Leading economists, representatives of the Ministry of Trade, the National Chamber of Entrepreneurs "Atameken," and e-commerce and retail platforms of small and medium-sized businesses such as "Magnum Cash&Carry," Sulpak, Kaspi.kz, Flip.kz, Chocofood.kz, Clever.kz, Office Expert, Marwin.kz, Intertop, JMart, and others participated in the event.
During the discussion, participants noted that in recent years, Kazakhstan has shown impressive results in e-commerce, following global trends. Today, every eighth purchase (12.5%) is made online, and the volume of e-commerce doubles every two years. Considering the current growth rates, Kazakhstan will reach the global average within the next three years.
Since 2021, there has been active digitalization of retail, and similar dynamics are observed in other consumer services. QAZTECH's preliminary assessment shows a significant impact of consumer services driven by digitalization on the country's economy.
Three key aspects of the impact of digitalization on consumer services:
"At the macro level, we see significant positive changes that emphasize the importance of digital platforms for Kazakhstan's economic growth. In conditions of low population density and large distances, digital platforms are one of the few tools for the development of small businesses and can help Kazakhstan transition to a new non-resource growth model," noted Alexander Dauranov, chief analyst at QAZTECH.
"Digital platforms and e-commerce radically transform SMEs, opening new opportunities. It is estimated that this can lead to a 30-50% increase in revenue, cost reduction, and expansion of delivery geography. For Kazakhstani businesses, this represents a unique opportunity to overcome traditional limitations, expand both nationally and internationally. Such development will strengthen the positions of both macro- and microbusinesses," added Zhanna Syzdykova, representative of Clever.kz.
However, there are significant risks: the expansion of foreign online stores puts Kazakhstani SMEs at an unequal footing and threatens their development. Foreign online stores trade goods directly from other countries and pay fewer taxes on each sold item, not creating internal value for the economy. This threatens more than 1 million jobs.
During the discussion, roundtable participants shared their experience of working in marketplaces and expressed their opinions regarding the risks of developing domestic SMEs.
I. The need to establish clear requirements for foreign marketplaces. It was proposed to develop clear requirements for foreign marketplaces operating in Kazakhstan to ensure equal conditions for all market participants.
"We, as domestic players, are in a difficult situation because our digital economy market is not fully formed and clearly lags behind international standards.
On the one hand, if we open the market to large international players, it could seriously undermine our competitiveness. This is especially true for the threat from Chinese companies. I also note that regulatory changes are taking place in neighboring countries such as Russia and Kyrgyzstan, making the market more open. This creates a window of opportunity, but if we miss this moment, entrepreneurs may face serious consequences.
While it is important to understand that competition and market conditions are natural, there is no need to panic. However, in a nascent market, reforms are lagging behind changes. We are still facing a high share of the shadow economy, and organized companies that follow the law and pay taxes may find themselves at a disadvantage.
"I see potential social issues that may arise. It's important to consider that the development of e-commerce depends not only on large players and the quality of service but also on the active participation of small and medium-sized businesses that invest in this sector," noted Erlan Zhailaubai, Deputy Chairman of the Union of Trade Networks of the Republic of Kazakhstan.
II. The threat of dumping due to subsidized products from China. Participants noted that large foreign players engage in dumping and possibly receive subsidies from their government, and digital platforms significantly reduce commission fees. This creates a risk of displacing Kazakhstani platforms and manufacturers from the domestic market, which requires careful analysis and the development of measures to protect local participants.
"We are facing the problem of dumping and possible subsidization of foreign goods. When individuals purchase products on their marketplaces, it's necessary to consider the possibility of introducing protective tariffs to safeguard domestic producers. Similar challenges are also faced by the UK and the EU," emphasized a market participant.
