E-commerce can be boosted through reforms

/By AzerNews/

By Aynur Karimova

Electronic commerce, which continues to grow in Azerbaijan, will develop steadily if there applied the Russian concept of abolishing fees for exporting goods cheaper than 200 euros, Nariman Agayev believes.

The Chairman of the Sustainable Development Research Center told local press that putting items for sale on global web sites such as e-bay and aliexpress is not popular in Azerbaijan due to the high shipping cost.

"The post tariff for items weighing less than only one kilogram is 7 euros. And this is just the usual items, not art objects, paintings and jewelry. Therefore, to offer the products for sale is not profitable for our online stores," the expert said.

E-commerce, defined as any commercial transaction, business or otherwise, that takes place online, includes the buying and selling of goods and services as well as the collection of bill payments and the transferring of money.

The State Statistics Committee of Azerbaijan reported that in the first half of 2015, Azerbaijan’s volume of e-commerce increased by 1.9 times and amounted to 6 million manats ($5.72 million).

Most of the goods – 93 percent – were purchased in online facilities in commercial networks owned by legal bodies and individuals purchased the remaining 7 percent.

Last year, the volume of the e-commerce market in Azerbaijan increased by 2.4 times and amounted to 6.4 million manats ($6.1 million).

E-Commerce OFFERS several advantages over ordinary, paper-based commerce, one of which is convenience. Why pay the bills at the bank or post office when one could pay them online from own home? Why go to a shop to buy a product when you could order it online and have it delivered to your door, especially when that product is sold from abroad?

Another advantage of e-commerce is transparency. E-commerce transactions are always recorded. The merchant selling the product/service keeps a record, the bank has one, and so does the credit card company. In a sense, it "cleans" the economy because under-the-table transactions cannot be processed.

Also, e-commerce provides access to products and services from all over the world.

Experts at the American Chamber of Commerce in Azerbaijan believe that the expansion of e-commerce in Azerbaijan is a matter of when, if one is to consider that it took the U.S. about eight years to fully embrace e-commerce and turn it into a multi-billion dollar industry.

Today, several foreign online platforms are engaged in the sale of products directly in Azerbaijan. Some of them, like Asos.com, send goods after the online payment by credit cards are processed. Others like Myphone.ae and from.ae do not require an online payment, and payments can be made in Baku at the reception point.

Today, Azerbaijan is only just finishing the first phase of e-commerce implementation. Major pioneer merchants are connecting and offering at least some products and services online.

In the second phase, an increase in the number of complex e-commerce solutions will likely be made available. These will include services such as online ticketing for airlines and trains, online food ordering, and better online shops.

In the third phase, these complex services will become expected by society. Consumers will start demanding that a company offers its product or service online. In turn, merchants will expand their offerings and improve already existing services.

In the fourth and final phase, e-commerce will form a sizeable percentage of the country’s economy. Consumers will ENGAGE in transactions with each other and businesses will do so as well. When this happens, e-Commerce will truly become mainstream.

One can predict that e-commerce will become one of the most important trends in the Azerbaijani economy in the next few years.