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Emil Mammadov: "New support tools are under consideration to expand the sales opportunities of SMBs" 10.07.23

One of the agencies supporting the expansion of the sales opportunities of micro and small business entities in Azerbaijan is the Small and Medium Business Development Agency (KOBİA). Our questions about KOBİA's sales support mechanisms were addressed by Emil Mammadov, head of the SMB market access support department of the Agency's Business Services Department.

- How does the Small and Medium Business Development Agency support the access of micro and small business entities to trade networks?

- Firstly, I would like to mention that since 2018, KOBİA has been conducting surveys in various directions, including market access for entrepreneurs, with the purpose of studying the challenges of entrepreneurs, their needs for business establishment and development. According to the results of the conducted surveys, as well as the applications received by the Agency, we observed that micro and small entrepreneurs face certain challenges in accessing trade networks and need support in this area.

Based on these challenges, the "Procedure for supporting the expansion of the sale of products produced by micro and small businesses in retail chains", approved by the Decree of the President of the Republic of Azerbaijan dated December 1, 2021, was ratified. Under this rule, micro and small businesses are supported to access trade networks. Moreover, support events are organized by KOBİA. Pursuant to the rule, KOBİA rents space in the stores of various trade networks, installs a single stand to create a point of sale, and the products of micro and small business entities seeking to benefit from this mechanism are placed there for promotion and sales.

As part of this support, the size of the sales space provided to the entrepreneur within the commercial facility is 50 cm, and the period of product placement in the sales area is 3 months. Given the number of applicants and consumers' interest in the products placed at the sales points, the period of use of the sales area can be extended by another 3 months. At the same time, the sales area available to entrepreneurs can be expanded to 50 cm. A micro-entrepreneur pays only 20% of the rent for the available sales space, while a small-entrepreneur pays 50%.

The products supported for sale can be both food and non-food items, according to the commercial network.

- How many business entities have become beneficiaries of this support provided by KOBİA so far?

- Within the scope of this support, from January 2022, the Agency has been accepting electronic applications from micro and small businesses. So far, 117 applications have been received from entrepreneurs seeking to benefit from this support. Currently, KOBİA has set up six permanent sales points, including one in "Sharg Bazaar" shopping center and five in large shopping chains. Favourable conditions have been created in favour of 25 business entities to sell their products at the mentioned points of sale. Negotiations with commercial networks to boost sales locations are underway. Small and medium enterprises (SMBs) can find information about sales points and the application procedure for the support on the SMB website www.smb.gov.az.

- The agency also supports the engagement of micro, small and medium enterprises in various specialized exhibitions. What are the requirements for SMBs to take part in exhibitions? How often does an entrepreneur have an access for the support provided by KOBİA?

- The Agency supports micro, small and medium enterprises to take part in exhibitions and fairs free of charge in order to facilitate their access to domestic and international markets, boost sales opportunities and promote their products. This support mechanism aims to expand the sales opportunities of SMBs by helping them to introduce their products and services to a wider audience, and establish new business ties. SMB entities interested in this mechanism are required to propose a fully marketable product or service.

During a calendar year, we can fund each SMB entity to take part in one exhibition or one fair. Nevertheless, when holding a trade fair, it is also possible to provide repeated support to the same SMB entity, considering the number of requests for participation and other factors. The involvement of some 1300 SMBs in 50 exhibitions and trade fairs held in Azerbaijan and abroad has been provided free of charge to support the access of SMBs to the markets.

- The electronic platform www.kobmarket.az is also available to support the sale of entrepreneurs' products. How does this platform work?

- One of KOBİA's sales support tools is www.kobmarket.az platform. The portal aims to boost the sales opportunities of SMBs, support the development of online trade in the country, facilitate the digitization process of SMBs and consumers, and increase cashless payments. The portal operates in the form of an internet store allowing sellers, i.e. SMBs, to advertise and sell their products and services without having to spend their own financial resources to open a personal online store. Users are encouraged to use a single payment system and delivery services on the portal.

- What other measures does the Agency implement to support the sale of entrepreneurs' products?

- Along with support mechanisms for SMBs` access to commercial networks, participation in exhibitions and fairs, and online sales ("kobmarket.az"), various trainings are held and consulting services are provided. Therefore, given the growth of online trade in recent years, trainings are being carried out especially on the management of pages on social networks. In addition, consulting services are offered on a regular basis in the areas of branding, appropriate packaging and labelling to encourage the competitiveness of entrepreneurs' products.

It is of crucial importance for an entrepreneur to know the market conditions in order to develop a new product and service. The Agency supports entrepreneurs in performing internal market research in this area. Given the significance of starting a business and expanding ongoing activities, 21 internal market studies have been conducted at the request of entrepreneurs, and 26 on the initiative of Agency. Reports on the internal market research conducted by the Agency are available on the website of KOBİA (www.smb.gov.az). The state covers 80% of the cost of each internal market research conducted at the request of a micro-entrepreneur and 50% of the cost of the research carried out at the request of a small business entity. Medium business entities are encouraged to benefit from free training and seminars, information support as part of this support mechanism. The maximum amount of support is up to 20 thousand manats.

- What new measures are in the pipeline to secure entrepreneurs' access to commercial networks?

- "Procedure for supporting the expansion of the sale of products produced by micro and small businesses in retail chains" stipulates to provide support to entrepreneurs in several directions. Currently, work is underway to implement these support tools. Therefore, the procedure envisages KOBİA to pay 50% (up to one thousand manats) of the fees and service fees paid for official documents received by the entrepreneur as part of the support for the organization of commercial business at the points of sale. However, for the purpose of amplifying the sales opportunities of SMBs, measures are being taken to further enhance the existing support tools, and new support tools are under consideration, given the experience of advanced countries.

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