E-commerce will ensure revenue growth for logistics companies to 1.3 trillion tenge and create 314 thousand new jobs by 2025 | FinReview
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29 October 2019

E-commerce will ensure revenue growth for logistics companies to 1.3 trillion tenge and create 314 thousand new jobs by 2025

Favorable territorial location of Kazakhstan creates favorable conditions for the development of trade and economic relations. In the near five-year perspective, Kazakhstan can increase the number of transit parcels sent from China to Europe by 22 times to 864 million units, which will increase the income of logistics companies and create new jobs. In turn, the volume of electronic commerce of domestic enterprises is expected to increase to 2 trillion tenge.

The idea of ​​digital transformation during the period of global technological development has become a strategic priority for the economic growth of countries. The expanding role of information technology in the work of the private and public sectors has opened up new business opportunities. Among them are the simplification of access to public services, the acceleration of the exchange of information, the expansion of the market, the growth of trade, the creation of new digital products, etc.

According to forecasts by eMarketer experts, global e-commerce will reach $ 3.5 trillion in 2019. At the same time, China will become the largest trading market with a turnover of $ 1.9 trillion. In second place is the United States with sales of $ 586.9 billion. The leading markets of Western Europe – Great Britain, Germany and France – together will close online trading in the amount of $ 293.2 billion.

Trade and economic cooperation with the leading world markets of China and Western Europe has become more accessible for Kazakhstan through participation in the “Belt and Road” initiative. Moreover, the possibilities of our country are increasing due to the conjugation of the initiative and the Eurasian Economic Union in the framework of the formation of the Greater Eurasian Partnership. The key advantage of Kazakhstan in the development of partnerships is the created financial infrastructure – the Astana International Financial Centre, which is in line with the best international practices in demand in the global business community. For domestic entrepreneurs, the AIFC provides an opportunity to participate in the Belt and Road initiative, which will allow them to enter global markets and attract investments through the Astana International Exchange (AIX).

The regulatory regime established by the AIFC Financial Services Authority is designed to support innovative approaches that allow fintech startups to be launched from electronic commerce and financial technology to game development and cybersecurity. This approach allows participants to launch fintech projects without the threat of violation of applicable law. Today, the Kazakhstani startup market is headed by the following areas: mobile applications (16.7%), digital automation (15.6%), e-commerce (15.6%), digital platforms (12.8%) and online education (5 ,9%).

The growing global demand for electronic commerce creates the potential for the development of transit areas. At the end of 2018, 670 million parcels were delivered from China to Europe, of which about 39.2 million were sent in transit through Kazakhstan. In the near five-year perspective, an increase in the number of parcels is expected to be 6 times, that is, up to 4 billion units, with about 864 million parcels passing through Kazakhstan. According to this forecast, the income of Kazakhstani companies will increase from 132 billion tenge to 1.3 trillion tenge.

According to the UN E-Commerce Index, in 2018 Kazakhstan ranked 53th out of 151 countries in the world. As noted in the report, Kazakhstan has high potential for the development of e-commerce, which will accelerate the diversification of the economy by stimulating non-resource sectors of the economy. Domestic enterprises are already showing positive dynamics in this direction – the revenue of the TOP-10 largest commercial Internet sites for the year increased by an average of 51%, reaching a total of 266.8 billion tenge.

The growth of e-commerce is inextricably linked to the development of logistics infrastructure. So, in Kazakhstan, work is underway to create logistics hubs and sorting centers that will reduce delivery times from 15 to 6 days to 1 day on specific routes by express delivery. Also, in order to support entrepreneurs, from January 1, 2018, owners of online stores are exempted from paying corporate and individual income taxes for a period of five years.

It is expected that the adopted standards will increase the attractiveness of the electronic form of commerce and will accelerate the growth rate of sales. According to experts, by 2025 the volume of e-commerce can reach 2 trillion tenge. In turn, an increase in e-commerce will create new jobs. By the end of 2018, 43 thousand jobs have already been created, and by 2025 this figure is planned to be increased to 314 thousand.