The e-commerce sector in Central Asia is almost self-propelled now. The stakeholders continue to add facilities and features to make it profitable and beneficial across the board.
The Fund for Digital Initiatives of the Eurasian Development Bank (EDB) and the United Nations International Telecommunication Union (ITU) held a working meeting earlier this month to discuss potential collaboration on promoting digital development in Eurasia and the consolidation of efforts and resources to launch joint projects and programmes.
The parties officially announced the signing of a joint agreement to collaborate on the GovStack project. The agreement aims to accelerate digital transformation in public services in the Central Asia and Caucasus region. The GovStack project envisages the creation of a portal for sharing knowledge, best practices and digital public goods, including the advancement of e-government architecture and methodologies for the development and amendment of IT sector regulations. The digital projects published on the platform will be available for implementation in other countries as ready-to-use products based on open-source solutions. Each participating country will have the opportunity to share best practices from its portfolio in order to foster digitalisation in the region as a whole.
The portal will also contain recommendations and advice on reengineering business processes in the public services sector, as well as recommendations on amending or implementing regulations due to changes in technology and legislation.
Earlier, the European Bank for Reconstruction and Development (EBRD) decided to support further the development of modern retail standards and e-commerce in Uzbekistan by financing the expansion of one of the country’s leading consumer electronics and household appliances chains, CA-store (previously known as “Credit Asia”).
The EBRD’s loan of up to US$ 10 million will finance CA-store’s working capital needs related to its expansion outside the capital city of Tashkent. It is expected that Uzbekistan’s retailer will capture all major cities in the next few years.
The funds will be also used to develop CA-store’s online sales by introducing new e-commerce standards in the country’s fast growing e-commerce market and offer online shopping services to customers across the country.
CA-store’s increased regional coverage will contribute to the reduction of the shadow economy by offering authentic goods and fully complying with the national tax requirements.
As part of the project, CA-store will be both creating equal and fair employment opportunities for its staff and offer better inclusivity for customers in all the regions of the country.
Last month, Uzum, the online and e-commerce major in Uzbekistan announced the preparations for Series B Funding Round. It also declared that the net income of Uzum registered 50% boost in the first half of 2024.
The key operating and financial highlights of Uzum according to its press release:
- Marketplace GMV grew 4 times year-on-year
- Loan portfolio of Uzum fintech services more than doubled
- Every third resident of Uzbekistan uses Uzum services
Uzum is currently preparing to launch a Series B funding round in Q4 2024 or Q1 2025 and seeks to raise up to $300 million to fund the further development of its BNPL business, online lending products, and its e-commerce vertical.
The Uzum ecosystem delivered strong growth during 1H 2024, with consolidated net income increasing by 50% year-on-year on the back of the rapid development of its e-commerce and fintech services. The combined audience of the ecosystem nearly doubled year-on-year and reached 10.6 million active users per month, or approximately 30% of Uzbekistan’s population.
Uzum’s e-commerce unit posted a nearly fourfold increase in GMV, as the online marketplace Uzum Market further solidified its position as the country’s e-commerce champion. The marketplace’s GMV grew 3.5-fold year-on-year, while the number of orders processed by the marketplace in 1H 2024 grew more than threefold year-on-year and totaled more than 8 million, with more than 10,000 sellers now operating on the platform. Looking ahead, the Company is on track to commission the first phase of the largest warehousing complex in Uzbekistan (77,000 sqm) by year-end to service the further expansion of Uzum Market.
During this period, the online food delivery service Uzum Tezkor became a significant contributor to Uzum’s e-commerce business. In just over a year of its operation, Uzum Tezkor has become the largest domestic delivery service by geographic reach, covering the eight largest cities in the country. The service continues to onboard new restaurants to offer customers a growing range of delivery options, with 1,690 restaurants operating on the platform by the end of the period.
The Company continued to focus on profitability and product development for its fintech businesses, notably the digital Uzum Bank and the Uzum Nasiya installment payment service. During this quarter, the Bank launched pre-order branded Visa virtual cards with attractive terms for Uzbek consumers and is planning an active roll-out of online lending products over the next 12-18 months, as the business undergoes a strategic transformation into a full-blown neobank with a full suite of daily banking services.
Uzum Nasiya, a convenient installment service for everyday needs, posted a TFV 2.5-fold increase year-on-year while its loan portfolio more than doubled. The number of users with approved limits amounted to 2.8 million at the end of Q2 2024, an increase of 27% from Q1 2024. The service also showed strong synergy with the Uzum’s online marketplace, with more than 55% of orders on Uzum Market paid via Nasiya’s BNPL solution during this quarter.
In spring 2024, Uzum reached a valuation of over $1 billion and became the first tech unicorn in Uzbekistan, placing the country among the world’s most dynamic and high-opportunity markets for the development of e-commerce and fintech services. The Company is laying the technological foundation for the digitization of Uzbekistan’s economy and aims to continue its pace of growth by actively developing its own physical and IT infrastructure, as well as seamlessly integrating its services throughout the Uzum ecosystem.
Uzum is a digital ecosystem and the largest digital platform in Uzbekistan, providing services spanning e-commerce, express delivery, banking and fintech, and business development. More than 10 million people in Uzbekistan, or nearly one-third of the country’s population, use Uzum services every month.
After successful series A round in March 2024 Uzum became the first tech unicorn in Uzbekistan with a post-money valuation of over $1 billion
While Uzum reported its dynamic developments, the MBANK of Kyrgyzstan also made its move. Earlier this month, the Singapore-based cross-border payment solutions provider Thunes entered into a strategic agreement with MBANK to allow the latter to be part of the Thunes Direct Global Network.
As part of this collaboration and by being a member of the Thunes’ network, MBANK is set to be able to connect businesses and individuals in Kyrgyzstan directly to over 7 billion mobile wallets and bank accounts globally, to conduct payments in real-time in over 130 countries and 80 currencies more conveniently, reliably, and efficiently.
The partnership between Thunes and MBANK intends to facilitate simplified money movement to and from Kyrgyzstan, with the two firms planning to enable local licenced institutions and merchants to make a wide range of transactions, including B2B, P2P, B2C, and C2B payments. Through these services, Thunes and MBANK aim to assist different cross-border use cases, such as foreign education payments, ecommerce transactions, and local acceptance of gig economy payments.
As Thunes’ sending partner, MBANK is set to allow local businesses and consumers to access the Thunes Direct Global Network, including the firm’s Smart Treasury Management Platform and Fortress Compliance Infrastructure. This focuses on enabling increased speed, control, visibility, protection, and cost savings when conducting real-time cross-border payments.
Furthermore, by entering Kyrgyzstan, Thunes centres its efforts on complementing its broader development strategy to expand its Thunes Direct Global Network to reach all countries at a global level. Following this initiative, Thunes and Commercial Bank Kyrgyzstan are set to extend the capabilities of their payment solutions across additional countries, including Armenia, Azerbaijan, Belarus, Kazakhstan, Moldova, Uzbekistan, Tajikistan, Turkmenistan, and China. This move aligns with a broader mission of assisting the growth of this region, which represents a central part of China’s Belt and Road initiative. /// nCa, 20 September 2024