The onset of the pandemic has prompted a rethinking of the usual ways of interaction between people. E-trade is gaining momentum as a channel for safe and effective communications between businesses and the public.

The e-trade trend started before COVID 19. According to UNCTAD estimates, in 2018, the contribution of sales through electronic platforms was 30% to global GDP. Today, the role of "centers" of e-trade is performed by the United States and China, where the largest players, Amazon, Aliexpress and Ebay, operate. Numerous international organizations and think-tanks describe e-trade as an opportunity to save jobs and reduce costs for small and medium-sized businesses.

With the introduction of a nationwide quarantine in different countries, interest in e-trade has begun to grow: over the past six months, more and more Internet users are interested in opportunities to buy goods and services online (Fig. 1).

The growing popularity of e-trade is also noticeable in Kazakhstan (Fig. 2). According to estimates, the volume of retail sales via the Internet in the country increased by 150% (by the beginning of the year).

Several large regional platforms are already operating in the local market: Chocofamily holding, Flip, a Karaganda-based online store, branches of Kaspi Bank, such as Kaspi store, Kolesa, Krisha and several foreign ones: Lamoda, Wildberries, Olx, etc. In line with the background of the annual reports of the Ministry of trade and integration, it seems that the sector is growing and developing.

But e-commerce is still a "black box" in Kazakhstan. The key problem that has yet to be solved is to understand what e-trade consists of. According to the EEC report on the development of e-commerce, one of the barriers to the development of the sector is a weak conceptual framework.

To date, only a few paragraphs in the Law on conducting trade activities and the Tax code are devoted to regulating and defining e-commerce. However, the established definitions differ from the international definitions of the WTO ("production, distribution, marketing, sale or delivery of goods or services through electronic channels") and the OECD ("trade in goods and services that were either ordered through electronic platforms or received through them").
In Kazakhstan's interpretation, “e-trade is an entrepreneurial activity for the sale of goods to individuals, carried out through information technology through an online store and (or) an Internet platform, while simultaneously meeting the following conditions:

•    registration of transactions for the sale of goods is carried out in electronic form
•    payment for goods is made by cashless payment
•    the presence of its own delivery service for goods to the buyer (recipient), or the presence of contracts with persons engaged in cargo transportation services, courier and (or) postal activities”.

This definition describes e-trade only from the point of view of the state as the main tax collector, and the question of the fairness of the selected criteria remains open. Perhaps due to the strictness of these conditions, only 600 enterprises are listed as taxpayers of e-trade, among which there are no companies whose activities would be considered as e-trade by the definition of the WTO or the OECD.

Also, there is no clear division of activities that distinguish e-commerce within e-trade, determining who are the participants of the ecosystem and what ways of interaction between business and consumer relate to e-trade.

The importance of a well-developed conceptual framework is obvious: without it, it is impossible to develop a methodology for evaluating e-trade and conduct market analysis (which are also absent in Kazakhstan). Their absence, in turn, can reduce the quality of the proposed measures and complicate cross-country comparison.

Among the recent instructions of the Head of state was the revision of the “Digital Kazakhstan” program. It should be used as an opportunity to work on definitions and refrain from wanting to develop new recommendations. As the Russian proverb says: "how you name a boat, is how it will sail".

Sources:
1.   UNCTAD. 2018.
2.   EEC. 2019. “Report on the development of digital (Internet) trade”.