Page 17 - bne IntelliNews magazine February 2025

bne February 2025 Companies & Markets I 17
bne:Tech
Central Asia emerges as new e-commerce hub
bne Central Asian bureau
The Central Asian region, encompassing five countries with a combined population of 75mn – Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan – is poised for an e-commerce boom as international players jockey for position in this high-potential market.
E-commerce expansion
According to the World Bank, the GDP of Central Asian countries grew by 5.6% last year, is projected to rise by 4.3% in 2024, and will grow by 5% in the coming year. E-commerce is experiencing especially rapid growth due to the low penetration of modern retail-store chains in the region, where markets (bazaars) and independent shops dominate as the primary trade format.
“The largest marketplace, Kaspi.kz, whichisalsoadigitalbank,islisted on the NASDAQ stock exchange with a market capitalization exceeding $20bn”
The expanding e-commerce market in Central Asia is being contested by several groups of players: local, global, and regional.
Global marketplaces like Amazon and Alibaba are technically accessible to Central Asian consumers but have not developed local infrastructure for fast delivery, which limits their popularity. Regional players, like Russia-based Wildberries, have gained significant traction by investing in logistics on the ground and making their platforms more accessible to local sellers.
Local companies like Kaspi.kz and Uzum currently lead the e-commerce markets in the region’s largest countries, but the region is set to see increasing competition as local consumers increasingly turn to shopping online.
With a combined population of 75mn and fast-growing economies, e-commerce is taking off in Central Asia as international players start to jockey for position in the rapidly developing market. / bne IntelliNews
Growing markets
In Kazakhstan, the largest economy in Central Asia, the e-commerce market reached $4.6bn in 2023, accounting
for nearly 13% of retail turnover compared to just 4% in 2020. The largest marketplace, Kaspi.kz, which is also a digital bank, is listed on the NASDAQ stock exchange with a market capitalization exceeding $20bn. Kaspi.kz is pursuing international expansion and recently acquired the Turkish marketplace Hepsiburada.
In Uzbekistan, the most populous country in Central Asia, the e-commerce market amounted to $1bn in 2023, representing about 4% of retail turnover. The leading local player Uzum became the country’ s first tech unicorn this year and is expanding rapidly, with more than half of purchases on the platform made through its shariah-compliant BNPL (buy now, paylater)service.ThisissignificantforUzbekistan,where income levels are relatively low, and the predominantly Muslim population generally avoids using loans.
Kyrgyzstan, with a relatively small population of 7mn, saw its e-commerce market grow to $359mn in 2023, accounting for over 6% of retail turnover. In Turkmenistan, known for its natural gas production, and Tajikistan e-commerce is less developed but holds considerable potential.
For comparison, e-commerce accounts for 22% of retail turnover in the US and over 27% in China. Central Asian countries are poised for years of active market growth to reach such levels.
The Russian and regional market leader, Wildberries, is already present in three Central Asian countries and holds leading positions there. According to Forbes Kazakhstan, Wildberries’ sales in the country tripled in 2023, reaching $614mn.
In Uzbekistan Wildberries provides local manufacturers with opportunities to sell their products internationally, particularly to Russia. In 2023, sales of Uzbek sellers on Wildberries nearly doubled to $418mn.
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