In the first half of 2020, Kazpost indicates that e-commerce amounts to US$1.05 billion, which represents 9.4 percent of overall retail volumes. The Department predicted that by the end of 2020, the amount would double. The wildest ambition of Kazakhstan in 2019 was to boost the amount of e-commerce by just $5.25 billion by 2025. E-commerce, which constituted just 2.9 percent of the entire retail business and was about $422.9 million sold online in 2019.
Online trade and payment transactions were significantly improved in the quarantine. On 1 May, the Kazakh National Bank found that noncash transactions increased more than 2.5 times to around 7.5 trillion tenges (US$18.14 billion).
In the State Trade Development Program 2022-2025, the Kazakh Ministry of Commerce and Integration updated the e-commerce goals. The revised objective of Kazakhstan is to raise the amount of commerce to 1.9 trillion tenges (US$4.59 billion), to be 13 percent of the retail total by 2022 and 15 percent by 2025.
'The growth of eCommerce through vigorous policy will need to be maintained,' said Sultanov. He said that the next step in increasing the e-commerce share will be to resolve internal obstacles including the high percentage of the shadow economy, high interbank payment fees, and late distribution of products.
The ministry plans to assist e-commerce operators in creating a comprehensive architecture. For example, the Ministry will provide Kazakh entrepreneurs with regulatory and technological support.
'On the multinational online shopping sites such as Alibaba, Amazon, Yandex, Ozon, and Shopify, we are currently working on country collaborations to introduce our Kazakh firms. For instance, 50 companies were chosen as Gold Supplier to provide access to the Alibaba website. This premium ranking gives the prospect of full exposure on the market to the global audience,' he said.
Another under-objective for e-commerce is to generate over 300.000 new jobs in Kazakhstan by 2025. Kazakh Minister of State Askar Mamin has commissioned a special program to train undertakings, particularly youth, for efficient online trading, by instructing the Ministry of Trade and Integration, the Ministry of Labor and Social Protection, the Atameken National Chamber of Enterprise, and big Internet sites.
Kazakhstan have a mission of designing appropriate interventions, simplifying e-commerce processes, providing access to funding, building trust in transactions concluded on the Internet, and counter-cyber criminality. By the end of the year the Ministry draft Ecommernce legislation to help the segment grow.
In recent years, Internet penetration in Kazakhstan has expanded significantly. At the end of 2017, Kazakhstan had just over 14 million internet subscribers, with a rate of 76.4%. However, coverage is much more restricted in rural areas, which account for 45% of the population than in urban areas. A variety of public areas provide free Internet access. But most users at home use their mobile devices to have access to the internet. Kazakhstan has a well-established broadband mobile market with high rates of internet penetration relative to other countries of the former Soviet Union.
The Kazakhstanis can afford both mobile Internet and fixed broadband. Across Kazakhstan's multiethnic communities access is spread nearly equally. The contest between the Kazakh language and Russian however has an effect on access since there is much more material in Russian available than in Kazakh, especially in the alternative online coverage of news and discussions about social media. It's noticeable that the government will suspend telecom networks by adopting a variety of legislation, making it one of the reasons why the internet was ranked 'not free' by Freedom House in 2017 in Kazakhstan.
The e-commerce industry in Kazakhstan remains underdeveloped. In recent years, there has been substantial development. For at least the next three years, the sector is expected to expand at a rate of 25 percent a year. The e-commerce sector, which accounts for 1.2 percent of overall retail sales, increased by 36.2 percent compared to the previous one, according to official statistics to USD 322.4 million in 2017. E-company sales amounted to US$ 304.6 million in the first five months of 2018 or 2.9 percent of the overall sales. The number of customers also grew (5 percent from 2017 to 2018).
Though there are less than 7% of online shops and the number of online traders in the industry is limited. Since early 2018, there have been 110 new e-commerce retailers in the region. Today, Kazakhstan has 1,658 online shops and 71,600 employees. The government has invested in the segment, improved regulations, and postal facilities, and exempted businesses from taxation. Mode, cosmetics, and food are the most common e-commerce segment. Kazakhstan has rudimentary online payment and distribution networks and low customer trust in e-shopping is a major obstacle to the growth of e-commerce.
That's why cash on delivery and bank transfers are the most common mode of payment with 60% of all payments made with cash, while 20% with cards. Cross-border eCommerce is very common. Kazakhstan's leading international online store is eBay. In 2017, goods bought from the United States were 39 percent, from Europe is 12 percent and from Russia is 11 percent. Just 29% of the shopping in local shops was done. OLX.kz, Kolesa.kz, and Wildberries.kz is among the most popular e-commerce websites in the country.
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