E-commerce in Central Asia

[img_assist|nid=7731|title=|desc=|link=none|align=left|width=100|height=87]Trading, or commerce, is a concept that existed practically at all epochs in various forms. In ancient times the role of payment units belonged to many different goods and services. A man just exchanged the widget he produced himself for another one made or cultivated by his neighbour. Later nations introduced many other forms of payment units. These could be pearls, cockleshells, provisions such as pepper and salt. A human skull - most exotic currency - was in use at Solomon Islands. Certainly there were many other just as strange money.

Time went on and mankind chose a metal as a unit for paying. At first it was just a piece or a bar of gold, silver or copper. Then in the 7^th century B.C.E. ancient Greeks in Laodicea began minting first gold and silver alloy coins. But nothing is static in the Universe. Everything is subject to dialectics. Thus in the course of dialectical development of the trade when its turnovers became larger metal money turned into a burden. That was the reason to introduce paper as a new more convenient currency.

The invention of paper money is ascribed to ancient Chinese merchants. First media of exchange were receipts for the goods received for storage, taxes paid and credit allowed. It is said to take place in the 12^th century in Chinese province Sichuan which was the motherland of paper itself. And six centuries later Europe started printing paper money.

Three hundred years passed and we have been still using paper notes. But as the dialectics is a concept to be applied to all in the world money could not become an exception. Today we can see a new and very distinct payment form which is known as electronic payment system or EPS. E-currency is a very convenient and relatively safe unit for payments as it is kept as a bank account and you may access it by means of a plastic card or an e-payment system.

E-money is believed to gradually supplant paper and metal money. Some people even think that the latter is to become collection items for numismatists and bonists. But others hold the opinion different from this. They think that paper money will remain in use and popular just as theaters and cinemas which in turn were also predicted to vanish on the score of DVD and other digital media which are considered to be more convenient. But this is another story.

So how about e-commercing in Central Asia?

The Economist Intelligence Unit (EIU), a firm that conducts industry analyses, ranked the top 60 countries in the world in terms of readiness for conducting e-business.

The five countries most prepared for e-commerce, according to the survey, are the United States, Sweden, Finland, Norway and the Netherlands, in that order. The United Kingdom, Canada, Singapore, Hong Kong and Switzerland ranked in the number six through ten slots.

Third-world countries in Africa, the Middle East and Asia dominated the lower rankings. The bottom 10 of the 60 countries studied were China, Sri Lanka, Ecuador, Vietnam, Pakistan, Kazakhstan, Algeria, Iran, Nigeria and Iraq.

"Countries at the top of the league stand to reap the benefits from the new networked economy, while those at the bottom will struggle to compete in the digital age," the study concluded. "Companies looking to realize the global promise of the Internet and enter far-flung markets can judge from a country's position in the rankings how easy that move is likely to be."

Well, Kazakhstan, the largest country in the Central Asian region, is specified in the list of the bottom ten countries which are less to be e-ready. Uzbekistan and Kirghizia are not included at all. But for all that these three countries are also among those which are ‘struggling to compete in the digital age'. In our article we are going to make an outline of ecommerce situation in each of the states mentioned.

Kazakhstan

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The digital market in Kazakhstan is rapidly developing today. As per existing research data up to 10 percent of the residents are using online services and the number is growing yearly.

But the history of the electronic trade in the country is rather multiplex. Market platforms were exercising first good times then worse ones, they opened and closed. But let us push aside this historical blah-blah and get to the particular information.

Today in Kazakhstan homebanking services are provided by 6 banks. Among them there is Kazkommertsbank (KKB), National Bank of Kazakhstan (Halykbank), Bank TuranAlem, Bank CenterCredit, TEXAKABANK and Bank Caspian. However since the government issued the Law of the Republic of Kazakhstan "About the electronic document and electronic digital signature" nothing has changed in the course of these financial institutions. This is explained by a simple reason. There are no certifying centers which should register electronic digital signatures which otherwise are of no use. [img_assist|nid=7732|title=|desc=|link=none|align=right|width=100|height=41]

B2B commerce is practically undeveloped in the country. There were several attempts to arrange B2B trading platforms but gradually the interest to them cooled down. As per auctions residents of Kazakhstan may only be content with the services of eBay and Molotok.ru. The latter by the way offered to send by e-mail any code, law and other actual or invalid regulation document of the Republic of Kazakhstan.

