E-Commerce In Iran: A Chance For Local Business Rebirth

(MENAFN- Mid-East Info) During the complicated situation caused by sanctions and global pandemic of COVID-19 the big e-commerce businesses in Iran created thousands of jobs and opportunities which can change the equation of the Economy of Iran. The global pandemic of Covid-19 started in 2019 made an unforeseen hard situation for all of the businesses all over the world including Iran and technology-based businesses were no exception.

Due to the mentioned conditions people started to consider the online platforms like Digikala as a lifesaver that could meet their new lifestyle requirements and needs. The inevitable changes in people's daily lifestyle due to the quarantine and social distancing destroyed many traditional and physical businesses. However, the bright side of the story is the fact that opportunities always emerge in limitations.

Due to the circumstances of staying at home, stores and markets were left empty and most of the sellers preferred to move their services to online platforms to fill the gap of face-to-face sales. They tried to choose well-reputed online platforms like Digikala. Although many sellers that were skeptical of this opportunity at first realized that they had no other choice.

Online sales were not only one of the main ways to mitigate the economic consequences of the pandemic during the prolonged lockdown, but they also saved traditional and local businesses from recession. It is fair to say that policymakers all over the world, including in Iran, are either unaware of or have underestimated the digital economy and its boundless potential.

The share of IT in the global economy's GDP is two to five percent, while the digital economy accounts for thirty percent. However, policymakers fail to recognize the“lost growth opportunity” and exhibit hesitation toward new technology, which primarily stems from“technophobia.”

Late entry into the modern economy reduces opportunities for development and limits the benefits of technology in industries. Nowadays, embarking late on the artificial intelligence journey can lead to losing the future of technology. In recent years, using smartphones for online shopping is getting more and more popular among Iranian people and mobile internet penetration in the country has reached more than 132%. The 91% share of smartphones in the online visits of Digikala, the most popular online store in Iran, shows that people are willing to learn about new platforms. A more important fact regarding this social business is that the beneficiaries here are not only the residents of big cities, but also villages and small towns. Modern businesses and e-commerce saved macroeconomics and even traditional and local businesses of Iran during the pandemic. In fact, the growth of e-commerce caused social justice to occur in online retail and local businesses found the opportunity to present and sell their products to millions of customers in the vast showcase of online platforms along with small and large businesses in the metropolises. Digikala; A window of hope

Local small and large businesses can access the market equally by registering on online platforms. Let's consider an example: Harris, a small city in the northwest corner of Iran, is home to Razieh, who makes a living by weaving carpets. The exquisite Iranian carpet is woven knot by knot by Razieh and her sister's skilled hands. A broker provides them with carpet threads, a loom, and a knitting pattern, returning a few days later to collect the completed carpet. Razieh and her sister earn two million tomans (approximately $30) per carpet. Two weeks later, they start the cycle again, weaving a new one.

Razieh has been weaving carpets since finishing primary school, which she left early. She is unaware of the global carpet market, how to sell her art, or how online platforms could transform her business. Platforms that aim to boost employment in rural areas help create economic value by preserving traditional production methods and enabling artisans to sell their products to customers across Iran. This support provides stable income opportunities and eliminates the need to migrate to big cities and face the associated challenges.

This is where we can help Razieh and others like her: by“building awareness about the business world.” Digikala embarked on this mission a long time ago.

As it was mentioned, small and large businesses have the chance to reach a wider range of customers across the country through the Digikala marketplace. In fact, Digikala has created a 24/7 market as wide as all over Iran. Zainab's food products and a rebirth

Zainab is a farmer's daughter who works on her father's small farm. Her father was destitute and, perhaps due to his lack of information and knowledge, was unable to maximize the potential of his farm or effectively sell its products. Consequently, he could not improve his financial situation.

He didn't know which products would grow best on his land or where to find the right customers for his harvest. In fact, Zainab's father was limited to traditional methods of planting and harvesting wheat and barley, as well as planting a few types of seedlings. He lacked reliable information about market prices and had to accept whatever price brokers offered. Today, Zainab has taken over her father's work after he became unable to continue farming. She is now recognized as a farmer, although initially, she was even less productive than her father. However, her situation changed, and her business was revitalized with the help of e-commerce. One day, Zainab realized that to grow and become more capable, she couldn't rely on the daily markets in her hometown. She decided to take a different path and eventually joined the broader market. During a trip to Tehran, she felt there could be a place for her vegetables and pickles, made from her farm's produce. At first, she thought about supplying individual shops, but soon she discovered a new way to sell her agricultural products: online platforms. Now, Zainab says that overcoming poverty isn't difficult when you have the necessary knowledge.

She believes that poverty does not persist because the poor do not work, but rather because inequality in education and knowledge makes the poor poorer. While it is true that technology raises many questions about the future of certain jobs, it is clear that flexibility and adaptability to new conditions are the keys to success. A strong understanding of the local economy, combined with access to central markets, can create powerful platforms-especially for independent individuals seeking to establish small businesses, discover their talents, and elevate the economy of their hometowns through engagement with the larger world. This time, progress is no longer confined to Tehran or other major cities. Thanks to the digital economy and e-commerce, where you live no longer matters. Women from all cities and backgrounds can build careers without worrying about finding a market for their products.

Without online sales platforms, local businesses would face even greater challenges given the evolving market conditions, increasing competition, changing customer preferences and needs, and the emergence of new technologies. Local businesses are not threatened by online platforms and new technologies themselves but rather by a lack of knowledge, skills, and willingness to adapt to change. Platforms like Digikala represent a new beginning for local economies. Zainab and others like her understand this secret, and Razieh and girls like her are on the path to discovering it. Supporting Digikala; supporting thousands of jobs

A review of Digikala's 2023 report reveals that 9,500 local sellers are currently offering their products and goods on the platform, marking a 40% increase compared to the previous year. Notably, nearly half of these sellers are women. This development represents a significant opportunity for Iran's economic growth and for increasing the digital economy's share in the country's GDP. Widespread access to mobile internet and smartphones has opened up numerous opportunities. Digikala itself has played a pivotal role in making smartphones accessible, even in remote areas, and has successfully delivered the latest technology to the farthest corners of Iran. The rise of various online sales platforms has also led to the establishment of specialized platforms for buying and selling goods and services online.

Not long ago, starting a retail business in cities required a significant amount of initial capital to rent or purchase a shop. Many producers had to sell their products to brokers because they lacked direct access to buyers. Fortunately, the situation has changed with the emergence of online platforms, which have significantly reduced the cost of starting a business. Online stores are a prime example of“social commerce” in Iran. E-commerce plays a crucial role in driving economic growth, particularly in countries like Iran, where the distribution system faces serious challenges. Meanwhile, the traditional market often operates with high profit margins that do not support a win-win model. This issue is especially evident in sectors like agricultural product supply and carpet weaving. For instance, carpet weavers receive only four percent of the profit made by sellers and brokers.

To address these inequities, modern platforms are essential to encompass everything from carpet weaving to agricultural products, traditional medicinal plants, arts, and food industries. Digikala, for example, has launched a special program for local businesses that focuses on both education and sales. Local business owners' products are stored for free in Digikala's warehouses and are made available to customers at the right time. Traditional products from various provinces are promoted on this and similar platforms. When families recognize the significant impact of this approach on their household income, traditional arts and practices will be preserved. These businesses will strengthen both the culture and economy of the country, providing essential support to many artists and producers. With its advanced logistics and processing systems, a platform like Digikala can play a vital role in securing a brighter future for the local economies across different regions of Iran.

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