It has been proven that education is the best way to positively influence market development. Business owners and key decision-makers must understand digital channels and start thinking about building their future through them.
The expansion of e-commerce has been exponential. We have talked with the President of the E-Commerce Association of Serbia, Zorana Milidrag, about the growth of e-commerce in Serbia, how suitable it is for all industries and sectors, the Association’s fourth anniversary and its plans and goals.
The pandemic has caused enormous growth in e-commerce in Serbia. What is the situation now when the pandemic is subsiding? Is e-commerce still on its upwards trajectory or stagnating?
In terms of changing customer awareness, the pandemic has managed to do more for the development of the digital economy in a year than the entire community has done in over five years. It is a positive development that the public, business and non-governmental sectors have also worked on their development and now that the customer is ready, the result is that we are seeing an expansion that has not stopped despite the pandemic subsiding. Every company that has created a good offer for its customers and all e-commerce services are still recording a continuous growth, two years after the start of the pandemic. There is also a segment of new retailers in the digital ecosystem who are also impacting the overall growth and development of the digital economy. I would like to say that e-commerce is not just the opening of a webshop. Those retailers who thought that that would suffice have not succeeded in developing this sales channel.
Which sectors have recorded the biggest e-commerce growth? Generally speaking, is e-commerce suitable for all industries and sectors?
E-commerce is suitable for all industries and sectors, as long as they find a way to offer their customers/clients superior service and they can feel the benefits of online shopping. If not, e-retail, as the safest segment of e-commerce, will not work for them. We have noticed that those companies/organizations who are going through digital transformation and have dedicated themselves to this process because they see it as necessary for further development, have recorded the biggest growth.
Companies adapting to digital transformation is the biggest challenge in the development of e-commerce.
As e-retailers were among the first to set up a digital ecosystem, they also experienced the greatest expansion. In recent years, new marketplaces have emerged, which are facilitating the expansion of e-commerce, and in addition to setting higher standards, they are a great opportunity for everybody who has not managed to set up their own e-commerce business as yet. Q-commerce applications, or food delivery apps, are another segment of e-commerce that has transformed the way we function. Actually, they are much more than that because they are moving in the direction of the development of horizontal supply and expediting last-mile delivery as we know it.
How well are people and companies adjusting to e-commerce? Does e-commerce require workers to develop new skills?
Companies adapting to digital transformation is the biggest challenge in the development of e-commerce. It is a common misconception that this requires a change in technological tools, when in fact, it is a change in employee consciousness and skills, a change in the company’s work process and the pursuit of greater efficiency. In this sense, the most important thing is to have the right leaders who will devise and implement quality change management. When you have the right leader, employees adapt better to change because they get the right understanding of the essence of that change. There are increasingly fewer people who are ready to educate themselves, solve problems creatively and approach change in an agile manner. And there lies the future! E-commerce is not nuclear physics and just like every novelty, it has its own principles which are teaching tools and of course, there is practice.
The Association is celebrating its fourth anniversary this year. How successful has the Association been in accomplishing the goals related to improving the digital ecosystem in Serbia?
We are very proud of the work and development of the E-Commerce Association of Serbia because has managed to become a self-sustainable, non-profit organization and has preserved its independence and integrity. We are here to primarily help our members, to create a better environment for their development and help them in all areas where they need development assistance. Additionally, we are fighting for the development of the entire e-commerce market, as we have demonstrated by representing the participants in the digital ecosystem who are not our members and giving out our annual awards to the best of them, irrespective of them being our members or not.
The E-Commerce Association’s Board of Directors consists of top experts from various segments of e-commerce who use all their resources and great energy to help achieve the Association’s goals. Our main goal is to create a favourable climate and prerequisites for business development. We have good partners in the public sector and non-governmental organizations and above all the media, which gives us additional wind in our sails to continue our fight. In the last four years, we have managed to help change laws, transfer the concept of e-commerce from the technological segment to business, form a stable operational and management team, led by the Association’s CEO, Marija Pasuljević, and build customer trust in the safety of online shopping.
What are the biggest challenges for the further development of e-commerce?
The biggest challenge for the development of e-commerce in Serbia is the size of our market and that is why we need to focus on developing e-commerce outside the borders of Serbia too. Given that we belong to the CEFTA region and that companies from Serbia and the physical world are developing their business in this region, it is realistic to expect that e-commerce should expand in this area with the ultimate goal being doing business worldwide. I worked on a project mapping geoblocking practices in the CEFTA region together with the E-Commerce Association of North Macedonia and it turned out that the biggest challenges are customs procedures and costs, followed by logistics.
We are very proud of the work and development of the E-Commerce Association of Serbia because has managed to become a self-sustainable, non-profit organization and has preserved its independence and integrity.
If we want to strive for the development of e-commerce in its full capacity, we will have to continue working on removing mapped barriers and enabling the uninterrupted movement of goods and services in this region. The essence of e-commerce profitability lies in access to the unlimited market and if we overcome this challenge, e-commerce traders from Serbia will fully comprehend the true potential of digital business. This project must be implemented by the governmental and non-governmental sectors together because it will benefit both of them and consumers too.
What is the current situation with the regulation of this area, i.e. how far have we come in that, and what else needs to be done to make the market as functional as possible?
The Law on Electronic Commerce, which was passed in 2019, stipulates the general provisions necessary for the smooth functioning of business and was a good prelude to the growth that awaited us in 2020.
The changes that await us now are stipulated in the new Law on Fiscalization. Given that e-commerce involves several forms of business such as e-retail, marketplace, dropshipping and pureplayer, we expect many challenges to emerge in drafting the Law on Electronic Commerce and its application. The E-Commerce Association has cooperated with the Ministry of Finance on drafting this law and the Ministry was very understanding about the objections they received from the business sector. I expect that this cooperation will continue when we see what needs to be adjusted in the law.
There is also a whole segment of unregulated shopping on social networks. In addition to this segment adversely affecting vendors who operate legally and has a negative impact on the state budget, it is also unfavourable to vendors in the long run who sell exclusively on social media. It is a matter of days before the Facebook algorithm will independently block such pages in our region. In that way, these vendors will not only their sales channel in a moment but also all the customer base they have been building for years. The goal is for all those people who do business in this way to understand, first and foremost, the damage they can sustain because it is very challenging to regulate this area with the help of inspectors. That is why it is important for both the Ministry and the E-Commerce Association of Serbia to educate them and even more importantly, for the media to show their support for this.
What are the E-Commerce Association’s goals and plans?
The E-Commerce Association of Serbia will continue to educate the entire digital ecosystem with a special emphasis on issues such as fiscalization, which is a current topic this year. We support the entire community when it comes to improving the conditions for facilitating digital business development. Furthermore, we are focusing on holding a large-scale e-commerce conference and giving out our annual awards for the best in digital business. It has been proven that education is the best way to positively influence market development. It has been proven that education is the best way to positively influence market development. Business owners and key decision-makers must understand digital channels and start thinking about building their future through them.