And the most flourishing online marketing service is online shopping. There are over 20 stores of different profiles working in the Kazakh online section. You can see here cards selling platforms, multimedia shops, books and software as well as provision stores. And there is even a sex shop.

One of the popular internet-markets in the country is Sim Sim developed and supported by the Internet provider company Nursat. The goods in the store are shipped directly from the supplier which uses its own delivery services. According to the portal statement there are more than 560 items classified into 3 main groups: provisions, car service centers, flowers. Buyers can make their payments in two ways. They may pay by cash at the delivery or with the credit card. Electronic transactions are made via the Electronic Payment System developed by Nursat in alliance with the National Bank of Kazakhstan.

Homebank owns a trading center either. There is no shopping site itself except the second level domain SHOPS.KZ which can be found in the URL addresses of several stores such as elfina.shops.kz (Elfina toys store), ibs.shops.kz (the store of IBS company). Credit cards are authenticated by the special Center of plastic cards authorization. The latter delivers services to "Yurist WWW" (zakon.kz), Kazakhstan legislation searching engine and Press.kz, a book store. There are also a couple of other large online shops like East Bazar and KUPIDA but these are closed at present for restoration. As regards to KUPIDA it opened on October 6, 2000 in one of the coolest entertainment centers of the south capital and became the first online store developed and launched on a professional level.

Ecommerce market is still developing in the country and it is believed to achieve higher ratings in the near future so that local online stores will be able to compete with those in other countries where online business is on a top level.

Uzbekistan

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According to the review made by UNDP Uzbekistan has a great potential for developing ICT in the country as "Uzbekistan, as most of the former socialist countries, has relatively better human development indicators (high literacy rate, relatively well established health and education system, etc.) and physical infrastructure compared to other developing countries." ICT is very important as "it improves efficiency, enhances competitiveness of Uzbekistan's economy, increases political accountability and others. In short: ICT improves the quality of life."

At present time Uzbekistan has made great strides in implementing ICT tools to extend opportunities for e-commerce. A flexible legislative base was created in the country to promote IT-technologies particularly in the sphere of electronic control. Presidential decree on May 30, 2002 set forth new strategic directions and goals of ICT development in Uzbekistan. The Cabinet of Ministers of the Republic of Uzbekistan approved the Program of ICT development for the period of 2003-2010. 16 acts to regulate online business like "On electron documents turnover" and "On electron commerce" were issued by the Parliament, 2 acts are drafted and 2 are not developed yet. ICT Coordination Council is established, which: consists of key Ministers (economy, finance, education, trade), industry leaders, representatives of IFI, NGO, academia and is chaired by the Deputy Prime-minister on the issues of ICT; has authority to issue guidelines, which have to be followed by all the entities in the country, to form working groups on the specific issues of ICT development; sets short term objectives to achieve strategic goals set forth by the Presidential Decree and the Programme.

3 centers for registering digital signatures were established in the Republic. As of April 1, 2008 the number of digital signature users makes up 12,868.

State institutions started to adopt electronic workflow systems while many businesses are already fully applying them.

The country has a positive experience in integrating the electron commerce. For instance, the single electron system of exchange trade, initiated by the Government and integrated into the Uzbek Republican Commodity Exchange, resulted in considerable increase of exchange trade across the country (commercial growth of 1,6 time in 2006) as well as showed that the integration of electron commerce is more beneficial for entrepreneurs from regions of Uzbekistan because here exchange trade grew almost twice.

Due to the online trade platform of the Ministry of foreign Trade created with the support of EGT corporation Uzbekistan is able to sell cotton, base and ferrous metals, gas and chemical production anywhere across the world.

Three years ago the country saw an introduction of an international online payments system. WebMoney Uzbekistan[img_assist|nid=7736|title=|desc=|link=none|align=right|width=100|height=52] became the first system to enable online commerce mechanism. Uzbek Guarantee Agency LLC TILLO-GARANT registered securities emission in amount of 100 million sums (over $88,000) to confirm the right of WebMoney Transfer memebers to posses WMY, an e-currency equal to Uzbek sum, and emitted it.

[img_assist|nid=7733|title=|desc=|link=none|align=left|width=100|height=64]To top up their Y-wallets customers may use WMY-cards rated 5, 10, 20, 50 and 100 thousand sum. Quite recently a 500 thousand card was issued.

