Electronic commerce is still developing in the Kyrgyz Republic. Internet access outside of major cities is unreliable but improving quickly. ATM/debit cards are extremely common in Bishkek and ATMs are a common sight in most medium-sized villages. Electronic payment of salaries is becoming more common, and some local banks have developed applications for mobile phones. Nevertheless, the Kyrgyz Republic is primarily a cash economy.
According to the State committee of informational technologies and communication in 2019 the number of internet users in The Kyrgyz Republic reached 2.5 million people (40.3% of the total population). This low level of internet penetration is likely due to a variety of demographic, geographic, and economic factors. The Kyrgyz Republic has an extremely low amount of internet traffic and online engagement compared to neighboring countries Kazakhstan and Uzbekistan; Mobile operators registered around 9.4 million users while the population is 6.2 million people. Mobile broadband continues to rapidly expand, but only 40%of the population use fixed broadband, according to the survey.
Current Market Trends
Recently, eCommerce has experienced rapid growth in the Kyrgyz Republic. In recent years, significant advances have occurred locally in mobile payment systems and app-based commercial platforms. There are more online shops now than several years ago, and the variety of commercial services available via the internet has expanded significantly.
Despite recent technological developments, however, the majority of Kyrgyzstanis continue to prefer traditional forms of purchasing goods and ordering services. A key challenge to development of robust eCommerce in the Kyrgyz Republic is the perception that goods purchased online may be of lesser quality, and that services can be better negotiated in person. Consumers may also be concerned about poor customer service and no clear recourse in the event of a negative eCommerce experience. According to the State committee of informational technologies and communication only 5% of population are involved in e-commerce. 15%of population has internet banking and 40% of population has a bank account.
There is ample opportunity for improvement and development of eCommerce in the Kyrgyz Republic. High speed, affordable internet access and usage –- particularly in mobile broadband — are expanding throughout the Kyrgyz Republic, albeit primarily in urban areas. Rural areas, where 60% of the total populace reside, have limited internet access and low levels of internet use. The Kyrgyz Republic does have a steadily developing IT sector, and the undeveloped eCommerce sector may present investment opportunities for tech entrepreneurs.
Popular eCommerce Sites
Local internet retailers are rapidly increasing in the Kyrgyz Republic, though overall penetration remains low. Popular domestic eCommerce sites include Svetofor.info and Lalafo.kg. Svetofor identifies itself as the most popular online commercial market in the Kyrgyz Republic, and offers a wide variety of retail goods. Lalafo is akin to an online trading site such as eBay or Craigslist. Additionally, websites that provide services are increasing in both number and use; websites such as Tez.kg or Namba.kg offer consumers a mobile and web-based interface to order taxis and food delivery services in Bishkek. Several online platforms offer taxi services similar to Uber, including Namba Taxi and Yandex Taxi. Chinese eCommerce websites such as taobao.com and alibaba.com are more popular than other international eCommerce platforms; many Kyrgyz companies retain Chinese-speaking staff to help locals make purchases through Chinese eCommerce websites.
The social media market in the Kyrgyz Republic is rapidly growing. Nowadays 80% of internet users actively engaged on social media platforms. Recent studies indicate a double increase in social media uSocial Mediasers in 2018, with this growth centered predominantly in urban areas. Facebook’s dominance of the social media market grew throughout 2019, from an estimated309% share in January to approximately 35.5% by the end of the year. YouTube, Twitter, and Russian social media network VKontakte together occupied slightly more than 33.3% of social media use as of June 2018.