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household appliances and equipment, accounting for 65% of local e-commerce sales in 2020, according to our estimates. Retailers in this category started to invest in digital channels long before Covid-19 hit, entering lockdown more prepared than other sectors. Apparel and accessories are the 2nd-largest category, grabbing 16% of the local e-commerce market, followed by home and furnishing materials with an 8% share in 2020.
Food delivery earned a special niche in Georgia’s digital buying ecosystem as Georgian retailers used food delivery channels to deliver grocery, personal care and pharmaceutical products during the pandemic. This is contrary to developed markets, where retailers have their own in-house delivery services. We estimate the food delivery sector turnover at GEL 167mn in 2020 up 3x from 2019, with grocery and personal care products accounting for 20% of the total. Whether retailers will stick with this third-party delivery scheme or invest in their own delivery channel depends on different factors, including availability of financial and human resources.
We estimate cross-border e-commerce spending at GEL 459mn in Georgia in 2020, having grown at an average annual rate of 40.3% over 2018-20. The four largest foreign online platforms – Amazon, eBay, Taobao and Aliexpress – command 2/3 of total cross-border purchases but face increasing competition from small market players in apparel, accessory, beauty and cosmetic retail sectors. International online retailers attract customers with their low prices, large product variety and superior user experience, offsetting the disadvantages of their long delivery time and additional shipping charges.
9.2 Major corporate news 9.2.1 Oil & gas corporate news
Georgian investor confirms works on Kulevi refinery begin next year
Georgian company Phasis Oil, set up by entrepreneur Gia Shavdia with the support of the Multiplex investment company founded by local businessman Levan Kacharava, confirmed the start of the construction works for an oil refinery in Kulevi next year.
The construction of the refinery, with a capacity of 4 million tonnes per year, was supposed to start in 2021. The refinery is expected to have 98% depth of processing and produce Euro 5 and 6 gasoline and diesel and thus reduce Georgia's import needs for oil products by 15%-20%, according to S&P. Shavdia told BMG that the construction of the plant was initially scheduled to begin in 2021, but the pandemic delayed the developments.
"We are at the design stage and we have already moved to the licensing stage. We lost a year because of the COVID-19 pandemic, but there is nothing we can do about it. Therefore, we will not be able to commission the refinery in 2024, but in 2025. We have already written to the National Agency for State Property and the government to defer the investment commitment. They are aware of our plans," Shavdia said.
The creation of a free economic zone in Kulevi and the construction of a urea plant on the site was originally planned by Socar Georgia Investments. For the implementation of this project, on September 12, 2012, according to the decree of the government of Georgia, the conditions for the establishment of "Kulevi FIZ" were set in place, but the State Oil Company of Azerbaijan did not implement the project and in 2016 Phasis Oil took over the agreement with the Georgian state.
According to Gia Shavdia, Phasis Oil plans to invest $1.2bn in the construction of an oil refinery.
The 599,970 square metres of land in Kulevi for GEL1 was sold to Phasis Oil
62 GEORGIA Country Report December 2021 www.intellinews.com