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20 I Companies & Markets bne April 2021
during the first two months of the pandemic. People were frightened and didn't know what to expect, so they were mostly buying necessities like flour, sugar, oil, toilet paper... About two months later, things started to get better and we saw growth compared to the previous year.”
The restrictions on movement and fears of spreading the coronavirus have changed people's habits in North Macedonia, leading to increased online shopping and payment of bills online, according to Angelovska, who says the pandemic “really opened up an opportunity for e-commerce that has never existed before”. She cites a survey of 2,800 e-shoppers, of which 37% said they had increased their online shopping volume since the start of COVID-19.
Still, she adds, “Regarding Grouper, although it is an online e-commerce company, somehow the automatic thought is that we have had growth during the crisis, but it was not the case.” This was because travel and other services accounted for a large share of the company’s revenues, and these sectors were the most affected by the crisis.
Grouper was forced to adapt, launching new products such as the 'Stay Home Stay Smart' campaign offering over online courses, food delivery service Grouper Food or #HranaDoDoma and Grouper Shopping Mall. The last is a new project that “incorporates 10 years of experience in online sales and marketing and actually represents
the best of e-commerce and digital marketing,” Angelovska notes.
At the same time, local retailers have stepped up their online presence to allow them to continue reaching customers. Podgorica-based digital innovator Amplitudo worked
with local retailer Voli to set up the voli.me online store. Commenting on the launch, Amplitudo sales co-ordinator Nikola Plavsic says: “we know that in the first 24 hours after releasing Voli online stores there were 1.5mn clicks and Montenegro has around 600,000 citizens, so one can tell that the interest shown was huge.”
In Kosovo too, during the pandemic “many companies started to receive orders online, from food delivery, coffee, beer
and alcoholic beverages,” says Besnik Skenderi, director for professional and development products at UBT – Higher Education Institution in Pristina.
Building on an existing trend
While the pandemic gave a boost to e-commerce, it was building on an existing trend. The World Bank survey on the Western Balkans showed that people in the region already saw advantages in online shopping, specifically time saving (80% of respondents) and greater product choice (57%).
For example, 50% of Albanian respondents said they went online to buy goods not available in local shops, while only 15% mainly used online shopping to buy from local stores. In Montenegro too,“People tend to buy through international resellers. In most cases prices are better when you buy from
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abroad and the variety of products is also better,” comments Amplitudo’s Plavsic.
Meanwhile, main motivation factors for online shopping in North Macedonia, as Angelovska says, are lower prices and free delivery. Additional reasons include saving time, the flexibility to buy anytime, anywhere, and to buy more safely during the COVID-19 pandemic.
The World Bank study showed that the most popular channel was via domestic sellers’ own app/site, but large numbers
of purchases were also made from foreign sellers' own
sites and foreign e-commerce platforms, as well as through social media.
Instagram is a popular channel in Montenegro, according to Plavsic. He tells bne IntelliNews: “Most of the online retail in Montenegro works over the Instagram platform. Small and medium companies boost their accounts in order to have more followers to reach more customers and sell their products via the direct message system. In research that we conducted, 54% of Montenegrin companies do not have an online retail site at all, and of those who do 58% have a low quality site.”
Holding back the market
There remain a raft of obstacles holding back the development of e-commerce in the region. While the 2020 Balkan Barometer shows a high level of confidence among Kosovan respondents, of whom 81% respondents said they had no concerns about using the internet for online banking or to buy things, the figure was considerably lower at 46-49% in most countries in the region and as low as 34% in Montenegro and 38% in Bosnia.
The main fears when it comes to online transactions concern security and misuse of personal data. A fair number also said they preferred to do transactions in person so they could inspect the product or ask a real person about it.
According to the World Bank survey, “A key constraint for growth of online markets is a lack of trust in webshops, particularly when it comes to domestic sellers”, as cited by 83% of respondents across the Western Balkans. 30% listed the risk of identify and payment theft as their main concern. Additional issues were high delivery costs and customs duties, along with access to accepted payment methods, lack of English language skills and lack of internet access.
Representatives of Albanian e-commerce companies told World Bank researchers that the large informal economy was also a constraint on the development of the formal digital economy. While this is a general issue across the economy,
“in the context of emerging online markets, pressures from
the informal economy are heightened. Digital markets make
it easier for informal businesses to reach more customers – accentuating competitive pressures. As many customers form their first impressions of online markets, a negative experience with an informal company offering inferior services can