E-commerce condition changes in Serbia

19 April 2019

The Law on Electronic Commerce, adopted in 2009, represents the terms of the legal harmonization process with European legislation transposing the Directive on Electronic Commerce (Directive 2000/31 / EC). According to the law, it is considered that it largely followed and transmitted directive solutions. During the previous three years, since the Law was adopted, a need for a review of adopted solutions emerged in order to specify the norms and fit into the market and legal framework of the Republic of Serbia. Bearing all in mind, amendments have already been proposed and passed through the public debate.

woman holding credit card front laptop with shopping websiteTherefore, two proposals are expected to arrive at the Assembly, with the Draft Law on Amendments to the Law on Electronic Commerce defining predominantly long-distance contracts, Internet contracts, including the terminology harmonization with the Trade Law.

As for the Trade Law Draft, the attitude towards offline and online trade has been changed. Regarding the online trade, the Draft recognizes various business models and their specificities.

In relation to the current Trade Law and the Electronic Commerce Law, the new Trade Law Draft and the Draft Law on Amendments to the Electronic Commerce Law regulates e-commerce in detail, its models, and trader’s obligations as well.

This is primarily a reflection of the new electronic commerce trends and its expansion in the global and EU markets as well as in the domestic market. The ministry for trade and telecommunications has recognized the importance and the need to regulate this form of trade in more detail, primarily by improving the legislative framework in this area.

At the beginning of 2018 we still came across the following:
  1. The enormous mistrust in e-commerce: a large number of e-shops did not operate according to the law, classical or e-commerce.
  2. An insufficient offer of quality products and services at competitive prices
  3. Big problems in the cost of product distribution, especially in the cross-border trade segment.
What was needed to be done ASAP:

Enabling simpler e-trader background checks, whether he works according to the law and how is he doing business.

Otherwise, the lack of confidence in online shopping in Serbia has appeared in all previous research as a key factor of insufficient development of this area.

And at about the same time, sales of goods on Facebook and Instagram completely exploded. Despite the fact that purchasing of goods through Facebook is characterized as a risk category in the Internet trade - because there isn’t a reputable and reliable seller behind it. So far, any person has been able to do online trade, but only under certain conditions. In the case of retail and wholesale, only legal entities and entrepreneurs were allowed to trade.

When are we leaving the gray zone?

For years, we have been searching and waiting for one small traders' desire to come true - to incorporate a little more flexibility into e-commerce. This would speed up the development and enable security in Internet shopping and the business itself.

It may be encouraging that the Trade Law Drafts are working this time in close co-operation with the economy. The Working Group was composed of the members of the Chamber of Commerce and companies around it, the National Alliance for Economic Development, as well as the informal group of information society service providers, i.e. the biggest names in the e-commerce field.

Among other things, for the first time, we have seen the concepts of electronic store, electronic platform in the proposals, and the most common forms of electronic commerce, such as sales via an electronic shop, trade through an electronic platform that connects consumers and traders (and provides payment and delivery services ), as well as dropshipping.

E-commerce is recognized, and this time the law recognizes that the one who sells goods does not have to have it physically in stock, plus the law also predicts how the dropshipping trade pattern should take place.

What kind of habits do we encounter in e-commerce?

In recent years, the number of electronic transactions has increased in Serbia, as well as the volume of sales and e-commerce on domestic websites. Last year, more than 30 percent of all Internet users in Serbia bought something online. In the interest of further development, it is necessary to increase the confidence of citizens in this form of trade and prevent gray economy emerging in that area, is been said in the Ministry of Trade, which is preparing new and more efficient legal solutions.

shopping online conceptMore than 45 percent of all Internet users in Serbia never bought anything online. For this and all other reasons, traders rightly feel that they need to gain customer confidence and to legally regulate this area.

With the amendments on the new Electronic Commerce Law, precise definitions are introduced on electronic stores, platforms and dropshipping, but also advantages for customers who get the opportunity to return the purchased product via the internet within 14 days without any explanation.

The Ministry of Trade, Tourism and Telecommunications emphasizes that when you are shopping in a regular store, you have the opportunity to see the product, try it, feel it, and when buying online you do not have this opportunity. Therefore, the buyer should not pay for the return of the goods up to 14 days from the date of purchase, without any explanation.

However, although experts claim that electronic sales growth varies up to 35 percent a year, it seems that traders still do not recognize the importance of online shopping and find that its introduction is expensive.

Additionally, lots of courier services are seeing a vast increase in shipments ordered over the Internet, which is reflecting their business also. Transportation of shipments in the field of electronic commerce last year was accounted for up to 25 percent. That's why more couriers are hired and new delivery zones are opened.

The Unpleasant Truth

Companies that do not operate online have no future in the market.

Over the next couple of years, online trade will collect billions of dollars, and as we predicted last year, many world trade giants will abolish retail outlets and switch to cheaper online sales. Enormous global growth of e-commerce is anticipated, and this simply must be a signal for all traders and businesses from the territory of the Western Balkans to "catch that train" as soon as possible, so they wouldn’t justify later failures with the familiar “ah, that was beyond us” phrases.