Beeline to Belarus online

By bne IntelliNews January 15, 2015

Ben Aris in Moscow -

 

Frustrated with limited choice and backward stores, the increasingly tech-savvy Belarusians are doing more of their shopping online. But with $3bn of hard currency flowing over the border as a result, the cash-strapped government in Minsk is unhappy with its citizens’ new shopping habits.

As with everywhere in Eastern Europe, the Chinese e-commerce giant Alibaba Group has been stealing a match on other online retailers. It reports that Belarus now ranks as its fifth largest overseas market, outspending even the US and Canada on "Single's Day" – a Chinese anti-Valentine's day that celebrates single people on November 11 and is one of the biggest shopping days in the world. This year Alibaba made $9.3bn in sales on Single's Day, with Russia spending the most of all its overseas customers.

Internet usage is growing fast in Belarus. The state has set up a highly successful technology park and the republic is earning good money from home-grown companies writing software for overseas clients. According to research by the Analytic Centre of the Presidential Administration, as of autumn 2014, 62% of Belarusians used the internet, and around 50% of them were mobile internet users. With the volume of online sales rising fast, last June the online payment provider PayPal established operations in Belarus to make online shopping even easier.

A tale of two rubles

The Russian ruble crash has been a boon for Belarusians, who have rushed to buy electronics, consumer durables and cars with their Belarusian rubles after the Russian currency’s value collapsed at the end of 2014. And importing their purchases back home has become even easier after the last of the border restrictions were removed on January 1 as the Eurasian Economic Union came into being.

Foreign holidays have been in particular demand, as the falling value of the Russian ruble has forced Russians en masse to cancel their now increasingly costly foreign trips; Russian tourist agencies have slashed prices in response, and for Belarusians tickets to exotic locations have suddenly become much more affordable and they were snapping them up in December.

But it’s still early days for e-commerce in this still-isolated ex-Soviet state, with just one in five Belarusians shopping online and one in 20 shopping overseas, according to a study by MASMI, a British market research company.

And with only around $5bn in foreign currency reserves at hand, the Belarusian government is not happy with its citizens spending such amounts of hard currency overseas; in September, President Alexander Lukashenko threatened to introduce a special tax to curb such shopping habits. "[The West] criticises us for being a poor country, but our people send $3bn abroad annually and import goods which we also produce ourselves,” the president said. “So I have already ordered a decree – if you go abroad, you pay a $100 fee and then you are welcome to buy things. [This way] people would go to our shops and buy our refrigerators instead of carrying them from abroad."

 

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