Trends in the development of e-commerce in Uzbekistan

The COVID-19 factor has had a significant impact on the growth of e-commerce, and 2020 is characterized by an accelerated adoption of e-commerce, with many consumers in isolation relying mainly on online platforms with
delivery function. This leads to the growth of new online consumers and the expansion of existing online consumers through a wider range of products and services.
Opportunities are present all over the world and the Central Asia region is no exception to the rule, as evidenced by the forecast indicators for the development of e-commerce in Kazakhstan, Uzbekistan and Kyrgyzstan, calculated by the specialists of the International Trade Center.
E-commerce revenues are expected to have a positive CAGR of 16.5% through 2023 in Uzbekistan.
The main stages and their content in terms of preparing SMEs for electronic sales are:
1. Marketing analysis of the market and development of a concept for promoting a product or service.
2. Creation of effective content for a product or service, formation of an effective value proposition.
3. Choosing the optimal promotion platform, taking into account the characteristics of the consumption of a product or service, a client portrait, etc.
4. Selection and development of a logistics system and selection of optimal online payment systems.
Thus, we can state that electronic commerce is a new global trend in the promotion of goods and services in the era of the information society. Digital technologies have already taken place and are fundamentally changing the way we produce, consume, deliver and sell goods and services. In the era of the digital economy, in order to remain competitive in the domestic and international markets, business entities are forced to revise their strategies, business models and development policies.
As part of the promotion of processes for the introduction of e-commerce and trade in the market of Kyrgyzstan, in November 2018, the conference “Promoting Economic Progress” was held in Bishkek.
through the development of e-business and e-commerce”, which was organized by the Ministry of Economy of Kyrgyzstan and the national office of the OSCE. During the conference, many experts discussed issues of digitalization not only in Kyrgyzstan, but also in Central Asia.
The State Secretary of the Ministry of Economy of the Kyrgyz Republic Sharsheev A. in his speech noted that electronic commerce and commerce already exist in the country's market - this is online commerce, the Taza Koom program, the Tunduk platform has been created, through which the state provides the population services in electronic form. The Ministry of Economy is developing a draft law on e-commerce, which will regulate the relationship between business and government agencies in order to carry out electronic trading on electronic trading platforms. It will create a legal basis for business relationships among themselves, with government agencies, so that there is a legal framework, the responsibility of the parties, so that it is clear what protective mechanisms should be, what mechanisms should be on the legal basis of each of the parties.
Thus, e-commerce and digital technologies open up huge prospects for SMEs and economies, developing countries, which rightfully include the countries of the Central Asian region: Kazakhstan, Uzbekistan and Kyrgyzstan. Given the importance and role of SMEs in the economy of each country and region as a whole, the task is to put into practice the benefits of e-commerce.
The degree of development of e-commerce in the country in the context of the transition to a digital economy, which is directly related to the level of development of information and communication technologies (ICT), is usually assessed by various indicators: the share of e-commerce in the digital economy, the amount of investment in the ICT industry, the speed of the Internet, its coverage of the country’s territory and availability for use by the population, the share of public services in the e-government system, the number of registered EDS keys, the number of active 2nd-level domain names in the .UZ zone, the provision of organizations with ICT specialists, security in electronic trading and others. In addition, important are the indicators in international ratings that assess the degree of development of information technology in the country.
Significant progress has been achieved in many of these indicators in Uzbekistan since 2016. Thus, the gross value added created in the field of services in the field of "information and communication" has doubled since 2016 from 4.4 to 8.8 trillion soums, and the volume of services provided by the type of economic activity "Information and communication" has increased. 2 times from 6.3 to 12.9 trillion soums [10].
The development of the ICT industry was facilitated by the growth in the volume of investments in fixed capital by the type of activity “Information and Communication”, which in the period 2016–2020 grew 4 times from 1.2 to 4.8 trillion soums, including the volume of foreign investment and loans increased 2.5 times from 0.8 to 2 trillion soums.
The telecommunications infrastructure is developing dynamically, experts write. The length of the laid fiber-optic communication lines increased by almost 3.8 times - from 17.9 to 68.6 thousand km, by the end of 2021 their length is planned to almost double and reach 118.6 thousand km. As a result, an intra-republican and international transport network has been formed, which provides the possibility of high-speed, broadband access to world information resources, which is the basis for entering the global electronic commerce.
The number of base stations for mobile communications increased by 1.8 times from 17.7 to 31.7 thousand units; in 2020 alone, more than 5,600 new mobile telephone exchanges were installed and launched [10].
The expansion of the network of base stations for mobile communications made it possible to create conditions for the provision of services (to increase the coverage) of mobile communications for 98% of the country's population, including high-speed communications - up to 90%.
Researchers note that the expansion of the network of mobile communication stations occurs due to the installation of new stations that ensure the operation of 3G/4G networks, and projects have also been implemented in Tashkent to install 15 base stations of the fifth generation - 5G [10].