With WebMoney Uzbekistan people may make online purchases, pay for mobile services, make instant payments and receive PINs for IP Telephony and dial-up access to the Internet.

But WebMoney system is not limited just to elementary one-off money transfer. WebMoney Transfer is a full-scale business environment.

The system has a certification service and there is a procedure of issuing WM-certificates for personal identification of members. The higher is the member's status the more effective his business is in the network, the more services are available to him. Members are assigned the levels of business activity and the credit level in the loan service.

Besides WebMoney Uzbekistan supports educational courses conducted by LLC Blago Invest to help starting entrepreneurs to comprehend advantages of WebMoney Trasfer system and to develop their own online business.

This month a new online banking service was launched in the Republic. This is the first service of that kind. Only customers of InfinBank are able to use the remote banking services so far.

A customer needs to have a computer with any operational system, optional browser and Internet connection to use InfinONLINE system. The online banking service users will be able to manage their time and savings deposits (open, fill up and close a deposit), handle credit account operations (repayment and application), pay for mobile and Internet services, utilities and so on. Security of interaction between the bank and a customer is guaranteed by the digital signature.

[img_assist|nid=7735|title=|desc=|link=none|align=left|width=100|height=44]Besides on May 12, 2008 in the National Press Center LLC Multisoft Solutions and LLC eKarmon Group announced the launch of a new pilot online payments system. The project is known as eKarmon online payments.

Every member is given an account where he puts any amount at his discretion. Any legal person or individual entrepreneur having a license for business (trading) activity may become a seller in the system. Any individual or legal person acquiring widgets for a personal, home or other usage irrelative to a business activity may become a buyer.

eKarmon system is to operate round the clock which allows to make instant online payments as per calculations of Uzbek communication and informatization agency. The system enables to pay for mobile and Internet services, international and city telephony and utilities as well as make purchases in the Internet-stores and trade markets across the country.

The system is attached to the national currency "Uzbek sum". Reliability of the system is ensured at the expense of personal unique digital signatures used by the customers. Digital signatures are used at entering the system as well as at making payments.

More and more people are getting familiar with internet shopping and e-commerce. New and modern web sites are providing online services. Hence, it is necessary to undertake further amendments to the accepted plans on the basis of the current achievements that lay a firm ground to assume Uzbekistan possesses a substantial potential for a promising e-business environment.

Kirghizia

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Current situation in the country looks as follows: on one hand ICT sector grows 20% yearly, on the other hand gross revenue of the sector is very low.

Ecommerce development in any state depends first of all on the growth of the Internet users, computer equipment availability, accessibility of new software and degree of ICT infrastructure development.

ICT infrastructure in Kirghizstan is of two main parts: transportation and dial-up network.

Data transfer is implemented via satellite, radio-link, air, wire and cable communications. Total extension of the channels is 2,869,365 km.

The number of the Internet providers in Kirghizstan amounts 16. Leading providers are Asia Info, Elcat, Totel, Aknet. Besides Internet access is provided by the national joint-stock company Kirghiztelekom.

Internet services market is featured with a large number of secondary providers delivering their access services by via one of the market leaders.

In whole there is every reason to assert that Internet services market is developing and extending on a large scale sizing more territories.

As in Uzbekistan residents of Kirghizia have an opportunity to enjoy the services of the international payment system WebMoney. Among all other services customers may get WebMoney credits. A consumer fills in application for the credit and after that it is considered within one day. In case of the positive decision the credit will be allowed through WebMoney Credit Exchange. The applications are filled in on the site of the E-money created to help Kirghiz people to properly use payment systems available in the country.

E-money service allows the users of WebMoney, E-Gold and YandexMoney to top up their accounts entering cash or non-cash funds and withdraw their money from electronic accounts. E-currency may be bought or sold in the exchange point of E-money.

With E-money users may purchase prepaid cards of various mobile services, Internet providers and IP telephony of Kirghizstan. In addition they may register their domain in com, net, org, biz, info, name, ru, su, us, cc, tv and figure out if the domain is busy or not.

Besides users may acquire WebMoney cards. For this pusposes E-money system created a special section on the site where prepaid WebMoney card can be activated. Entering the data of the card into the suggested form you can transfer the card's face-value to your WMZ wallet.

E-commerce in the Central Asian region is developing individually in every country. While one country has sufficient financial basis for online business, another has legislative ground the third possesses large network. Each of them strives to make online commerce a natural phenomenon for their people and integral part of their economies.