Learn the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail.
Assessment of Current Buyer Behavior in Market
E‐commerce is gaining a foothold as internet penetration increases year-by-year. The COVID-19 pandemic and consequential movement restrictions boosted Georgia’s e-commerce market by more than threefold in 2020. According to Galt & Taggart Research, the most popular categories for Georgian e-commerce is electronics and household appliances and equipment, and these categories account for 65 percent of local e-commerce sales in 2020. Food delivery earned a special niche in Georgia’s digital buying ecosystem as Georgian retailers used food delivery channels to deliver groceries, personal care products, and pharmaceutical products during the pandemic.
According to Statista’s Country Reports, the revenue in Georgia’s eCommerce market amounted to $151.2 million in 2020. The total FinTech transaction value was forecast to grow by 25.7 percent from 2020 to 2025.
Credit card penetration is also increasing rapidly. As of June 2022, there were 6.3 million debit cards and 0.8 million credit cards issued across Georgia’s population of 3.7 million people. Cardholders can pay public utilities electronically and purchase goods. Electronic utilities payment is widespread through a growing network of electronic payment kiosks, particularly in larger cities. Electronic transactions over the last four years have increased significantly. For example, in June 2022, Georgian residents carried out over 51 million transactions by payment cards worth $1.4 billion, which is respectively 21 percent and 17 percent increase over the previous year.
There are no major buying holidays for e-commerce specifically, except Black Friday, since most apparel and consumer goods shopping is done from U.S. sources, such as Amazon.com. Other popular e-commerce sites are Alibaba, Aliexpress, Ebay, etc. Preferred payment methods include credit/debit card payments or PayPal, the latter being available in Georgia since 2013.
Georgia is harmonizing the electronic flow of information among key players in the logistics, shipping, and transport industries by launching the Trade Facilitation System (TFS). The TFS enables traders, customs brokers, freight forwarders, shipping lines, and other players in international trade to submit information through a single entry point.
Local eCommerce Sales Rules & Regulations
Georgia’s Ministry of Economy and Sustainable Development (MoESD) is currently developing a draft law on e-Commerce. The adoption of the EU e-Commerce Directive is part of the Georgian government’s commitment under its AA with the EU. The Law on e-Commerce will regulate the rights and obligations of intermediary service providers in the e-Commerce process, as well as protect consumers by making information services more transparent and standardized. The draft has passed committee hearings in the parliament and its adoption is planned in 2022.
Georgian companies that are active in the eCommerce field set up the Georgia E-Commerce Association in 2020. The association has identified underdeveloped infrastructure and logistical support as the main obstacle, and is working with association members and other interested companies to address challenges.
Local eCommerce Business Service Provider Ecosystem
Digital marketing firms are underdeveloped in Georgia, while last mile logistics firms have seen a significant boost under the COVID-19 pandemic and related restrictions in personal movement. Seven commercial banks operating in Georgia have licenses for international payment systems via internet-acquiring sources and they successfully serve merchant outlets (including state services). Their electronic systems work with internationally recognized security technologies such as Verified by Visa and MasterCard Secure Code, which imply three levels of card authentication. Georgia’s recently established E-Commerce Association is working with international players and donors to promote an in-country event focused on eCommerce.