Kazakhstan people spent 144.6 billion tenge on online purchases | FinReview
23 October 2019

Kazakhstan people spent 144.6 billion tenge on online purchases

The volume of electronic commerce over the past three years has grown by almost 2 times. Positive dynamics continues in 2019 – according to experts, the volume amounted to more than 300 billion tenge in September, and by 2025 it can reach to 1 trillion tenge. The multiplicative effect of e-commerce on the economy will make it possible to forecast an annual contribution to GDP of 1.1%.

The economic downturn in the global economy has accelerated the process of transition to digitalization. Changes in business value, adjustment of technological and managerial processes, the active introduction of digital technologies and a changing approach to human resource management have become the reasons for the transformation of the economy. As a result, global digitalization ensured an average annual growth of the e-commerce market by more than 11%, and according to the forecasts of international experts, by 2023, sales will grow to $ 2.8 trillion.

The development of electronic commerce presents enormous potential for economic growth. Firstly, it provides an unlimited increase in turnover. Secondly, it provides access to the market of any country. Thirdly, it provides the development of transit potential.

Over the past five years, Kazakhstan has seen an increase in e-commerce by an average of 26%, while since 2015, the average annual growth has accelerated to 30%. In gross value, the volume of transactions in 2018 reached 259.5 billion tenge. Including retail – 144.6 billion tenge, wholesale – 114.9 billion tenge. The share of electronic commerce in the total retail trade amounted to 1.4%. According to the forecasts of the Ministry of National Economy, in the near five-year perspective, the volume of electronic retail trade will grow to 2 trillion tenge.

The Kazakhstan market is represented by over 1,700 independent online stores and about 20 electronic trading floors, on which more than 1 million small and medium-sized businesses operate. The total number of buyers of electronic goods and services is about 2.3 million people.

The structure of the e-commerce market consists of 68% of the trade in goods and 32% of services. Building materials, household appliances, cosmetics, clothes and shoes are in high demand. Among the services are the sale of air and train tickets, payment for cultural events and utilities.

E-commerce, as a way of applying modern information technologies and the Internet, is becoming an important strategic direction in the development of trading operations. For Kazakhstan, its development is especially relevant during its membership in the World Trade Organization, the Eurasian Economic Union and the “Belt and Road” initiative. In this regard, the Government adopted the State Digital Kazakhstan Program, which defines the following target indicators:

  • the share of electronic commerce in total retail trade in 2019 is 1.7%, in 2020 – 2%, in 2022 – 2.6%;
  • an increase in the number of online orders in retail trade (by 2016) in 2019 – 95%, in 2020 – 144%, in 2022 – 281%;
  • the growth of cashless payments through digital technologies (by 2019) in 2020 – 18%, in 2022 – 35%.

One of the key factors determining the development of electronic commerce is the population’s access to information and communication technologies and the Internet. At the end of 2018, the share of Internet users was 81.3%. The key event of the year was the start of the construction of fiber-optic communication lines of Kazakhtelecom JSC under a project aimed at providing broadband access to rural settlements. Within two years, it is planned to build more than 15 thousand km of fiber-optic communication lines and connect almost 2.5 thousand state institutions in 828 settlements to the main channels.

According to the assessment of the United Nations International Telecommunication Union for the development of information and communication technologies, Kazakhstan occupies 52 positions out of 176 countries of the world.

The state of online trading is inextricably linked with the development of non-cash payment tools. According to the National Bank, as of September 1, 2019, 30.1 million payment cards are in circulation, holding 26.6 million people (compared with the same date in 2018, there is an increase of 39.6% and 49.5%, respectively). The most common are debit cards, their share is 78.6%, the share of credit cards is 18.0%.

The volume of transactions using payment cards in August 2019 amounted to 2.7 trillion tenge, an increase of 49.3% compared to 2018. The number of transactions also increased by 84.4% and reached 130.4 million attempts.