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undermine consumer confidence in the e-commerce sector in general,” says the report.
The informal economy is a problem across the region, as shown by a recent study from the Center for Policy and Governance from Sarajevo, which estimated the size of the grey economy at around 30% of GDP in Bosnia, Montenegro and Serbia.
In North Macedonia, analysis conducted by the e-commerce association found that the biggest challenge for the sector
is the low level of digital skills among the population, but another issue is finding suitable staff, Angelovska says.
E-retailers consider the barriers to the development of e-commerce are: low level of consumer awareness for online shopping (79%); distrust in online shopping (79%); low level of digital skills among customers (65%); and unfair competition from unregistered traders and the shadow economy (55%).
“A key constraint for growth of online markets is a lack of trust in webshops, particularly when it comes to domestic sellers”
These are followed by banking conditions and e-commerce procedures (39%); payment system and insufficient use
of payment cards (31%); small supply on the market by domestic companies (26%); and banks' high fees for online payments (24%); with security concerns in the last place on the list (23%).
In Montenegro, according to Plavsic, “[The] main obstacle
is not having trust in online retails (fear of scams), also most people are not used to paying with credit cards online and a lot of people don't have enough knowledge of basic computer science. And there is the issue of small market size.”
Cash on delivery remains the most popular way to pay for products from domestic vendors. according to the World Bank report, though most buyers paid by card when purchasing from international sellers.
In Kosovo, according to Rina Bulliqi, education programme and communications co-ordinator at Kosovo United States Alumni (KUSA) non-profit association, there are two major problems for opening e-stores: the small market size (Kosovo is a country of 1.8mn people) and the weak judicial system. In establishing their e-commerce platforms, businesses listed other challenges such as payment security, followed by low consumer awareness of how to shop online, low desire to shop online, and product delivery issues.
“This means the market is not suitable for businesses that require large economies of scale. For businesses wanting to shift to e-commerce, this may be concern because they have to also consider how willing and capable citizens are to buy online, shrinking the market even further,” Bulliqi says.
“On a positive note, businesses suggest an increased trust in online payments, with more people paying with cards instead of cash compared to previous years. It will be interesting to see what happens to online shopping in the next few years.
I believe we will see a positive growth in online shoppers compared to when the pandemic first hit – once customers return to their full responsibilities,” Bulliqi adds.
Despite surveys showing a strong appetite for e-commerce, Kosovo has particular difficulties: “[S]ometimes credit cards that are issued in Kosovo are not accepted in the global market. This also has to do with the issue that Kosovo still doesn't have its own state domain internet,” says Skenderi. “We have potential but we need to build our own information systems, since at this stage we are just consuming and we are using third-party online platforms.”
A long-term change?
The question now is whether the momentum from the pandemic will translate into higher levels of online shopping in the longer term.
Most of the industry insiders interviewed by bne IntelliNews take a positive view of the future growth of e-commerce in the region.
“I think that we should be very optimistic about e-commerce in Serbia,” says Limundo’s Nicetin. "We can see that many offline retailers saw the potential of online retail and are already planning to offer their goods online. Customers have become very comfortable buying online and retailers should adapt to this trend by offering their buyers the best experience they can.”
In North Macedonia, Angelovska states that online orders have increased under the influence of COVID-19, but the main question is whether e-shoppers will continue to buy online
at the same pace even after the crisis. The indications are
that most will.
On the other hand, according to Bulliqi, in Kosovo “businesses noticed a significant rise of online shoppers right after the pandemic first hit; however, this was only the case when movement restrictions were very strict. Almost one year after the pandemic outbreak, businesses are now more likely to report drops in online shopping compared to a few months ago and more likely to report an increase in customers inside the stores. This behaviour suggests that people consider shopping as a leisure activity, and would rather do it in person.”
A new regional giant
The e-commerce sites from the Western Balkans are active alongside both international giants like Alibaba and Amazon,
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