Member Spotlight: Strengthening Serbia's E-Commerce During COVID-19
April 17, 2020
The Show Must Go Online
Many countries around the world are struggling in the pandemic to conduct banking and commerce – the exchange of money and buying critical necessities. Serbia has risen as an example of how early USAID interventions are helping improve resilience in crises.
In Serbia, COVID-19 has led to mandatory lock down periods and long lines extending out the door at groceries as people struggle to get basic supplies while following social distancing guidelines.
But COVID-19 has also forcibly expedited some changes that have been long in the making, providing a desperately needed lifeline for businesses.
The government is introducing tax policy measures, employment subsidies, guarantee schemes and subsidized loans for the private sector to maintain financial and employment stability by injecting liquidity into the economy. This is being done with the USAID Serbia Mission’s portfolio of projects providing input.
USAID has had a presence in Serbia for 20 years, focused on building the country’s economic resilience.
As a preparation for just the type of resiliency needed in times of crises, USAID’s Cooperation for Growth (CFG) Project and its predecessor project (both implemented by Cardno International Development) had recognized early on that technology and e-commerce could democratize access to markets and global trade. Tech would help globalization live up to its original promise of shared prosperity and growth.
This is especially true for small- and medium-sized enterprises.
“Our efforts to strengthen e-commerce are now helping people keep their jobs and maintain their livelihoods,” said Dragana Stanojevic, implementing partner Cardno’s Chief of Party.
“This has been a lifeline for businesses at this time,” she said. “And all kinds of companies are pivoting quite quickly – not just because they’re adaptable, but because the nuts and bolts are in place. Our team, the Serbian government, and Serbian e-Commerce Association (ECS) collectively put those measures in place in advance.”
CFG initially focused on building the e-Commerce market systems and has recently focused on building capacity of the ECS. As the only business association with membership ranging from large multinationals to microenterprises, ECS is focused on advocating for and helping firms digitize their business models, making them more competitive and resilient.
CFG’s assistance has been addressing the demand and supply side, training businesses on the benefits of online sales, as well as educating consumers and mainstreaming online shopping.
These foundational pieces, put in place as a direct result of CFG efforts, are now paying off in the wake of COVID-19 crisis. With the project’s promotional support, commerce site SHOPEN is offering Serbian SMEs with a free platform to list their products, transitioning SMEs to online platforms.
A partnership with ICT Hub has yielded a series of communications and outreach with SMEs about doing business in a time of crisis. In fact, on April 8, an online panel gathered some of the most known e-Commerce players on the Serbian market, including successful SMEs and entrepreneurs who have been able to quickly adapt their business to the state of emergency.
The project also critically supports the National Bank of Serbia's efforts to strengthen e-commerce, online payments, and a cashless economy. Compared to 2018, the increase in the number of internet transactions in 2019 is up nearly 150%, and the increase in the value of these transactions is 92%, according to the National Bank of Serbia.
The number of internet points of sale increased for 54% of the population in one year.
“E-commerce in Serbia has been increased three to four times since the state of the emergency was declared,” said a representative of Direct Media United Solutions, a leading media system in southeast Europe.
“Online shopping has been recording an excellent growth, since it is perceived as the safest type of purchase at the moment,” said Mihajlo Ponjavic, CEO of SuperKartica (Super Card). “We know that all of us have to be ready for change that consumers will inherit from this state.” SuperKartica is a leading regional loyalty program and digital business with more than 1.2 million registered users and more than 150,000 mobile customers in Serbia alone.
This shift to online sales is helping SMEs generate revenue, retain their workers and even thrive while also providing the public with essential products they are unable to get safely and securely in person. In this way, technology and e-commerce are providing access to markets for SMEs and access to goods for consumers, for an overall more resilient system.
Closure of retail outlets and consumer isolation have significantly influenced the behavior of customers, who have turned to online shopping more than ever during this period. Even e-commerce giants, such as China, are seeing an increase in online shopping at the time of the pandemic, where 50% of consumers say they are buying products more frequently online that they would normally buy in stores, according to the Direct Media United Solutions. In Italy, e-commerce has grown by 31%, and in the U.S. the number of grocery applications installed has increased by as much as 218% daily.
While the pandemic is indiscriminately affecting the world, less resilient countries have borne a higher cost to livelihoods and economies. USAID CFG’s work on e-commerce has provided alternative options to get essential products to consumers, keep businesses open, and maintain employment, building Serbia’s resilience and overall defense against the negative impacts of COVID-19.