Issue 3, 2017. June-July



In the last decade, the Georgian capital has witnessed a notable growth of modern grocery retailers and modern shopping centers. took a closer look at the changing nature of retail in Tbilisi and investigated how that is affecting traditional markets.

Giulia Bernardi

Traditionally linked to bazaars, open markets, street vendors and family-run shops, the Tbilisi retail landscape has undergone significant developments over the last few years.

A Modern Competitor

The growth of hypermarkets and supermarkets have given Georgian customers an appealing alternative to bazaars and small corner stores: the possibility to shop in a clean and modern environment with a wider range of products.

Nukri Nozadze, the administrator of Borjomi Bazaar, told bazaars have lost part of their clients to the modern markets.

"Part of our clients, who belong to the middle class and used to shop in bazaars, has switched to supermarkets. There they can shop in a significantly more comfortable situation than in bazaars, and they can find those products that they cannot find in local open markets," he said.

While hypermarkets have been around for a bit longer, shopping malls appeared in Georgia only a few years ago. Tea Lominadze, Marketing Director of East Point, told that since their opening in 2015 profits have been constantly growing.

She would not provide figures, citing commercial secrets. But she noted that "since our opening, we are rising from month to month. It is a matter of time: customers will switch from bazaars to shopping malls."

Since Tbilisi Mall opened in 2012, several other projects followed: Gldani Plaza and Gldani Mall opened in 2014, East Point in 2015. Hualing Mall, Gldani Central and Galleria Tbilisi are currently under construction.

"We are gaining the trust of people by offering a good atmosphere and comfort, competitive prices and a better selection compared to that offered in non-branded shops," said Tina Kukhianidze, Executive Director of Gldani Mall.

Dariusz Rudzinski, Shopping Center Manager of Galleria Tbilisi, notes that the malls are creating an experience beyond shopping.

"We create malls and shopping centers to give our customers an experience. Shopping is fun-it is not just to buy. Galleria Tbilisi will be attractive and affordable to everybody," Rudzinski said.

Vendors in bazaars complain that their sales have diminished since the opening of hypermarkets and shopping centers.

"Big shopping malls interfere with our business. The more they open, the fewer people will come here. They create higher competition," said Laila, who sells fruit and vegetables at the Borjomi Bazaar. Maia, who sells electronic devices at Lilo Mall agrees. "We cannot compete with them," she said.

Bazaars as a Substitute

Experts believe that in the short term, bazaars will continue to exist due to their ability to provide needed goods for less.

"As long as the low-income part of the population represents the largest part of Georgians, nothing will change. Asian-style markets existed and will continue to exist," Borjomi Bazaar's Nozadze said.

Esben Emborg, Managing Partner at SEAF, Caucasus Growth Fund, agrees. "Bazaars will be reduced and they will specialize. The shift is already happening and it will continue. But, it still has a strong correlation with disposable income. Many people are still going for the cheapest option possible; therefore, I am sure that bazaars are going to be around for some time," he said.

Eventually, however, bazaars will have to develop and reinvent themselves in order to survive. And some of them are already doing that.

Online Future

Gagua, the President of Lilo Mall, one of the oldest markets in Georgia, told that they have decided to turn to e-commerce to compete in today's changing retail market.

"We could have modernized all the shops and transformed Lilo Mall into a comfortable shopping unit. But that would have increased rents for our tenants. Therefore, we are trying to transfer the market onto the internet. Online is the future. We are now creating a website that will work like eBay, but only with Lilo Mall products, and people will be able to buy online," he said.

While Georgians have been using internet sites to purchase goods from abroad, online shopping is still a relatively new option for Georgian stores, and service providers are starting to attract customers to e-commerce.

Tsotne Ebralidze, Managing Director of Hospitality and Real Estate at the Georgian Co-Investment Fund, told that at this time online shopping is linked to foreign products.

"I would say it is booming, but not because of the online shops within Georgia," he said.

Emborg agrees that online shopping does not represents a significant part of the Georgian retail sector. "For the local market, it must be less than 1% of the trade. It is a sector that will grow, just like everything else, but I do not see it happening here soon," he said.

Tbilisi's Plan for Street Vendors

Tbilisi Municipality started a program to clear Tbilisi streets of street vendors in November 2016.

While Georgian law forbids selling goods on the street, it is still a widespread practice.

The first stage of the program is to move illegal vendors out of all the main tourism destinations and the areas around the metro stations.

Eventually, official vending spots will be established around the city for a defined list of products, according to Irakli Lekvinadze, the Deputy Mayor of Tbilisi City Hall.

"The first step of the plan was to completely eradicate street vendors. But the second step will be to define specific products that can be sold on the street, such as magazines, newspapers, flowers and paintings. This will be allowed only in certain places, and they will be subject to very strict regulations," he told

All street vendors will be moved to organized markets, he said, noting that City Hall has been negotiating with the Association of Bazaars in order to provide sellers with alternative solutions. Street vendors have been offered to move to regular markets without having to pay rent for the first six months. At the moment, 3,000 such places have been offered.

Street Vendors Around the World: A $10 Trillion-Dollar Industry

From hot dogs and bottled water, to used books and popcorn, street vendors are a part of urban life in Tbilisi and cities around the world.

There are no reliable statistics on how many people depend on informal street trading, although it is estimated that were roughly 1.8 billion street vendors in the world as of 2012, according to journalist Robert Neuwirth, the author of The Power of the Informal Economy.

"1.8 billion people around the world work in the economy that is unregulated and informal.

That's a huge number, and what does that mean? Well, it means if it were united in a single political system, one country, call it 'The United Street Sellers Republic,' the U.S.S.R., or 'Bazaaristan,' it would be worth 10 trillion dollars every year, and that would make it the second largest economy in the world, after the United States," he said in a 2012 TED Talk.