E-commerce in Kazakhstan

E-commerce

E-commerce market

Kazakhstan’s e-commerce sector is still underdeveloped. However, it has been showing significant growth in the last few years. The sector is estimated to grow at a rate of 25% per year for at least the next three years. According to official statistics, the e-commerce market reached US$ 322.4 million in 2017, which represented 1.2% of the total retail turnover and a 36.2% increase from the previous year. In the first five months of 2018, e-commerce turnover reached US$ 304.6 million, 2.9% of the total retail turnover. The number of customers has also increased (5% from 2017 to 2018). However, less than 7% of the population shops online and the number of in-market online merchants is small. Since the beginning of 2018, 110 new e-commerce retailers have been registered in the country. Kazakhstan currently counts 1,658 online stores, employing 71,600 workers. The government has been investing in the segment, improving legislation and postal services, as well as exempting e-commerce companies from taxes. The most popular e-commerce category is fashion, followed by cosmetics and food. The main obstacles for e-commerce development in Kazakhstan are rudimentary systems of online payment and delivery, and a low level of consumer confidence in e-shopping. For that reason, the most popular payment methods are cash-on-delivery and bank transfer, with 60% of all payments being made using cash, while cards account for 20% of them. Cross-border e-commerce is extremely popular. The leader among foreign online shops in Kazakhstan is eBay. In 2017, 39% of the goods were purchased from the United States, 12% from Europe and 11% from Russia. Only 29% of purchases were made from local shops. Some of the most popular e-commerce websites in the country include OLX.kz, Kolesa.kz, and Wildberries.kz.