businesses and develop them further. For this to happen, the country's economy should be supportive and the overall environment [should be] stable," he said.
"In future, we see ourselves in the retail business because, in our opinion, when you know something very well you should do it for your whole life."
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