"We mainly purchase products from local Kazakhstani manufacturers and some from Russia. For our products, we require suppliers to provide all necessary certifications and comply with established standards. Additionally, we pay all taxes according to our turnover. Meanwhile, companies engaged in dumping often evade tax payments, do not undergo certification, and do not comply with regulatory requirements. This creates unfair competition and puts us at a disadvantage, threatening our competitiveness and even the existence of the business. We operate exclusively in online trade, and such a situation can lead to serious financial difficulties," noted Yegor Yalbachev, General Director of the furniture store High Tech Way.
III. The issue of the lack of mandatory certification and control over counterfeit products on marketplaces was discussed. There is a need to tighten requirements for sellers on marketplaces to provide certification data for products. Participants noted that the difference in requirements between various platforms creates conditions for the import of counterfeits, undermining market trust.
"The situation with confirming the quality and authenticity of products on marketplaces leaves much to be desired. We see non-certified and often counterfeit and fake goods under well-known brands such as LG and Samsung being sold on platforms, which seriously undermines consumer trust and creates unequal competition for sellers of original and official products who comply with the law, pay taxes, and create jobs. The issue of certification is especially relevant for products requiring specific safety standards. There are gaps in legislation that need to be promptly addressed and resolved," noted Dmitriy Provkin, General Director of Sulpak, a chain of specialized electronics stores in Kazakhstan.
IV. The shortage of modern warehouse facilities was discussed. The necessity of creating modern warehouse facilities with developed transport infrastructure for ensuring efficient logistics was emphasized.
"In order to support local players and marketplaces, it is important to develop warehouse infrastructure, which remains insufficient in Kazakhstan. Some foreign companies are already receiving state benefits and actively developing. It is necessary to create conditions for subsidizing and allocating land for warehouses located near transport hubs, which will significantly support small and medium-sized businesses," emphasized Ruslan Mukashev, head of Office Expert.
V. The inequality in the enforcement of norms for goods imported for personal use, including phytosanitary and sanitary standards, was discussed. It was noted that official product suppliers are required to comply with phytosanitary and sanitary standards, whereas goods imported for personal use do not undergo similar checks. This creates arbitration opportunities in economic activities and increased risks for public safety.
"For the official import of some pet products, food, and supplements, multiple inspections and obtaining phytosanitary and veterinary permits are necessary. At the same time, such goods are delivered on Chinese marketplaces without any restrictions. This affects the cost and delivery times and creates unequal conditions for local suppliers," noted Yuliya Sidorenko, operations director of the online store Flip.kz.
VI. The impact of financial technologies and installment plans on Online business. The importance of installment plans and the role of fintech in the development of online business were discussed. An example of successful cooperation with the marketplace Kaspi was provided, which offered advantages in delivery and client authorization. Participants emphasized the need for further development of fintech as a foundation for the growth of online business.
"We successfully cooperated with a marketplace that provided us with additional large vehicles for delivery. It was also important to establish client authorization to minimize risks and simplify logistics. This experience showed how crucial fintech solutions are for the development of online business," shared Yegor Yalbachev, General Director of the furniture store High Tech Way.
Roundtable participants believe that it is necessary to place Kazakhstani small and medium-sized businesses on an equal footing with foreign trading platforms that sell goods in Kazakhstan without paying taxes and creating jobs. Taking advantage of duty-free imports and other benefits, foreign companies gain an unfair competitive advantage, which harms domestic entrepreneurs.
Kazakhstan's technology business needs protection and support to ensure equal opportunities for its development and prevent the displacement of local companies from the market.
Further measures and priority areas of activity, to effectively address the voiced issues, QazTech sets the following goals:
During the discussion, participants noted that in recent years, Kazakhstan has shown impressive results in e-commerce, following global trends. Today, every eighth purchase (12.5%) is made online, and the volume of e-commerce doubles every two years. Considering the current growth rates, Kazakhstan will reach the global average within the next three years.
Since 2021, there has been active digitalization of retail, and similar dynamics are observed in other consumer services. QAZTECH's preliminary assessment shows a significant impact of consumer services driven by digitalization on the country's economy.
