At the Government session chaired by Prime Minister Olzhas Bektenov, the issues of improving online sales in Kazakhstan were considered. The Minister of Trade and Integration Arman Shakkaliyev reported on the situation in the e-commerce market.

According to him, e-commerce is one of the most dynamically developing segments of the world economy. Today 30 per cent of the world's population make purchases online. In 2024, the total volume of the global market is estimated at about $6.3 trillion with the share of e-commerce at 20%. Further growth to $8.3 trillion is predicted in the coming years.

The structure of trade is changing rapidly. New trends are emerging. Among them: the introduction of artificial intelligence technologies, personalisation, the growth of trade through social networks and live streaming.

In the first 11 months of 2024, the volume of e-commerce in Kazakhstan totalled about 3.2 trillion tenge. It is expected to exceed the target to 15 per cent of retail trade volume (with a plan of 14.5 per cent).

The Minister added that Kazakhstan has a high potential for development, which is due to the wide penetration of cashless payments, the development of retail fintech, the availability of the Internet, a high proportion of young people, more than 8 million people.

Today, the Ministry of Commerce's task is to increase the share of e-commerce in total retail trade to 18.5% by 2029, or up to 9.3 trillion tenge in physical terms, almost 3 times.

To ensure further development, in April 2024, the E-commerce Development Plan until 2027 was adopted. Within the framework of the approved document, work is being done to improve legislation on online sales, launch e-commerce training courses in all regions of the country, and introduce financial measures of state support for entrepreneurs.

In addition, jointly with the National Chamber of Entrepreneurs, e-commerce training centres for entrepreneurs have been launched throughout the country. In 2024, the Rules for the provision of state support measures to e-commerce entities in the form of subsidised interest rates and guarantees were adopted.

For example, a new Kazakhstani marketplace Teez with its own infrastructure was launched in Kazakhstan with an area of 100 thousand square metres, 10 thousand jobs will be created in the near future, investments amounted to $50 million.

This year marketplaces Ozon and Wildberries are planning to build three full-field centres in Astana and Almaty with a total area of 291 thousand sq.m., investments will amount to 101.3 billion tenge. To stimulate cross-border e-commerce, an Intergovernmental Agreement on Partnership in Digital Trade was signed in Bishkek at the 11th Summit of the Council of Heads of State of the TNA member states. Work is also underway to develop international documents in the field of e-commerce within the framework of the WTO, EAEU, SCO and CA.

The national operator Kazpost JSC is implementing a pilot project in the field of foreign e-commerce to accelerate customs procedures and maintain objective statistics on cross-border trade.

Given the high rates of penetration of electronic commerce, its impact on the structure of retail trade as a whole has been analysed. For this purpose, a working group was formed last October with the inclusion of key market players, business associations and government agencies.

More than 400,000 retail companies were included in the sample. The data is presented in a generalised form, reflecting key trends and structural changes in the sales sector. As a result of the analysis, a typical portrait of an online and offline retailer was formed. And by all indicators, electronic sales were more efficient, companies are larger, more sustainable, sales and the number of employees is greater.

In Kazakhstan, active online companies account for 12.6% of all retailers. At the same time they created more than 300 thousand jobs, showed higher productivity, provided 60% of tax revenues in the retail sales sector. That is, online trading companies paid more taxes (360 billion vs. 240 billion), although their market share is much smaller (505 thousand vs. 73 thousand companies). Additionally, domestic marketplaces paid taxes in the amount of 135.2 billion tenge.

It was also analysed how companies change after the transition from offline to online sales. The analysis of 10 thousand random cases showed that in 1.5 years after entering the marketplace, the average sales volume of companies increases 4.8 times, tax payments - 13.5 times. The geography of sales also expands. This shows that online companies not only generate more revenue, but also create jobs, become more transparent and work ‘in the white’.

Arman Shakkaliyev noted that domestic E-Commerce is an accelerator for SMEs and a tool to increase employment, especially at the regional level. And further development of domestic e-commerce opens additional opportunities for the growth of the entire trade industry of the republic.

As a result of measures taken to develop cross-border trade, the volume of purchases on foreign platforms in 2023 totalled $1.3 billion, which is about 20% of total online sales in the country. Over the past 3 years, the growth has been 90%. New foreign marketplaces are appearing in the market and competition is increasing.

However, along with this, the number of consumer complaints about foreign marketplaces has increased. The head of the Ministry of Trade said that these problems arise due to the fact that foreign marketplaces and sellers are outside the jurisdiction of Kazakhstan. As a result, risks are created for consumers, who can not fully protect their rights.

Due to the significant distances between countries, it often becomes impossible to fulfil the requirements for the return or exchange of goods. In addition, goods purchased through foreign online shops do not undergo certification procedures, which jeopardises the safety and quality of products. In this regard, the Minister of Trade and Integration proposes to regulate these issues by law.

"Based on international experience and taking into account the current realities, we propose the introduction of mandatory conditions for the work of foreign platforms, not lower than for domestic ones, in terms of compliance with requirements for the safety of goods, anti-counterfeiting, consumer protection, storage and protection of personal data. Tax and customs transparency. According to the EU experience, it is proposed to introduce an electronic platform for registration of foreign Internet platforms and shops," Arman Shakkaliyev said at the Government session.

In order to support and develop domestic e-commerce, it is proposed to simplify customs clearance procedures and optimise non-fiscal duties on imports, introduce special tax regimes for e-commerce entities, optimise tax administration, as well as the development of warehousing and logistics infrastructure.

The proposed approaches and measures are planned to be implemented through the improvement of legislation in the field of electronic commerce, including tax legislation, consumer protection, information security. The Minister added that the development of the online sales sector in Kazakhstan is not only an important factor of economic growth, but also a necessary step for further digital transformation of trade and integration of the country into the global digital economy.

#Digitalization #Economy #Government session #Ministry of Trade and Integration