“Kazakhstan B2C E-Commerce Market 2019” is the title of a new publication released by Germany-based secondary market research company yStats.com. The report tells of expected growth in online retail sales, driven by higher Internet penetration rate and wider adoption of the online shopping practices. Challenges to E-Commerce acceleration are also highlighted, which the government’s projects and actions could help to overcome.
Kazakhstan B2C E-Commerce market develops
Kazakhstan is the largest and the most advanced B2C E-Commerce market in the emerging region of Central Asia and Caucasus, with a double-digit sales growth rate, as revealed in the report by yStats.com. Still, B2C E-Commerce in 2018 accounted for less than 2.0% of total retail sales in the country. However, according to another source, online retail sales has reached less than 3.0% in the same year. Among the growth drivers are the increasing Internet penetration, reaching over three-quarters of the population in 2017, and a growing interest in online shopping, especially among the young population.
Barriers to online shopping exist
One of the challenges to the B2C E-Commerce market in Kazakhstan is the underdeveloped logistics infrastructure. Slow Delivery was the main problem that digital buyers in Kazakhstan faced when shopping online in 2017. To deal with this issue, Kazpost is working on opening new fulfillment centers to support online merchants in their delivery service needs. Another barrier is the dominance of cash on delivery as the payment method, yStats.com reports. Close to half of online shoppers used this method to pay for purchases made over the Internet in 2017.
Local players are expanding Kazakhstan’s market
Kaspi.kz -the local online store owned by Kazakhstan’s Kaspi Bank, was the largest online shop in the country in terms of revenue in 2017. A unique service of immediate online credit for the purchase is offered by the platform due to a special position in the banking structure. Moreover, the largest Internet holding company, Chocofamily, also based in Kazakhstan, saw rapid growth of its online shopping platforms. The online travel sector is led by Aviata.kz and Air Astana. Foreign-based stores, such as Lamoda and Wildberries, were also in the top 10 ranking, according to yStats.com’s findings.