Kazakhstan seeks to boost number of e-commerce buyers to 15 million by 2025

NUR-SULTAN – Kazakh officials say e-commerce friendly legislation and increased agricultural sales have the potential to push e-commerce sales in Kazakhstan to 15 million buyers annually by 2025.

E-commerce sales in Kazakhstan increased 1.5 times in 2018 over 2017 to $707.4 million and the number of buyers doubled over 2017 to 2.3 million people.

The market currently offers approximately 1,700 online shops and nearly 20 electronic marketplaces that allow approximately one million small- and medium-sized businesses to sell products.

Government officials recently announced they hope to increase e-commerce sales to $5.25 billion by 2025 and push to 25 percent e-commerce’s percentage of total retail by the same year. They also hope to increase the number of people employed in the e-commerce sector from the current 33,002 to 314,000 by 2025.

“Electronic commerce is a global trend, one of the most rapidly developing areas in the service economy,” said Kazakh Prime Minister Askar Mamin at a May 14 government meeting.  Mamin added e-commerce should be regarded as a driver of economic growth.

To reach these goals, officials recently adopted a law protecting consumer rights when making online purchases. The law provides the same protections that apply to over-the-counter purchases. The government has also approved tax incentives until 2023, is providing reimbursements up to $316 for businesses to purchase equipment to accept online orders and has simplified the export declaration process.

Sixty-eight percent of Kazakhstan’s e-commerce market are products, mostly construction material and household appliances, and 32 percent are services, mostly flight and train tickets, tickets for cultural events and communal services payment. Kazakh Minister of National Economy Ruslan Dalenov noted that agriculture is also a sector where e-commerce sales can be increased.

“E-commerce does not have territorial boundaries. Therefore, it is about endless opportunities for our local agriculture producers to enter new markets and search for new clients. Online trade is a great opportunity to boost trade in rural areas,” said Dalenov.

Food products and agriculture goods currently account for 4 percent of total e-commerce with annual revenues of $40.5 million.

An increase in e-commerce sales could also help grow Kazakhstan’s transit sector. Kazakhstan serves as a strategic transit hub between East and West. In 2018, 670 million parcels were delivered from China to Europe and nearly 7 percent of those passed through Kazakhstan.

The target is 864 million parcels and $3.3 billion in transit revenue by 2025.

“Given the existing infrastructure of Western China – Western Europe corridor, a big area is opening for truck carriers along with freight and logistics. The multiplicative effect of e-commerce on the economy can ensure an annual contribution to GDP at 1.1 percent and increase the traffic from China to Europe via Kazakhstan and in return direction from 2,000 to 21,000 trucks per day by 2025,” said Mamin.