Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
Assessment of Current Buyer Behavior in Market
The e-commerce industry is in the early stages of development in Uzbekistan. As of April 2021, the number of internet users is estimated at 22.6 million – 19.4 million mobile internet users and 3.2 million fixed broadband internet users - in a country with 34 million people. The throughput of international data transmission channels is 1200.0 Gbit/s. The country has been investing in its telecommunications infrastructure but ranks only 118th out of 138 countries in mobile internet, with 18.39 Mbps download and 9.47 Mbps upload speed. It ranks 90th out of 174 countries in fixed broadband internet with 44.36 Mbps download and 44.51 Mbps upload speed. To facilitate e-commerce development, the government charges only a 2% tax on online revenue, compared to a 4% rate for traditional businesses. Uzbekistan’s laws permit online sales of drugs and medical devices and permits electronic checks and invoices as legal confirmation of payment for goods and services. The Central Bank of Uzbekistan signed a 2019 memorandum of understanding with Visa to develop infrastructure for digital payments, and many banks offer payment software and services to e-commerce websites to facilitate processing of online payments. To increase the number of IT professionals, Tashkent University of Information Technologies opened an e-commerce department in 2018. In 2020 and 2021 the government took several important steps to boost e-commerce growth:
- Adoption of the Digital Uzbekistan-2030 Strategy in October 2020: The government plans to increase the length of the fiber-optic communication network built throughout the country from the current 41,000 kilometers (25,476 miles) to 250,000 kilometers (155,343 miles) by 2030; grow the high-speed internet coverage level from the current 67% to 100% by 2030; expand broadband mobile network coverage from the current 78% to 100% by 2022; and increase the annual quotas for admission to higher and secondary special education institutions in the field of information technology from the current 7,000 to 20,000 by 2030. Uzbekistan has announced it plans to invest $2.5 billion into the development of the digital infrastructure in 2021-2022.
- Launch of the National Online Trading Platform https://unisavdo.uz/ by Ozbekiston Pochtasi (the state postal service company) in March 2021: Entrepreneurs will be able to put their products up for auction through the system; Ozbekiston Pochtasi will deliver purchased goods to buyer’s address and, thus, assume responsibility as a guarantor between seller and buyer; the state company plans to increase the number of logistics centers from 4 in 2021 to 30 in 2025 and increase the number of items posted on the Platform from 10,000 in 2021 to 1,500,000 in 2025; the number of local and international online stores for cooperation should rise from 10 in 2021 to 125 in 2025.
- The Uzbekistan Export Promotion Agency established cooperation with Chinese e-commerce firm Alibaba in October 2020, creating a “Made in Uzbekistan” section on the Alibaba.com platform, where products of selected domestic companies will be exhibited; the government plans to provide financial support for the registration of more than 300 local companies on the Alibaba.com platform.
Potential in-country partners include the Ministry for Development of Information Technologies and Communications (https://mitc.uz/en), the Association of E-Commerce of Uzbekistan, the Chamber of Commerce and Industry of Uzbekistan (http://www.chamber.uz/en) and the American Chamber of Commerce (www.amcham.uz). Humans.uz (https://humans.uz/en/), Uzbek Industrial and Construction Bank (https://sqb.uz/en/) and UzCard (https://uzcard.uz/en) are each developing e-commerce solutions.
Local eCommerce Sales Rules & Regulations
E-commerce is regulated by the Law “On Electronic Commerce” issued on April 29, 2004 and updated in 2015. Under the law, electronic transactions should provide customers with the following information about the seller:
- the full name of the legal entity, with an indication of its organizational and legal form, or the surname, name and patronymic of an individual;
- postal and e-mail address, and information about company’s state registration;
- the availability of a license in cases stipulated by law;
- the procedure for concluding an agreement in e-commerce;
- the possibility and procedure for making changes and additions to the agreement in e-commerce when agreeing on its terms;
- the procedure for sending and withdrawing an acceptance;
- terms of delivery and payment for goods (including works, services), as well as offered prices (including applicable tariffs) for them;
- indications of the conditions included in the agreement by reference to an electronic document posted in a publicly available information resource.
- a record of all electronic documents and messages should be retained.
The Cabinet of Ministers is responsible for implementation of state policy and programs in e-commerce and coordinates the activities of state bodies in this field. The Ministry for Development of Information Technologies and Communications is specially authorized by Cabinet of Ministers to oversee e-commerce.
Online access channels remain underdeveloped. While high-speed service is spreading, most users have access only at 3G connection speeds. Rural areas may be out of reach of even cellular networks and are not wired for landline access. In January 2021, amendments were made to the Law on Personal Data, obliging foreign companies to store personal data of Uzbekistani citizens in the territory of Uzbekistan. The amendments went into effect in April 2021, and communications regulator UzKomNazorat restricted access and issued warnings to international social media firms not in compliance with the law.
Local eCommerce Business Service Provider Ecosystem
The most popular online platform is https://glotr.uz/ , which allows local companies to create websites to sell products and services. Individual-to-individual transactions are more popular on https://www.olx.uz/. Several banks offer entrepreneurs and companies payment tools to set up e-commerce services on their websites and applications, which enable their customers to pay for products and services online. The State postal service company is testing its newly created national online trading platform and plans to turn it into a massive e-marketplace by 2025. IT Park Uzbekistan, which was established in July 2019, includes 398 resident companies offering different types of digital services. The IT Park administration (email@example.com) can help clients connect to service providers.
The annual international E-commerce Day conference was held in 2018 and 2019.The annual ICT Week (organized each September) includes an E-commerce section.