Three key aspects of the impact of digitalization on consumer services:
- Contribution to economic growth: Consumer services have become the leader in contributing to economic growth, surpassing the oil sector, construction, and metallurgy combined. Over the past three years, Kazakhstan's real GDP has increased by 11 trillion tenge (in 2022 prices), of which 43%, or 4.8 trillion tenge, were provided by consumer services.
- Job creation: Consumer services have become the main source of new jobs. Over the past three years, the number of employed people increased by 350 thousand, of which almost 200 thousand jobs were created in the consumer services sector. Another 170 thousand jobs appeared in the public sectors.
- Reduction of the shadow economy: Significant improvements have been achieved in reducing the shadow economy over the past three years, where previously there was no significant progress for two decades. According to the Bureau of National Statistics, the share of the unobserved sector in consumer services decreased from 54% in 2017 to 22% in 2023. This led to an overall reduction of the shadow economy from 29% to 18%. For the first time, the consumer services sector, which always had a high level of the shadow economy, reached average levels across all sectors of GDP.
"At the macro level, we see significant positive changes that emphasize the importance of digital platforms for Kazakhstan's economic growth. In conditions of low population density and large distances, digital platforms are one of the few tools for the development of small businesses and can help Kazakhstan transition to a new non-resource growth model," noted Alexander Dauranov, chief analyst at QAZTECH.
"Digital platforms and e-commerce radically transform SMEs, opening new opportunities. It is estimated that this can lead to a 30-50% increase in revenue, cost reduction, and expansion of delivery geography. For Kazakhstani businesses, this represents a unique opportunity to overcome traditional limitations, expand both nationally and internationally. Such development will strengthen the positions of both macro- and microbusinesses," added Zhanna Syzdykova, representative of Clever.kz.
However, there are significant risks: the expansion of foreign online stores puts Kazakhstani SMEs at an unequal footing and threatens their development. Foreign online stores trade goods directly from other countries and pay fewer taxes on each sold item, not creating internal value for the economy. This threatens more than 1 million jobs.
During the discussion, roundtable participants shared their experience of working in marketplaces and expressed their opinions regarding the risks of developing domestic SMEs.
I. The need to establish clear requirements for foreign marketplaces. It was proposed to develop clear requirements for foreign marketplaces operating in Kazakhstan to ensure equal conditions for all market participants.
"We, as domestic players, are in a difficult situation because our digital economy market is not fully formed and clearly lags behind international standards.
On the one hand, if we open the market to large international players, it could seriously undermine our competitiveness. This is especially true for the threat from Chinese companies. I also note that regulatory changes are taking place in neighboring countries such as Russia and Kyrgyzstan, making the market more open. This creates a window of opportunity, but if we miss this moment, entrepreneurs may face serious consequences.
While it is important to understand that competition and market conditions are natural, there is no need to panic. However, in a nascent market, reforms are lagging behind changes. We are still facing a high share of the shadow economy, and organized companies that follow the law and pay taxes may find themselves at a disadvantage.
"I see potential social issues that may arise. It's important to consider that the development of e-commerce depends not only on large players and the quality of service but also on the active participation of small and medium-sized businesses that invest in this sector," noted Erlan Zhailaubai, Deputy Chairman of the Union of Trade Networks of the Republic of Kazakhstan.
II. The threat of dumping due to subsidized products from China. Participants noted that large foreign players engage in dumping and possibly receive subsidies from their government, and digital platforms significantly reduce commission fees. This creates a risk of displacing Kazakhstani platforms and manufacturers from the domestic market, which requires careful analysis and the development of measures to protect local participants.
"We are facing the problem of dumping and possible subsidization of foreign goods. When individuals purchase products on their marketplaces, it's necessary to consider the possibility of introducing protective tariffs to safeguard domestic producers. Similar challenges are also faced by the UK and the EU," emphasized a market participant.