Since 2016, the number of mobile communication subscribers has grown by 20% to 25.4 million people, and the number of Internet users has almost doubled to 22.5 million people.
The number of installed ports of broadband access to the Internet is growing annually, which provides subscribers with a continuous connection to it for transmitting and receiving information at high speeds, the study says.
In 2020, about 1 million additional ports were installed, in total since 2018 the number of ports has increased from 1.2 to 3.2 million, and by the end of 2021 it is planned to increase this figure to 3.9 million, which will significantly expand opportunities for access of wired subscribers to broadband Internet [10].
To date, all kindergartens, medical institutions, as well as more than 8,000 schools (80% of the total) have received access to high-speed Internet. In 2021, it is planned to provide access to the network of all schools, as well as mahalla gatherings of citizens (about 10 thousand gatherings) [10].
The growth in the number of users of mobile communications and the Internet was facilitated not only by the development of ICT infrastructure, but also by the reduction in the cost of using the Internet, while at the same time increasing its speed, which is the conditions necessary for the functioning of e-commerce. Since 2016, the bandwidth (speed) of the international data transmission network has been increased by almost 22 times - from 55 to 1200 Gb / s. Increasing the speed of the Internet will speed up the process of passing transactions in the course of electronic commerce. At the same time, the cost of tariffs for Internet services for providers decreased by 21 times from 91.5 to 4.3 dollars per 1 Mbps [10].
In accordance with a government decree dated April 17, Uzbektelecom, together with the American Winncom Technologies, is implementing a project to modernize the packet switching center in the amount of almost $ 26 million this year, which will expand its bandwidth to 1800 Gbit / s [10].
The speed of the Internet for consumers has also increased. Since 2018, the speed of broadband Internet for subscribers has increased from 10.11 to 36.85 Mb/s, and for mobile Internet subscribers – from 9.97 to 13.89 Mb/s [10].
Conditions for the development of e-commerce have been created. In accordance with the Decree of the President of May 14, 2018 “On measures for the accelerated development of electronic commerce”, in order to stimulate business entities in the field of electronic commerce, the National Register of e-commerce entities e-tijorat.uz was created.
It includes, on a voluntary and free basis, legal entities and individual entrepreneurs whose income from the sale of goods and services through e-commerce is at least 80% of the total volume of goods and services sold by them. At the same time, they will be payers of a single tax payment at a rate of 2%.
To assess the effectiveness of public administration of e-commerce in the context of the transition to a digital economy, it is proposed to consider such indices as [9]:
"Government Effectiveness" - the index includes indicators that measure the quality of public services, the quality of development and implementation of domestic public policy, the level of confidence in the domestic policy pursued by the government, the quality of functioning the state apparatus and the work of civil servants, their competence, the degree of their independence from political pressure, and so on.
“Regulatory Quality” reflects “the perception of a government's ability to design and implement sound public policies and regulations that enable and encourage private sector development”. With its help, measures are recorded that are contrary to the principles of a market economy, such as inadequate control of the price level and the banking sector, excessive regulation of business development, trade relations, and so on. Measures to effectively comply with government regulations such as labor, commercial and consumer regulations.
Open Government measures the openness of government as measured by the extent to which the government shares information, empowers people with the tools to hold government accountable, and encourages citizen participation in public policy discussions. Order and safety measures how well a society keeps people and property safe. Security is one of the defining aspects of any legal society and is a fundamental function of the state. It is also a precondition for the realization of the rights and freedoms to which the rule of law aspires.
“Regulatory enforcement” refers to the enforcement of regulatory measures to the extent that rules are fairly and effectively enforced and enforced. Regulations, both legal and administrative, structure behavior within and outside government. It addresses the issue of how regulations are enforced and enforced.
Criminal Justice assesses a country's criminal justice system. An effective criminal justice system is a key aspect of the rule of law, as it is the usual mechanism for handling complaints and suing individuals for crimes against society.
"Civil Justice" is a measure of whether ordinary people can resolve their grievances peacefully and effectively through the civil justice system. It measures whether civil justice systems are accessible and affordable, and free from discrimination, corruption and undue influence from public officials. It examines whether the proceedings are conducted without undue delay and whether decisions are effectively enforced. It also measures the availability, impartiality and effectiveness of alternative dispute resolution mechanisms.
Absence of Corruption measures the absence of corruption in government. The factor takes into account three forms of corruption: bribery, improper influence of public or private interests, and misappropriation of public funds or other resources. These three forms of corruption are considered for public servants in the executive, judicial, legislative, and other systems. It also measures whether public procurement and public works contracts are awarded through an open and competitive bidding process and whether government officials abstain from various levels of executive power from embezzlement of public funds.
For the purposes of analyzing the factors affecting the efficiency of public administration of e-commerce in the context of the transition to a digital economy in Uzbekistan, we will conduct an econometric analysis.
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