E-commerce in Serbia - from Golgotha to Freedom

23 March 2018

The accelerated development of the Internet following the increasing number of users of the global network brought an unimaginable opportunity to run private businesses based on innovations, good ideas and a large number of users, with inevitable interaction and constant improvement of the service.

shopping timeThe growth of e-commerce based businesses, due to unprecedented opportunities offered by the Internet, did not bypass Serbia. These businesses have gradually grown both in terms of users and profits, but they have also created a unique system of rules that has regulated almost all aspects of the service. They range from the manner in which e-commerce can be managed to protecting personal data and alerting users that illegal activities are not to be tolerated.

All this was long done before the state even became aware that such types of activities exist on the Internet. We might say that the state did not recognize the growing importance of e-commerce or simply did not understand its specifics. We do not know if it has ever become aware - while reacted mostly with mistrust or under the influence of harmonization with EU legislation, and passed regulations it did not understand or had the will and capacity to apply.

young woman at workUnfortunately, most of the new regulation remained at the principal level, and its only aim was to harmonize with European law containing insufficient insight into the situation on the domestic market and with the lack of understanding from those that should enforce it. That's why almost all market participants face a with trade inspections on a daily basis, with officers that don`t understand or do not want to understand the specificity of the online trade.

As has already been pointed out, most of this undeveloped e-commerce is based on user interaction, and with online "trader" not actually being a trader but a mediator between the subjects willing to trade.

Therefore, the basic principles of such a business would be: lack of obligation for prior monitoring of content created by users, obligation to cooperate with competent authorities in case there is a suspicion of illegal activity and obligation to act upon the court order.

State authorities, i.e. the inspection in practice behaves by ignoring the legislation that most closely regulate electronic commerce and sticks to these almost none related to the specificities of the area. As for traditional advertising, it implies the existence of two entities: an advertiser (one who wants to advertise his product or service) and a transmitter (the one who represents the distribution platform for the advertisement and who decides whether the message will be published). With online trading platforms the user is also an advertiser and a transmitter because he is responsible for the content of his account, and the service provider is only responsible later, and only if does not respond to a warning from the authorities. How does not affect the selection of the advertisement and does not initiate or change that message , it cannot even be responsible.

Classic and e-commerce is completely different in this region!

In the coming years, major changes in the area of classical trade are not expected in this region, and there are a number of reasons:

Competition in the sale of consumer goods (larger markets) is not large enough nor quality enough. We never had extended consumerism in these parts - it was created at the end of the past/the beginning of this century - meaning, for example, it was always normal to buy used things here.

All of abovementioned does not mean that e-commerce cannot grow more than the classic trade, but the tendencies of growth and development are covered by different priorities:

  • There is still a huge lack of confidence in e-commerce, and a large number of e-stores does not operate according to the classic trade and e-commerce legislation
  • Insufficient supply of quality products and services at competitive prices continues to lead to an increase in e-commerce abroad.
  • There are still major problems with the distribution costs, especially in the cross-border trade.

Licensing and getting in line

The ability of e-commerce licensing will enable a significant increase in e-commerce trust, implementing the following:

  • Enabling of a simple e-merchant check, as if it is operating according to the law
  • Checking whether and how well an e-trader performs his business
  • Easier to remove those e-merchants with poor business practices from the list of licensed e-merchants.

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

online shoppingYou might say, how is this possible, here, on Facebook - just type clothes, shoes and 1000 suggestions come out. You are right, some of the pages lead to registered businesses` sites that legally operate and pay taxes. But many others do business in the gray zone. These people do not sell their personal belongings, what they are entitled to, but goods in more sizes and patterns. And in case you buy something this way, you are losing the possibility of a refund or to file an official complaint. To be more precise, you are not entitled under the law, it all depends on the entrepreneurial spirit of the respective seller.

Shopping through Facebook is a risky category, because you are buying something "unseen", and there is no well-known nor reliable seller behind that purchase. A person (according to Serbian law) can be a trader, but only under certain conditions, however, this person is allowed to trade limited range of products, and that (attention!) - of agricultural products, game, fish and fungi. People who work handicrafts, and freelancers who offer their services can also do trade. When we come to retail and wholesale, trade is allowed only to legal entities and entrepreneurs.

From gray to black zone

So, we're already getting out of the gray area and entering the black zone. Perhaps the wishes of our well-known Internet apostles and gurus will be fulfilled and that a little more flexibility will be introduced into e-commerce. This would include the above-mentioned licensing of e-stores, but also accelerate development and enable security in both business and online shopping. As a country, so far we managed to keep ourselves aside for modern, non-traditional ways of doing business. Maybe it's time for our money to tell us where to go.