Statista research gives the following data on Uzbekistan: The country’s e-commerce generated $1.39 billion revenue in 2021 and constituted 90.2% of total digital revenues in the country. Digital media, e-services and e-health accounted for the remaining 9.8%. The level of digital expenditures in Uzbekistan is low amounting to 3.91% of consumer spending in 2021 versus average 7.34% in Asia. E-commerce revenues are expected to have an average annual growth of 18.7% by 2025. People mostly bought electronics (31%) and fashion products (28.6%) online, followed by furniture (17.2%), beauty, health, and care (7.1%), and toys, hobby and DIY goods (6.5%).
- The government is investing in telecommunications infrastructure. As of January 2023, the number of internet users was estimated at 31 million - 29.5 million mobile internet users and 4.4 million fixed broadband internet users. The throughput of international data transmission channels was expanded to 3,200 Gbit/s. Speedtest.net ranks Uzbekistan 112th out of 143 countries in mobile internet, with 20.33 Mbps download and 10.29 Mbps upload speed. It ranks 87th out of 182 countries in fixed broadband internet with 51.61 Mbps download and 52.18 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 in e-commerce, Tashkent University of Information Technologies opened an e-commerce department in 2018. In 2020-2022 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 communications network built throughout the country from 118,000 kilometers (73,322 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 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 announced it plans to invest $2.5 billion into the development of the digital infrastructure in 2021-2022. In his report to the Parliament on December 14, 2022, the Minister for Development of Information Technologies and Communications informed that the length of the fiber-optic communication network was increased to 170,000 kilometers (105,633 miles), the level of mobile network coverage reached 99% and of broadband mobile Internet coverage - 98%.
- Launch of the National Online Trading Platform https://www.unisavdo.uz/ by Ozbekiston Pochtasi (the state postal service company) in March 2021: Entrepreneurs are 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. On August 9, 2023, the administration of Namangan region announced that Alibaba would open its regional center in Namangan.
Launch of the “Open Digital Ecosystem” complex of information systems for e-commerce starting from July 1, 2022, with the Center for Digital Transformation under the Ministry of Investments and Foreign Trade being responsible for its operation. The Ecosystem will have an escrow account to ensure fulfillment of contractual obligations of trading parties. The income tax rate of operators of e-commerce platforms integrated into the Digital Ecosystem is reduced by 50% until January 1, 2024.
Potential in-country partners include the Ministry of Digital Technologies (https://mitc.uz/en/management/index- former Ministry for Development of Information Technologies and Communications), the Ministry of Investments, Industry and Trade (https://miit.uz/en),the Association of E-Commerce of Uzbekistan, the Chamber of Commerce and Industry of Uzbekistan (https://chamber.uz/en/index) and the American Chamber of Commerce in Uzbekistan (https://www.amcham.uz/).
Legal & Regulatory environment towards ecommerce
- E-commerce is regulated by the Law “On Electronic Commerce” issued on April 29, 2004, and updated in 2015 and 2022. 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 of Digital Technologies is specially authorized by Cabinet of Ministers to oversee e-commerce.
A Digital Ecosystem Country Assessment of Uzbekistan was prepared and published with support of USAID in January 2022. According to the most recent publicly available sources from 2019, local mobile network operators (MNOs) deliver 2G, 3G, and 4G/LTE services, with almost full coverage of the population by 2G (98%) and 3G (75%) networks, and 4G coverage concentrated in larger cities and towns, reaching around 43% of Uzbekistan’s population. However, this information is likely outdated. UCELL, the largest local MNO, reported that its 4G network was available in 80% of Uzbekistan’s populated points and that coverage would expand to 95% by the end of 2022.
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. The social networks were unblocked in August 2022 and January 2023.
Uzbekistan agreed to implement UNESCO Recommendation on the Ethics of Artificial Intelligence, IMF paper on Elements of Effective Policies for Crypto Assets, and Global Data Security Initiative.
Uzum, a digital ecosystem that was created in 2022 and includes services for online shopping (marketplace), fintech solutions, payments, and food delivery, is the most visited local e-commerce website with 2.36 million visits a month. In July 2023, Uzum Market delivered more than 1 million orders across Uzbekistan. It announced the construction of a logistics center with an area of about 150,000 square meters, which will become one of the largest in Uzbekistan. The marketplace plans to expand its network of pickup points to 400 throughout the country by the end of 2023, while the range of products on Uzum Market will exceed 800,000 items. In June 2023Uzum bought the most popular e-payment service Click. Another popular e-payment service Payme was acquired by TBC digital bank in 2023.
AliExpress dominates cross-border e-commerce in Uzbekistan. The largest Russian online retailer Wildberries entered Uzbekistan market in February 2022. Glotr provides an opportunity for companies to open their websites on its platform and sell goods online. Companies also actively use social networks (Facebook, Telegram and others) to promote their products and services. OLX is popular for individual-to-individual trades. 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 created a national online trading platform Unisavdo and plans to turn it into a massive e-marketplace by 2025. Tradeuz.com platform was launched in 2022 to help local SMEs to find potential partners abroad for export of products from Uzbekistan.
The international E-commerce Day conference was held in 2018 and 2019. The annual ICT Week (organized each September) includes an E-commerce section.