Confab Surveys E-Commerce Impediments, Opportunities

EghtesadOnline: The Iranian media group Donya-e-Eqtesad gathered e-commerce stakeholders for a conference in Tehran on Wednesday to boost the country’s startup ecosystem.

News ID: ۷۴۹۱۷۳

14 December 2019

The media conglomerate is committed to promoting free trade and helping businesses grow in a competitive environment. To this end, the company has decided to provide Iranian tech firms with a platform to promote their activities.

Prominent participants at the Wednesday gathering were Deputy ICT Minister Amir Nazemi, parliamentarian Farid Mousavi, Iran IT Organization’s deputy for legal affairs, Mohammad Jafar Nanakar, and CEOs of online retailer Digikala, Saeed and Hamid Mohammadi.

During the event, hurdles hampering Iran e-commerce sector’s growth were reviewed, some of which are its outdated copyright laws and bloated bureaucracy, according to Financial Tribune.

Regulatory hurdles hampering startup growth were also discussed. According to business insiders, outdated regulatory processes have taken a harsh toll on local startups. Experts have often called on policymakers to overhaul procedures.

Nima Namdari, CEO of eFarda Company, spoke about Iran’s deteriorating economic conditions, as people’s purchasing power has been shrinking since the US reimposed sanctions against Tehran.

He said services offered by most startups have become a luxury most Iranians cannot afford.

Digikala managers also presented a report on the company’s operations and revenue. Hamid Mohammadi, the company’s co-owner, presented a report about the e-commerce giant’s turnover during the first half of the current Iranian year that started in March.

Every day, Digikala’s app and website are visited 4.1 million times, and 150,000 to 200,000 orders are registered with the firm. One out of every four Iranians purchases at least one article from Digikala every year.

The most searched goods on Digikala are mobile phones, external hard drives and power banks.

The company’s data showed Chinese tech titan Huawei is expanding its presence in the country’s smartphone market while Apple’s share is shrinking.

Apple handsets’ prohibitive prices and iPhone import obstacles have contributed to the decline in sale. Furthermore, the American company’s over-compliance with US sanctions against Tehran has limited Iranians’ access to its services. For instance, Iranian computer programmers cannot publish apps on Apple’s App Store.

A panel discussion was also held on the sidelines of the event, during which Deputy ICT Minister Nazemi said, “Internet shutdowns affect the economy. The effect is not limited to IT firms. Shortsighted politicians, unaware of the impact, hit the internet kill switch injudiciously and rashly.”

A weeklong internet shutdown was imposed in Iran on Nov. 16, following widespread protests over the government’s decision to triple fuel prices.

Iran E-Commerce Union Spokesman Reza Olfatnasab also participated in the panel discussion. He spoke about the high risk of investment in Iran’s e-commerce sector. He implied that the recent internet shutdown took a harsh toll on the sector and criticized policymakers’ inaction for curbing the risks.

Overview

E-commerce accounts for 10.4% of Iran’s GDP, with the market’s nominal value standing at 2.08 quadrillion rials ($18.4 billion), E-Commerce Development Center of Iran reports.

In September, the center released its annual report for the fiscal year that ended March 2019, which indicates that the nominal value of Iran’s e-commerce market has grown 30.5% to reach 2.08 quadrillion rials ($18.4 billion) from 1.59 quadrillion rials ($14.08 billion) in the fiscal 2017-18.

The report further states that the market’s real value stood at 6.1 quadrillion rials ($54 billion) for the fiscal 2018-19, down 13% compared with the same period of a year earlier.

According to the report, during the fiscal 2018-19, the e-commerce sector’s share in Iran’s gross domestic product registered a 5.28% year-on-year decline.

The report put Iran’s GDP (excluding revenues from oil industries) at 20.014 quadrillion rials ($176.8 billion) for the fiscal 2018-19 and 14.5 quadrillion rials ($128 billion) for the year before.