Analysis of the retail e-commerce market in the Republic of Kazakhstan

Important note

Strategy&, Part of the PwC network, together with the Digital Kazakhstan Association (“DKA”) presents the results of the study “Analysis of the retail e-commerce market* in the Republic of Kazakhstan” for 6 months of 2023. Data analysis was conducted by the Data & Analytics team, comprising data analysts, data engineers and consultants with industry expertise.

The major representatives of the e-commerce market in Kazakhstan took part in the

study: Mechta.kz, Kaspi.kz, Halyk Market and other respondents who wished to remain anonymous.

The results of the study reflect: 

● Overview of the retail e-commerce market for 6M2023

● Sales volumes and number of transactions

● Average spend and changes in average spend

Introduction

The retail e-commerce market in Kazakhstan is pursuing a path of significant growth over the past few years, despite the turbulent developments of 2022, peak values of annual inflation, declining purchasing power and rising costs of living overall at the global level. In the first half of 2023 market size amounted to KZT 896 billion, which is already more than 66% of the market size for the whole year of 2022. Taking into account data for the previous periods and the seasonal pattern of market dynamics, it can be assumed that in the second half of 2023 the market size will be even greater. 

In addition to government support in increasing the level of digitalization in the country as a whole and developing the e-retail commerce market, the main factor in market growth in 2023 may be the emergence of new large marketplaces.

Sales volume for 6M2023 increased by 79% compared to the corresponding period of the previous year, while the number of transactions increased by 87% reaching 36 million, resulting in a 4% decrease in the average spend in Tenge. It is also interesting to note that the decrease in the average spend in Tenge in the first half of 2023 compared to the previous half of the year was 13%, which was a record six-month decrease in the average spend for the entire reviewed period (2019-2023). It may be assumed that financial instability amid high inflation, geopolitical risks, the energy crisis and the cost of living crisis in general could affect the behavioral patterns of consumers, people focused on purchasing essential goods and replacing goods with cheaper alternatives. 

We express our sincere acknowledgements to all participants in the study. We would like to point out that while we did not obtain permission from all of the respondent companies to disclose their names, our study included data that we believe represents 85% of the retail e-commerce market in Kazakhstan. 

Sincerely yours, Natalya Lim

Overview and objectives of the study

Representatives of retail e-commerce in Kazakhstan took part in the survey. Some participants in the study provided us with detailed comments that were included in the content of the study.

 In order to obtain the most complete and balanced picture, the largest market players from the e-retail sector and second-tier banks were involved. Among our respondents are Mechta.kz, Kaspi.kz, Halyk Market, and other respondents who wished to remain anonymous. 

The study analyzed data for 6 months of 2023. The experts were asked to answer questions regarding the total volume and number of online sales. To accurately determine the average monthly USD/KZT exchange rate, the data of the National Bank of the Republic of Kazakhstan were used. Data on growth and value of inflation were taken from the National Bureau of Statistics of the Republic of Kazakhstan. 

In addition, respondents were asked to share their opinion on the development of the retail e-commerce market in 2023, trends, barriers, and changes in consumer behavior that affected business development. 

Our analysis of the retail e-commerce market in the Republic of Kazakhstan is published on a regular basis, 2 times a year. We analyze the data for six months, which gives our readers the opportunity to familiarize themselves with the movements in the presented indicators in more detail and learn the opinion of the market players. 

Data analysis was conducted by the Data & Analytics team, comprising data analysts, data engineers and consultants with industrial expertise. 

The team has expertise in conducting different kinds of analytical research in various areas of the economy, involving relevant industry experts. Our team also prepares and issues the following regular reports: 

● Kazakhstan macroeconomic review 

● Analysis of the payment market in Kazakhstan

● Analysis of changes in prices in Kazakhstan

Additionally, we have developed a Retail Ecommerce Dashboard, where you can see data with additional breakdowns and compare them interactively for different periods using filters to obtain different perspectives based on aggregated data from the current analysis, data from other public analyses by PwC and public information. 

In case you are interested in accessing the Retail Ecommerce Dashboard, please contact Marina Kim (marina.k.kim@pwc.com) or Viktoriya Gorlanova (viktoriya.gorlanova@pwc.com). 

The survey for this report was conducted in August 2023. 

Source: pwc‍

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