Instagram shops take over the apparel market in Iran

Iran has been riddled with international economic sanctions for more than 40 years, and restrictions have only become more widespread by the day. It has turned the country into the biggest untapped market in the Middle East populated with more than 80 million consumers who are greedy to explore international commercial brands that are out of reach. 

Most Iranians only get to experience global franchise brands such as Starbucks and McDonalds, or high street retail labels during their travels or through media.

In the absence of global corporations, the Iranian market is saturated with consumer goods from China, the only country daring to defy U.S. trading sanctions, and Turkey which is the most prominent origin of smuggled goods to Iran.

Products available in the Iranian markets are mostly smuggled or made in Iran. Majid Nami, vice president of the Textile and Clothing Production and Export Union, estimates: "40 to 50 per cent of the clothes in the market are smuggled goods that are imported as stock or travel goods."

He added: "The size of Iran's clothing market is 9 billion dollars, of which 5.5 billion dollars are produced domestically."

Following the failure of the JCPOA deal in 2015 most of the imported brands were forced to withdraw from Iran; subsequently, market share for the Iranian ones which was below 10 per cent increased substantially.

Nami explains: “Due to the ban on official imports Iranian brands were able to introduce themselves to shopping centres that didn’t have a headroom for them previously.” 

Despite this relative advantage, the lack of competition has resulted in an abundance of low-quality, pricey items. Moreover, officials put a damper on the marketability of Iranian brands by imposing strict standards that dictate modesty and reduce their popularity.

Mohsen Gorji, Director General of Clothing Industries at the Ministry of Industry and Trade has announced: “Suppliers and retailers of indecent and immodest clothes will be fined and confronted. The framework for designs that correspond to our cultural norms has been determined and producers of clothes and other cultural goods who conform to rules of modesty get tax exemption.”

Iranians have come up with a plan to tackle the issue and stand fashionably tall on top of their style game. 

There is a new method of shopping as consumers weary of a limited choice of low-quality expensive clothes resort to new retailers mushrooming all over Instagram. 

Instagram shops allow customers to visit any online shopping platform and send the link of the chosen product to the moderator. The moderator then takes the order and the customer transfers the money to the moderator’s bank account in Iran. The moderator proceeds to place an order using his international payment card. A contact in the country of origin -where the online shop is located- will be in charge of collecting orders and forwarding them to Iran. Goods are later sourced and shipped to each customer. The process usually takes between 1 to 3 months depending on the country of origin.

Iranians cannot make online purchases on international platforms independently, as Iran does not have any connection to the international banking system and foreign retailers don’t ship to Iran due to sanctions. Instagram shops facilitate international payments and delivery. In return, they charge a percentage of the value of a product for profit.

Turkey is a favourite origin of retail goods due to cheaper currency rates, shorter delivery time, and abundance of products that appeal to the taste of Iranians. However, Instagram shops accept orders from countries in the EU, especially the UK and Italy. 

Many Iranians find it cheaper and more efficient to buy clothes, toiletries, homeware, and household appliances from online platforms in Turkey during the sale season than from a local Bazaar.

Trendyol.com in Turkey which is equivalent to Alibaba is an all-time favourite among the Iranians. Online platforms of clothing brands such as Zara, Mango, and make-up brands such as Sephora are particularly celebrated in Iran.

Shirazi, the former head of the clothing union claims: “One-sixth of the clothing market is in the hands of Instagram shops, which no one has supervision over them and don’t pay tax”

Majid Eftekhari, a member of the board of directors of the Iran Textile and Apparel Production and Export Union, said: "Last year, we witnessed the onslaught of clothing smuggling from Bangladesh and China, and now we are becoming a Turkish colony in the clothing industry. Wide networks of online sales of Turkish clothing also operate in the country”.

Freedom from market colonialism will require Iranian apparel brands to revolutionize their production process, the government to put ideology aside, and the customers to regain faith in homemade brands which doesn’t seem to happen any time soon.