E-commerce is becoming an increasingly popular form of buying goods and services among the citizens of the Republic of Serbia. The number of internet users in the Republic of Serbia is undoubtedly increasing day by day. This is not surprising given the fact that owning a smartphone today is almost mandatory and that the former obstacles to its use, both financial and technical, are almost gone. As for the e-commerce and online sales, it used to be a novelty only a decade ago in Serbia. Various market research reports showed that less than 15 percent of the population purchased at least one product online in 2014. In 2021, approximately 70 percent of population purchased at least one product online. That figure increased, particularly due to previous social distancing measures, lockdowns, and other pandemic-specific factors.  Serbia is still behind Western European countries, which have more than 90 percent of their population who bought at least one product per year online.  Serbia is the 81st largest market for e-commerce with a revenue of US$559 million in 2021, placing it ahead of Belarus and behind Tunisia.

The most-used payment methods are credit cards and PayPal. However, many consumers still prefer to use direct bank transfers for paying their online orders. In central and eastern Europe (including Serbia) e-shoppers prefer to pay cash on delivery.

Legal & Regulatory

The legal framework for e-commerce in Serbia has significantly improved. The Law on Electronic Documents, Electronic Identification, and Trusted Services in Electronic Business was adopted in November 2017. The Law introduced new trusted services (qualified electronic delivery, qualified electronic storage, qualified electronic seal) and upgrade of existing ones (cloud-based qualified electronic signature).

The amendments of the Law on Postal Service enacted in 2019, introduced new obligations for postal service providers to identify senders and receivers of packages. This aids the fight against illegal online traders and will help in engendering trust in e-commerce and lowering user resistance.

In 2019, the Ministry of Trade, Tourism and Telecommunications (MTTT) enacted a new Law on Trade and amendments to the Law on E-commerce, regulating online business-to-consumer sales in detail, precisely defining web-shops and e-commerce platforms, enabling innovative pricing models, identifying e-commerce business models (like drop-shipping), recognizing initiatives for raise of trust in e-commerce (e-commerce trust-mark programs), clearly defining legal obligations of e-traders, introducing more efficient instruments for market inspection and deal better with illegal electronic commerce and further and better facilitate electronic commerce in Serbia (such as through “mystery shoppers”), etc.

For more information, please visit non-profit resource Global Digital Policy Alert.

Consumer Behavior

At the very beginning of the pandemic, online sales skyrocketed. For 2020-2021, online food delivery has increased by approximately 200 percent, textiles by nearly 100 percent and computers and technical appliances by 50 percent, as reported by the Ministry of Commerce, Tourism, and Telecommunications.  The most popular products purchased online are clothing and sporting goods (52 percent); household goods (20 percent); electronic equipment (19 percent); computer equipment (19 percent); games and accessories (12 percent ); passenger arrivals – transport (8.5 percent ); holiday accommodation (7.9 percent); pharmaceutical products (6.6 percent); tickets for cultural events (4.7 percent); and books, newspapers, magazines (2 percent). Compared to the global online shopping preferences, where most online consumers buy books, movies, and video games (60 percent ), in Serbia most users buy clothing and sports products (52  percent).

The operations of the main Serbian carriers have grown tenfold, as reported by the Association for the Electronic Communications and Information Society of the Serbian Chamber of Commerce.

Revenue in the e-commerce market is projected to reach US$944.50 million in 2022 and expected to show an annual growth rate (CAGR 2022-2025) of 21.19 percent, resulting in a projected market volume of US$1.6 million by 2025.  Additional observations and expectations are: 

• Most revenue is generated in China.
• In the e-commerce market, the number of users is expected to amount to 4.2 million users by 2025.
• User penetration will be 56.6 percent in 2022 and is expected to hit 61.5 percent by 2025.
• The average revenue per user (ARPU) is expected to amount to US$242.50.

The biggest player in the Serbian e-commerce market is Gigatron.rs. The online store had a revenue of US$44 million in 2021.  It is followed by Tehnomanija.rs with US$40 million revenue and zara.com with US$20 million revenue.  Together the top three stores account for 20 percent of online revenue in Serbia. Market expansion in Serbia is expected to continue over the next few years, as indicated by the Statista Digital Market Outlook.

Cross-border E-commerce

In 2020, there were about 6 million international transactions. Of that, approximately 3.2 million transactions were made by credit cards in foreign online stores with sales of €2.6.  There were almost 162,000 transactions in other foreign currencies. For the first time in 2020, there were 14.1 million transactions realized within Serbia, with the number of domestic transactions (in dinars) being higher than foreign purchases.   

Intellectual Property Rights

While Serbia is not yet an EU member, it is a member of the World Intellectual Property Organization (WIPO) and has some effective enforcement instruments in the field of IPR protection.

The Serbian Customs Administration inspects packages arriving from foreign online retailers and holds IPR-infringing goods. To protect consumers from fake drugs sold over the internet, the government has prohibited the online sale of medications that are available only by prescription in Serbia. 

Following implementation of the EU General Data Protection Regulation (GDPR), Serbia enacted a new Data Protection Law (DP Law) in November 2018 with its’ applicability postponed for 21 August 2019. The law significantly expands the existing right of individuals to receive information about the processing of and access to their personal data.  However, a significant number of challenges remain, including regulation of video surveillance, biometric data processing, and human resources data processing, leaving significant room for arbitrary decisions by the Commissioner for Data Protection.

The law applies not only to the processing of data by Serbian controllers and processors, but also by the those based outside of Serbia whose processing activities relate to Serbian data subjects within Serbia. As a result, under the DP Law, entities that process personal data must have a data protection officer (DPO) to ensure compliance and to communicate with the Serbian Data Protection Authority (DPA) and data subjects on all data-protection matters.

The DPO provisions are not being fully implemented yet because of a lack of trained personnel, even in the Government of Serbia. Similar to the GDPR, the DPO obligation applies if:

• The processing is carried out by a public authority (with the exception of a court performing its judiciary authorizations); or
• The core activities of the controller/processor require the regular and systematic monitoring of data subjects on a large scale, or the large-scale processing of special categories of personal data (e.g., health data, trade union memberships, criminal convictions/offenses).

The DPO may be employed or engaged under a service contract, but in any case, must have expert knowledge of data privacy as well as the company’s processes. A group of companies may appoint a single DPO, provided that he/she is equally accessible by each company. Controllers and processors are required to ensure the DPO’s independence in the performance of his tasks.

Digital Marketing & Social Media

Total spending on marketing rose to €72,394,000 an increase of 28.8 percent.  Advertisers steadily invested more in digital and television advertising according to Adex. 

The major consumer “buying holidays” in Serbia are New Years’, Orthodox Christmas, and Orthodox Easter. Because of the start of traditional summer holidays period, the end of June and beginning of July are also popular among shoppers. 

In January 2022, the number of social media users in Serbia was 4.99 million, equivalent to 57.5 percent of the total population. Social media users in Serbia increased by 390 thousand (+8.5 percent) between 2021 and 2022 thanks to Facebook, Instagram, and YouTube, which are the leading social networks. Younger Facebook users use the platform as a source of information, while older users tend to use it for personal or other communication. Twitter is used mostly by politicians and journalists. LinkedIn is the fifth most popular social media platform, largely used by businesspeople.