"We mainly purchase products from local Kazakhstani manufacturers and some from Russia. For our products, we require suppliers to provide all necessary certifications and comply with established standards. Additionally, we pay all taxes according to our turnover. Meanwhile, companies engaged in dumping often evade tax payments, do not undergo certification, and do not comply with regulatory requirements. This creates unfair competition and puts us at a disadvantage, threatening our competitiveness and even the existence of the business. We operate exclusively in online trade, and such a situation can lead to serious financial difficulties," noted Yegor Yalbachev, General Director of the furniture store High Tech Way.
III. The issue of the lack of mandatory certification and control over counterfeit products on marketplaces was discussed. There is a need to tighten requirements for sellers on marketplaces to provide certification data for products. Participants noted that the difference in requirements between various platforms creates conditions for the import of counterfeits, undermining market trust.
"The situation with confirming the quality and authenticity of products on marketplaces leaves much to be desired. We see non-certified and often counterfeit and fake goods under well-known brands such as LG and Samsung being sold on platforms, which seriously undermines consumer trust and creates unequal competition for sellers of original and official products who comply with the law, pay taxes, and create jobs. The issue of certification is especially relevant for products requiring specific safety standards. There are gaps in legislation that need to be promptly addressed and resolved," noted Dmitriy Provkin, General Director of Sulpak, a chain of specialized electronics stores in Kazakhstan.
IV. The shortage of modern warehouse facilities was discussed. The necessity of creating modern warehouse facilities with developed transport infrastructure for ensuring efficient logistics was emphasized.
"In order to support local players and marketplaces, it is important to develop warehouse infrastructure, which remains insufficient in Kazakhstan. Some foreign companies are already receiving state benefits and actively developing. It is necessary to create conditions for subsidizing and allocating land for warehouses located near transport hubs, which will significantly support small and medium-sized businesses," emphasized Ruslan Mukashev, head of Office Expert.
V. The inequality in the enforcement of norms for goods imported for personal use, including phytosanitary and sanitary standards, was discussed. It was noted that official product suppliers are required to comply with phytosanitary and sanitary standards, whereas goods imported for personal use do not undergo similar checks. This creates arbitration opportunities in economic activities and increased risks for public safety.
"For the official import of some pet products, food, and supplements, multiple inspections and obtaining phytosanitary and veterinary permits are necessary. At the same time, such goods are delivered on Chinese marketplaces without any restrictions. This affects the cost and delivery times and creates unequal conditions for local suppliers," noted Yuliya Sidorenko, operations director of the online store Flip.kz.
VI. The impact of financial technologies and installment plans on Online business. The importance of installment plans and the role of fintech in the development of online business were discussed. An example of successful cooperation with the marketplace Kaspi was provided, which offered advantages in delivery and client authorization. Participants emphasized the need for further development of fintech as a foundation for the growth of online business.
"We successfully cooperated with a marketplace that provided us with additional large vehicles for delivery. It was also important to establish client authorization to minimize risks and simplify logistics. This experience showed how crucial fintech solutions are for the development of online business," shared Yegor Yalbachev, General Director of the furniture store High Tech Way.
Roundtable participants believe that it is necessary to place Kazakhstani small and medium-sized businesses on an equal footing with foreign trading platforms that sell goods in Kazakhstan without paying taxes and creating jobs. Taking advantage of duty-free imports and other benefits, foreign companies gain an unfair competitive advantage, which harms domestic entrepreneurs.
Kazakhstan's technology business needs protection and support to ensure equal opportunities for its development and prevent the displacement of local companies from the market.
Further measures and priority areas of activity, to effectively address the voiced issues, QazTech sets the following goals:
- Improving regulation of foreign marketplaces and combating dumping:
- Development of standards and unification of requirements, combating counterfeiting:
- Creation and development of logistics infrastructure for Kazakhstani suppliers:
- Creation and development of logistics infrastructure for Kazakhstani suppliers:
- Supporting the development of financial technologies: