KPMG, a leading global professional services firm, has reported that Uzbekistan's e-commerce market has experienced a fivefold increase over the past five years.
As a result, it is now the fastest-growing e-commerce market in Central Asia. This success can be attributed to several favorable factors, including consistent government support and a rise in the number of internet users.
The emergence of local players, such as the primary national player Uzum Market, has also contributed to this trend as it is the country's sole marketplace with its fintech solutions and logistics infrastructure.
The e-commerce market in Uzbekistan was valued at $311mn by late 2022, with an estimated growth projection to reach $2.2bn by the end of 2027. This indicates an e-commerce penetration target of 9-11%, compared to the current 2.2% level.
KPMG analysts anticipate a surge in the number of e-commerce buyers in Uzbekistan due to growing internet penetration and favorable demographics. The solid macro fundamentals and increasing share of the urban population are also expected to result in higher-order frequency.
The government's support has played a crucial role in developing the e-commerce industry in Uzbekistan. Key milestones in this development include the adoption of the "Electronic Commerce Law," the "Digital Uzbekistan 2030" strategy, the "E-commerce Development Strategy," and the establishment of an IT park.
Nikolay Seleznev, Director for Strategy and M&A at Uzum Market, highlights that
integrating convenient fintech services with marketplaces is one of the growth levers available in Uzbekistan.
One in three orders placed with Uzum Market is paid in installments via Uzum Nasiya. Further integration with Uzum Bank and Click would enable the company to provide customers with more convenient payment options.
However, KPMG analysts have identified the lack of logistical and IT infrastructure, as well as convenient and reliable digital financial services, as primary barriers to the development of the e-commerce market in Uzbekistan. Nevertheless, the emergence of major national players, such as Uzum Market, who are developing logistics and financial infrastructure, will significantly impact market development and help overcome existing limitations. Investors have recognized the vast potential of this sector and are keen to leverage the opportunities, as evidenced by the entry of foreign companies like ZoodMall into the market.
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