Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
The eCommerce market in Armenia continues to develop, supported by the expanding use of the internet, expanding use of credit cards, and rising household incomes. Armenians increasingly prefer to shop online for a variety of goods, including household appliances, consumer electronics, apparel, cosmetics, toys, meals, and groceries. The B2B segment is also a strong driver of eCommerce activity, particularly given the continuous expansion of Armenia’s high-tech and finance and banking sectors. Despite the growth in eCommerce among some consumer segments, it remains a novelty for many demographics, due to unfamiliarity, a lack of disposable income, poor delivery infrastructure, or other reasons.
Armenian consumers utilize a variety of platforms, both local and international, for making purchases online. Amazon and eBay are widely used by local consumers. Orders from the United States are frequently fulfilled with the assistance of shipping consolidators. Competing sites from other countries are gaining in popularity. A variety of homegrown platforms serve local consumers, including those for electronic payment systems, grocery delivery, ride hailing, and purchases of a wide range of consumer goods.
According to official statistics from the Central Bank of Armenia (CBA), the volume of eCommerce trade has shown consistent double-digit percentage growth year to year. Orders from abroad have shown strong growth. Statistics from the CBA released in 2017 show that nearly 70 percent of transactions processed through Armenia’s own national card payment system were concentrated in department store purchases, fashion products, intangible digital goods, and consumer electronics. In 2021, the volume of payments by card transactions in Armenia increased by 32 percent.
Visa and Mastercard are the most commonly used cards for completing international transactions. Despite growth in the use of payment cards, cash upon delivery remains the predominant method of payment for eCommerce transactions fulfilled locally. Apple Pay became available in Armenia in 2022, serviced by a number of banks.
Internet penetration in Armenia has continued to increase, facilitating the growth of eCommerce. Access to the internet is included in the vast majority of the more than 3 million active mobile phone subscriptions, and broadband speeds are becoming the norm.
Legal & Regulatory
Armenian legislation regulates key aspects of eCommerce in the country. Relevant authorities include the Civil Code, Law on Trade and Services, Law on Consumer Rights Protection, and Law on Implementation of Cashier Machines. In recognition of the growing importance of eCommerce in the economy, the government is formulating new legislation focused specifically on eCommerce.
Armenia has developed legislation that facilitates the collection of value-added tax for international online transactions registered in Armenia that entered into effect June 1, 2022. The legislation offers a favorable environment for eServices providers in other jurisdictions to self-declare and pay value-added tax on services provided to the Armenian consumers. The government has provided no indication that it is considering going beyond value-added tax collection and levying digital services taxes. Armenia is participating in relevant discussions under the convened under the auspices of the Organization for Economic Cooperation & Development.
As is the case with traditional sales channels, weak enforcement of intellectual property rights in Armenia creates impediments to the further development of eCommerce.
The use of email for business communication is becoming increasingly common, particularly in Yerevan, although the telephone remains the primary method of business communication. Most companies have their own website. Some businesses, including leading supermarkets, have begun offering online ordering and local delivery fulfillment. Parcel handling companies, freight consolidators, and the postal service are becoming more adept at getting orders to customers, particularly for purchases from abroad. The continuation of duty-free limits for personal purchases of goods from abroad helps sustain and develop this ecosystem, in addition to allowing Armenian consumers the ability to enjoy a greater selection of goods and choice of vendors. Online banking is becoming increasingly popular, and Armenians are becoming accustomed to this method of receiving financial services. The digital marketing landscape continues to grow and the number of marketing agencies in Armenia has been increasing. The increased adoption and use of electronic payment systems, whether through traditional cards, mobile money, or digital platforms, is helping drive the growth and increased effectiveness of eCommerce.