E-Commerce Volume Expected to Hit Kazakhstan’s 2025 Targets

NUR-SULTAN –  The share of e-commerce in total retail during the lockdown has approached Kazakhstan’s 2025 target of 10 percent, said Minister of Trade and Integration Bakhyt Sultanov during a July 28 government meeting.

Photo credit: static.zakon.kz.

According to Kazpost data, the e-commerce volume reached 435 billion tenge (US$1.05 billion), 9.4 percent of total retail, in the first half of 2020. The ministry forecasted that the volume will double by the end of 2020. In 2019, Kazakhstan’s wildest dream of increasing e-commerce volume was only $5.25 billion by 2025.

In 2019, e-commerce, the activity of buying or selling products online, comprised only 2.9 percent of the total retail and totaled approximately $422.9 million.

The quarantine drastically increased online trading and payment transactions. As of May 1, the Kazakh National Bank observed more than a 2.5 times increase of non-cash transactions to approximately 7.5 trillion tenge (US$18.14 billion).

The Kazakh Ministry of Trade and Integration revised the targets of e-commerce share in the 2021-2025 State Trade Development Program. Kazakhstan’s updated goal is to increase e-commerce volume to 1.9 trillion tenge (US$4.59 billion), which should comprise 13 percent share of the total retail by 2022 and 15 percent by 2025.

“We will continue to work to maintain the pace of e-commerce development through aggressive policies,” said Sultanov.

The next steps in growing the e-commerce share should come after Kazakhstan overcomes internal barriers such as the high share of the shadow economy, high commissions for interbank payments, and late delivery of goods, he said.

The ministry plans to support all parties engaged in e-commerce to “create a full-fledged architecture” of it. The ministry, for example, will provide regulatory and technical support for Kazakh entrepreneurs.

“Today we are working on country partnerships to bring our Kazakh companies onto international online trading platforms such as Alibaba, Amazon, Yandex, Ozon, Shopify. For example, 50 companies were selected to provide access to the Alibaba platform as a Gold Supplier. This premium status provides access to a global audience, the possibility of comprehensive promotion within the marketplace,” he said.

Another sub-goal for e-commerce in Kazakhstan is to create more than 300,000 new jobs by 2025. Kazakh Prime Minister Askar Mamin instructed the Ministry of Trade and Integration, the Ministry of Labor and Social Protection, Atameken National Chamber of Entrepreneurs, and large online marketplaces, to develop a special program to train entrepreneurs, especially the youth, in effective online trading.

“We are faced with the task of developing effective measures that will simplify e-commerce procedures, provide access to financing, increase confidence in the conclusion of transactions via the internet, and also counter cybercrime,” Mamin said.

Mamin entrusted the ministry to develop the draft law by the end of the year.

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