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bne April 2021 Companies & Markets I 19
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E-commerce rising stars of the Western Balkans
Valentina Dimitrievska in Skopje, Clare Nuttall in Glasgow
With their small populations, relatively low incomes and large informal economies, the six countries of the Western Balkans aren’t the best environment to nurture e-commerce champions. The barriers to cross-border trade and existence of two distinct language families – South Slavic and Albanian – have also inhibited the emergence of pan-regional e-commerce platforms.
Despite these factors, there are a growing number of e-commerce platforms in the region that have achieved success in their local markets and in some cases in neighbouring countries as well. Not only that, but Serbia’s Delta Holding, hitherto mainly focused on real estate and retail, has announced plans to create an “Amazon of the Western Balkans”, Ananas, with investments of €100mn over the next five years.
A spokesperson for Ananas says the region “has been deprived of quality e-commerce platforms and services for too long”. “All of us are witnessing the expansion and potential of the online retail market which became even more evident since the beginning of the pandemic. All major global brands are starting or investing in the development of online trade. The potential of the online market in this region is significant and we are determined to use it in the proper way, by creating an amazing platform that will change the shopping experience of Western Balkan consumers."
A World Bank report, focused on Albania but with data on the whole region, also highlights the significant potential for online markets in the Western Balkans region, because of both the limited existing penetration of e-commerce and fast growth rates.
Data from the 2020 Balkan Business Barometer published by the Sarajevo-based Regional Cooperation Council shows that 83% of the population across the region are internet users,
up one point since the 2018 survey. The keenest e-shoppers, according to the survey, are Montenegrins, though only 26% of respondents said they shopped online; the lowest level was among Albanian respondents at 15%. Overall, respondents were most likely to use the internet for entertainment – as high
as 79% of respondents in Kosovo – and least likely to use it to access government services.
Among those who are active internet users, the share of e-shoppers is reasonably high. For example, citing data from North Macedonia’s statistics office, Grouper’s co-founder Nina Angelovska said in an interview with bne IntelliNews that 40.1% of individuals with internet access in North Macedonia had made online orders and purchases in the 12 months to early 2020. That is twice as many people as in 2017.
Pandemic shopping habits
The pandemic gave a push to e-commerce development in the Western Balkans as elsewhere as non-essential bricks and mortar shops were closed. The World Bank survey carried out on social media (therefore targeting the internet-savvy segments of the population) confirms that the coronavirus
“There are a growing number of e-commerce platforms in the region that have achieved success in their local markets and in some cases in neighbouring countries as well”
(COVID-19) pandemic has accelerated the use of online shopping; 62% of respondents said they had increased the use of online shopping during the pandemic, of which 85% said they will continue to shop online more frequently once the pandemic is overcome.
This wasn’t always instant, though, as in some cases online purchasing patterns changed rather than increased, leaving e-commerce companies catching up.
Milan Nicetin, chief marketing officer of Serbia’s LimundoGrad, tells bne IntelliNews: “When COVID-19 arrived in Serbia, we noticed a sudden drop in sales for about 25-30%
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