13th KAZAKHSTAN INTERNATIONAL Security, Fire Protection, Information Technologies EXHIBITION

Kazakhstanis spend $1.4bn online in 2012

$1.4bn was spent through Kazakhstan's internet stores using VISA, MasterCard and American Express in 2012, according to Konstantin Gorozhankin, General Manager of CNP Processing GmbH and director of the AWARD.KZ national internet awards.

That being said, only one in ten transactions took place in Kazakhstan with a Kazakhstani internet store receiving the payment – most of the money went to stores in the USA, Europe, Russia, the UK and China.

Gorozhankin also revealed that the internal e-commerce market grew by 2.7 times to reach $400m, although over half of all payments are still made in cash.

"Two initiatives, if they are carried through to completion, will be major positive factors in the development of e-commerce – the introduction of e-invoices, and a tax cut for goods and service sold over the internet. This is how it is done in the USA and other developed countries, where no sales tax is applied to purchases made over the internet," said Gorozhankin.

Nurlan Zhagipanov, Executive Director of Kazcommetsbank, added that international online stores accounted for around 60% of card transactions in 2012.

Through the ePay system alone, which allows online merchants to take payment from cards from any bank, 8bn tenge was spent in 2012 on over 750,000 transactions, which made up 90% of the market in Kazakhstan. ePay's monthly turnover is around $11-12m.

This aside, international services such as iTunes AppStore, Skype and Google Play, which take micropayments of up to $5, were the most popular among Kazakhstanis. "Payments made through international online clothes stores are considerably larger – from $100 to $500. Significant sums go through PayPal, the main payment system used on eBay," said Zhagiparo, who also said that Amazon, Victoria's Secret, Moneybookers and transactions carried out through Forex were also very popular.

Meanwhile, Timur Ismagilov, an analyst at the Agency for the Research of Investment Profitability, has revealed that the amount going to the accounts of international internet stores varies from $130m to $300m depending on which survey is read.

"Looking at the list of goods and services most in demand among Kazakhstanis, the leaders are household goods, mobile devices, utilities payments and various electronic content – books, films and software," said Ismagilov. Demand is much smaller, although it is quickly growing, for clothes, footwear and food products.

Ismagilov also stressed that despite its explosive growth, e-commerce in Kazakhstan still faces a range of problems – inadequate legislation, logistics issues, a lack of trust in non-cash payment methods (most payment cards in Kazakhstan cannot be used for online transactions), and the draconian commissions and payment rates charged for use of payment terminals.

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