The Government has adopted the Electronic Commerce Development Programme in the Republic of Serbia, which is the first public policy document in the segment of e-commerce.
The Ministry of Trade, Tourism and Telecommunications has been working intensively for years on improving regulations, building consumer confidence, as well as educating vendors about e-commerce. We talked with the Minister of Trade, Tourism and Telecommunications, Tatjana Matić, about everything that has been done so far and the plans for the development of e-commerce in Serbia.
What specifically has been done so far, and what has contributed to the development of e-commerce in Serbia?
The Ministry of Trade, Tourism and Telecommunications has been primarily working on harmonization with the Acquis Communautaire in the segment of consumer protection, transposing relevant EU directives into the Consumer Protection Law, thanks to which we have made formal progress in joining the European Single Market and facilitated a high level of consumer protection.
In the strategic document called ‘2019-2020 Consumer Protection Strategy’, e-commerce is especially targeted and one of the measures mentioned in the document increasing the awareness of vendors about their legal obligations.
Certainly, the development and improvement of e-commerce and e-business in Serbia are some of the priority goals of the line Ministry. The new Commerce Law, amendments to the Law on Electronic Commerce, and the Law on Postal Services were also adopted. Also, following the proposal of our Ministry, the Government adopted the Electronic Commerce Development Programme in the Republic of Serbia, which is the first public policy document in the segment of e-commerce that prescribes a set of measures and activities, including consumer protection, logistics processes, online payments, cross-border trade. customs procedures, etc.
In parallel with legal and programme-related activities, in cooperation with USAID CFG, the Ministry has implemented the project titled “Strengthening E-commerce in the Republic of Serbia” which resulted in several activities implemented to boost people’s trust in this type of shopping, as well as to solidify the position of e-vendors when offering their goods and services online. Along with the media campaign, the E-commerce Consumer Guide was published, which educates people about their consumer rights on the Internet, as well as the E-Vendors Guide which is intended for both beginners and businesses that want to reorient to e-business or to add e-commerce as a new sales channel in addition to the existing offline sales. The guides are free and can be smartly and safely downloaded from the Ministry’s platform www.pametnoibezbedno.gov.rs .
We will continue to boost people’s trust in online shopping
How much has e-commerce affected the overall development of the economy so far?
The expected growth of e-commerce over the past few years experienced a revolution during the coronavirus pandemic, which saw a double increase in online sales and the number of online outlets. Thanks to the new laws regulating e-business, e-commerce and information security, it was possible to abruptly redirect many activities to the online environment, and as a result and despite the circumstances caused by the pandemic, society continued to function as did the economy to a large extent.
According to the data collated by the National Bank of Serbia, the number of electronic transactions in dinars, paid with debit or credit cards on the Internet jumped from 7 million in 2019 to 14.3 million in 2020, while the value of e-transactions increased from 17.8 billion dinars to 32.38 billion dinars. The number of virtual points of sale at the end of 2019 stood at 1,139 and grew to 2,013 in late 2020.
To what extent is the shadow economy present on the Internet and what is your Ministry doing to combat it?
It has been estimated that the shadow economy’s share in the national GDP is around 14.9%. The Ministry has been continuously working on informing and educating consumers to redirect them to buy from legal vendors, which is in their best interest since they will not exercise their consumer rights if they buy goods or services from unregistered individuals. In addition, the Ministry and its market inspectors are working on combating the shadow economy following the Commerce Law and the Inspection Supervision Law. One of the measures that have been implemented is the organized suppression of online advertising and the sale of goods by unregistered entities. We did this by searching online sales platforms, social networks and supervising postal operations to identify unregistered vendors and take legal action against them.
Also, the new Commerce Law authorizes market inspectors to conduct “covert shopping” and thus obtain the necessary evidence of illegal sales. The Ministry of the Interior provides us with support in this fight with its High-Tech Crime Department. In 2020 and the first quarter of 2021, 125 inspections were executed in this segment, and after violations of law have been identified, 44 requests for initiating misdemeanour proceedings were submitted, as well as two criminal charges due to illicit trade.
The expected growth of e-commerce over the past few years experienced a revolution during the coronavirus pandemic
The existing Commerce Development Strategy in the Republic of Serbia was valid until the end of 2020. Are you planning to have a new strategy?
A new Commerce Development Strategy in the Republic of Serbia, that will cover the period until 2025, is being drafted, along with an Action Plan, which should include an analysis of the situation and level of development of the commerce sector in Serbia, wholesale, retail and e-commerce and multichannel sales. The Strategy will draw parallels to the development trends in Europe, and will especially focus on the development of small and medium-sized enterprises.
How have the amendments to the Electronic Commerce and the new Commerce Law contributed to the development of online commerce in Serbia?
The new Commerce Law has introduced the concept of the electronic store and electronic platform, which have not been regulated in domestic legislation so far. A clear distinction is made as to who is the seller of the goods (webshop) and who is only the link between the consumer and the vendor (the platform as an “intermediary”). This is important from the aspect of consumer rights protection because it should be unambiguously clear to the buyer from whom they are buying the goods, with whom they are entering into a contractual relationship and to whom they can turn in case of product complaints. This does not exclude the possibility that the vendor, who owns the platform, will also be the seller of the goods, which means that they will assume all legal obligations related to the seller. Also, a special form of e-commerce – dropshipping – has been recognized and regulated, thus enabling the display of product prices in foreign currencies, as an important legal novelty, which additionally makes it easier for domestic vendors to make their offer available to foreign markets.
Are consumer rights equally protected during online and offline shopping?
The Consumer Protection Law prescribes the rights of consumers in both online and offline shopping, and it refers to the consumer’s right to ask for pre-contractual information, the right to complain, the vendor’s responsibility for the conformity of sold goods that lasts for two years, exercising rights under the agreed warranty, etc. However, it is important to point out that the key thing in protecting the rights of consumers in online shopping is the consumer right to change their mind and withdraw from the concluded contract within 14 days without consequences. The right to withdraw is valid for online shopping, while in offline shopping, it is only an option that the vendor does not have to agree to. The withdrawal right allows consumers to return the goods and get their money back without having to explain why. This is popularly called the “right to change one’s mind.” The vendor is obligated to refund the consumer within 14 days of receiving the consumer’s statement that they are withdrawing from the contract. The 2019-2024 Consumer Protection Strategy focuses on activities related to the development of consumer protection in e-commerce.
Are there any incentives for e-vendors to help them solidify their market position?
The importance of e-commerce is largely recognized, but lack of information on the establishment and management of an online store, which is especially pronounced among smaller retailers, being ignorant of the set of e-commerce laws and insufficient knowledge of customs procedure related to export are the main obstacles. The mentioned Guide for e-vendors is intended primarily for micro, small and medium-sized enterprises. The survey conducted among companies late last year, in which as many as 82% of the survey participants rated their web shops as equally important or more important than the traditional sales format, speaks volumes about how much the perception of e-commerce has already changed. Also, the Ministry has been participating in education for businesses which was organized by various vendor associations.
What else needs to be done, i.e. what will the Ministry do in the future, to contribute to the development and boosting the security of e-commerce in Serbia?
In the coming period, we will continue to carry out activities that are primarily intended to further enhance people’s trust in online shopping. We will conduct information and educational campaigns and intensify cooperation with the media, considering that the role of the media is crucial in the perception and understanding of e-commerce. Also, the plan is to continue with the implementation of a series of webinars for businesses on the topic of presenting and implementing legal solutions and promoting the practical use of the Guide for e-vendors in the following few months.