{"id":7885,"date":"2016-04-15T09:00:00","date_gmt":"2016-04-15T03:00:00","guid":{"rendered":"https:\/\/kglabs.org\/kyrgyzstan-digital-economy-future-knews-2016\/"},"modified":"2016-04-15T09:00:00","modified_gmt":"2016-04-15T03:00:00","slug":"kyrgyzstan-digital-economy-future-knews-2016","status":"publish","type":"post","link":"https:\/\/kglabs.org\/ru\/kyrgyzstan-digital-economy-future-knews-2016\/","title":{"rendered":"Kyrgyzstan&#8217;s Digital Economy Future \u2014 A 2016 Reading"},"content":{"rendered":"\r\n<p class=\"wp-block-paragraph\">In April 2016, KG Labs gave a presentation at Knews on what the digital economy in Kyrgyzstan was actually doing \u2014 not the targets in any strategy document, but the patterns visible in the consumer behavior, the platforms people were using, and the gaps the platforms were not filling.<\/p>\r\n\r\n\r\n\r\n<aside class=\"needs-photo\" style=\"border:1px dashed #61B431;background:#F9FAFB;padding:14px 18px;margin:24px 0;font-family:'JetBrains Mono',monospace;font-size:12px;color:#565E6E;letter-spacing:0.04em\">[NEEDS PHOTO] Aziz Soltobaev or KG Labs team presenting at Knews, April 2016 \u2014 to anchor the talk<\/aside>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Three years into widespread 4G LTE coverage, the country had crossed the threshold where most internet use was mobile and most mobile use was social. What it had not crossed was the threshold where the volume of activity translated into a domestic e-commerce market with comparable scale to neighbors.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">What the global reference cases looked like in 2016<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Three companies framed the global discussion at the time: Amazon in the US, Alibaba in China, and Rakuten in Japan. China&#8217;s market in 2016 was the relevant comparator for any country trying to read what mobile-first e-commerce looks like in practice. Russia, the closest large market by language and logistics, was being eaten by Chinese cross-border platforms \u2014 Aliexpress in particular. Data Insight had estimated the Russian e-commerce market grew 16% in 2015 to about 650 billion rubles. Cross-border purchases were a large share of that growth, and AliExpress was reaching a Russian audience 24 times larger than Ozon.ru.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">What had pushed Aliexpress&#8217;s Russia volumes up was a delivery-time compression \u2014 from about seven days to about three \u2014 driven by the Russian Post operation. The next step, signaled in 2016, was a Russian-language voice-translation interface that would let buyers and sellers communicate without typing.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">That compression reframed the competitive question for Kyrgyzstan. Russian Post can deliver to Bishkek, Osh, Naryn and Karakol on roughly the same calendar as it delivers within Russia. A Kyrgyz buyer ordering from Aliexpress receives faster than from a domestic Bishkek e-shop in many cases. There is no domestic catalog with comparable depth, no domestic search behavior to keep buyers on Kyrgyz pages, and no domestic payment rail that meaningfully reduces the friction of choosing local.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">Where the local trajectory went<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The 2003\u20132013 history of Kyrgyz e-commerce reads as a slow institutional warmup. Postal-code work began in 2003. The customs code was updated in 2004. The first dedicated Kyrgyz e-commerce platform appeared in 2005. By 2006 the Kyrgyz Post had taken on settlement for online orders. The early classifieds-style platform diesel.elcat.kg was the active venue for direct selling between 2005 and 2012.<\/p>\r\n\r\n\r\n\r\n\r\n  Kyrgyz e-commerce milestones, 2003\u20132016\r\n  INSTITUTIONAL WARMUP, THEN A FORK INTO MESSAGING\r\n  \r\n  \r\n    2003Postal codes\r\n    2004Customs code\r\n    2005First ecom platform\r\n    2006Kyrgyz Post settlement\r\n    2005\u20132012diesel.elcat.kg active\r\n    2012Cross-border &gt; domestic post\r\n    2013Social-network trading dominant\r\n    2016Conversational commerce\r\n  \r\n\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">In 2012, the country saw its first cross-border package volume comparable to domestic post. By 2013 social-network trading had passed website-based trading: Instagram, Facebook, and a thicket of Telegram and WhatsApp groups had become the primary channel where small Kyrgyz sellers reached buyers. By 2016 the global term <em>conversational commerce<\/em> \u2014 selling through messaging \u2014 described what was already the dominant form of small-merchant retail in Bishkek.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">What did not happen in parallel: payment infrastructure adapted to that channel, regulatory frameworks for cross-border duties, address standardization, and any consolidated Kyrgyz e-commerce platform with the catalog depth to retain buyers domestically.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">The cross-border drain<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The recurring observation, by 2016, was that money was leaving the country through the digital channel and not coming back through it. Apple Store and Google Play purchases moved Kyrgyz consumer dollars to companies in California and Belarus. Wargaming alone \u2014 a Belarusian company employing Kyrgyz developers, behind World of Tanks \u2014 was paying about 4 million dollars annually in tax to the Cyprus jurisdiction it was registered in.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The over-the-top (OTT) messaging category is the same shape. WhatsApp, Viber, and Telegram replaced the SMS revenue and inter-country call revenue that mobile operators in Kyrgyzstan had built into their cost models. The operators kept investing in the network. The communications revenue migrated off it.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The harder question, beyond consumer leakage, is whether Kyrgyzstan can move from being a market for digital products to being a producer of them \u2014 a knowledge economy in the precise sense, where the country exports services and IP rather than just consuming the imports. The 2016 talk closed on that question. Eight years later the question is still open, with more evidence on both sides than there was in 2016.<\/p>\r\n\r\n\r\n\r\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><em>Source: KG Labs presentation at Knews, April 2016. Original Russian publication at knews.kg\/2016\/04\/15\/budushhee-elektronnoj-ekonomiki-kyrgyzstana, mirrored at kglabs.org\/knews-future-kyrgyzstans-digital-economy.<\/em><\/p>\r\n\r\n","protected":false},"excerpt":{"rendered":"<p>In April 2016, KG Labs gave a presentation at Knews on what the digital economy in Kyrgyzstan was actually doing \u2014 not the targets in any strategy document, but the patterns visible in the consumer behavior, the platforms people were using, and the gaps the platforms were not filling. [NEEDS PHOTO] Aziz Soltobaev or KG [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[266],"tags":[],"class_list":["post-7885","post","type-post","status-publish","format-standard","hentry","category-digital-public-infrastructure"],"translation":{"provider":"WPGlobus","version":"3.0.2","language":"ru","enabled_languages":["en","ru"],"languages":{"en":{"title":true,"content":true,"excerpt":false},"ru":{"title":false,"content":false,"excerpt":false}}},"_links":{"self":[{"href":"https:\/\/kglabs.org\/ru\/wp-json\/wp\/v2\/posts\/7885","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kglabs.org\/ru\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kglabs.org\/ru\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kglabs.org\/ru\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/kglabs.org\/ru\/wp-json\/wp\/v2\/comments?post=7885"}],"version-history":[{"count":0,"href":"https:\/\/kglabs.org\/ru\/wp-json\/wp\/v2\/posts\/7885\/revisions"}],"wp:attachment":[{"href":"https:\/\/kglabs.org\/ru\/wp-json\/wp\/v2\/media?parent=7885"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kglabs.org\/ru\/wp-json\/wp\/v2\/categories?post=7885"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kglabs.org\/ru\/wp-json\/wp\/v2\/tags?post=7885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}