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Zorana Milidrag, President Of The E-commerce Association Of Serbia (ECS)

Prepare On Time To Survive The Next Big Wave

In order for you to achieve seamless e-commerce operations, it is necessary for it to be backed by a very complex and ordered system. That’s why we, as the E-Commerce Association of Serbia, work primarily to educate consumers on what expectations and requirements they should have of retailers, while we simultaneously educate retailers on improving the process

We can today speak about e-commerce as a traditional sales channel, because the circumstances of the pandemic resulted in both the number of retailers and consumers reaching, over the last three years, the kind of scale that would be expected to take ten years to achieve under normal circumstances, says E-commerce Association of Serbia President Zorana Milidrag speaking in this CorD interview.

One new trend is the symbiosis of sales channels, which is why we increasingly hear the term omnichannel, in reference to the providing of a seamless online shopping and customer service experience regardless of the sales channel. Likewise, the previous trend of huge growth in e-commerce is now being replaced everywhere around the world by an e-commerce stabilisation trend and the identifying of the right ratio for each retailer in terms of the percentage of sales they want to realise through digital channels and through physical channels, explains our interlocutor.

The European standard for the participation of e-commerce among represented retailers in key markets stands at between 20% and 30%, while ever more retailers are opting to pursue digital expansion and enter new markets with just one or two sales outlets while placing their focus on digital, such that this percentage then reaches up to 90%. “When it comes to discussing Serbia’s e-commerce market, the E-Commerce Association of Serbia is currently in the final stage of mapping and creating its latest report, while official National Bank of Serbia data show that 41.9 million payment card transactions were created online for the purchase of products and services in 2022,” says Milidrag.

This amount represents growth of 35%, or in excess of 10 million more transactions than in 2021. The total value of completed online payment card transactions leapt 51.24% compared to 2021, which brings us to a figure of 1.2 billion euros. It is estimated that payments by card account for approximately eight per cent of the total market, according to which we reach an unofficial market value estimated at around 15 billion euros for 2022, with the footnote that this is currently only an estimate, notes our interlocutor.

Who represent the strongest and weakest links in our digital business system and why?

– People are actually both the strongest and weakest links in digital business. I believe that this sounds contradictory initially, but digital business is actually a process that is both established by people and used by people. As such, I can state unreservedly that the strongest link is the increasing understanding of the benefits of e-commerce among consumers and the fact that they can make maximum use of e-commerce for all repeat purchases or exploring the market, even if they end up making the purchase in a physical store. A question that clearly imposes itself is why someone would today spend hours seeking something in physical shops when they can do it online in just a few minutes.

On the flip side, the weakest link is also represented by people – people who still think they can do business in the same way that they achieved success 20 years ago or, even more problematic, who think they can actually equate the development of their e-commerce channel with “the neighbour’s son will create an online shop type of operation for me”. Although I advocate that digital business isn’t nuclear physics, I must say that trivialising digital business brings companies more harm than good. When we mature as a market and start approaching digital transformation as the most important project for the future of companies, we will then have real change and understanding for the value of this new way of doing business.

To what extent are major platforms like Ananas, Shoppster and others really on the road to becoming our veritable homegrown Amazons?

– Personally, I have great respect for people who deal with marketplaces, as a form of e-commerce business. E-commerce is extremely complex in and of itself, and when we add more unknowns to that nonlinear equation, it becomes clear that only brilliant minds have a solution. Major global companies that engage in this type of business required more than ten years to achieve profitability, while in our country these companies are additionally struggling with the educating of small retailers who sell via their channels, the harmonising of various laws due to the complexity of the system, technology and the small market that doesn’t enable the scaling up of business.

If we, as a region, want a competitive market, we will have to create long-term regional cooperation in a form like that of CEFTA and open up to crossborder e-commerce. The countries of the region, as individual markets, are too small for serious development and real e-commerce capacities

As an e-commerce association, we strive to assist them through the educating of small retailers and the ‘Karavan’ project in which we tour Serbia nationwide, together with the Chamber of Commerce & Industry of Serbia, Ananas and MtS, while we will also be joined in the future by more relevant companies. The E-Commerce Association is currently dealing with the formation of taskforces that will have several key tasks, one of which will be the amending of the law to enable even simpler operations for these kinds of new business models.

In which sectors is e-commerce most strongly represented today, and where do you see great room existing for the further development of the market?

– E-commerce is currently most strongly represented in the sectors of fashion and technology, but I advocate the thesis that there’s nothing that can’t be sold via the internet – there are only poor presentations that cause mistrust and thus reduce one’s power to sell something. If individuals who have purchasing power today spend an average of five hours per day on their mobile phones, and the same number of hours spent browsing physical shops each month, or five hours a week watching TV adverts, the maths is clear: it is much easier to reach one’s customers via digital channels than any other way represented to date. It’s up to you to fight for some of that attention and to convert consumers.

I expect the next big wave of e-commerce development to come in response to the inevitable need to overcome the ever-growing problem of shortages of adequate workers. We are increasingly able to see physical operations becoming completely digitalised in their processes, so they require the minimum commitment from their human resources. This way of organising is the future, but such a form of operating a business requires time to harmonise all processes, data and technology. The ones that will survive are those that prepare on time and are ready for the next big wave. I spoke prior to the pandemic about the fact that companies need to prepare themselves for digitalisation because this is a process that cannot happen overnight, and that’s how it turned out: many companies didn’t succeed in adapting to the new situation and sustained great losses due to their lack of adaptability. Automation is important not only due to sales processes, but rather also due to logistics processes. Labour force problems will only be overcome by those that automate their logistics, data and sales in a timely manner.

You believe that it is partly also due to the efforts of the E-Commerce Association that we today have a better market and better laws and infrastructure, advanced retailers and more educated consumers. How important to this was cooperation with the state and how much was it down to cooperation between the actual stakeholders and their lobbying power?

– I believe that it can only be great for the individual over the long term provided that the overall situation is good. It is precisely on these foundations that the E-Commerce Association of Serbia emerged, as a body that can contribute to furthering cooperation between the private and public sectors, with the aim of advancing our market for all of us. The E-Commerce Association cooperates with businesses – both with its members and those who aren’t yet members but want to contribute to the development of the digital economy.

I believe that it can only be great for the individual over the long term if the overall situation is good. It is precisely on these foundations that the E-Commerce Association of Serbia emerged, as a body that can contribute to cooperation between the private and public sectors, with the aim of advancing our market for all of us

On the other hand, it is equally important to us that we have cooperation with all relevant ministries, and it has been demonstrated to date that this type of cooperation is essential for both parties, and we’ve always received great support and understanding. Other associations and non-governmental organisations, and the outstanding support of the media – without which we would not be able to educate the population – are also important to us.

People often think that they can’t change anything, but you’d be surprised by the power to change possessed by an individual and an organisation that actually tries to change something.

From the perspective of the ECS, what are the most important future changes to this market that you’d like to see? Are they in the domain of legislation or in the educating of retailers or consumers?

– The most important changes that we are working on as the E-Commerce Association of Serbia, together with our collaborators from the governmental and non-governmental sectors, relate primarily to the educating of consumers regarding the expectations and demands they should have when it comes to retailers, while at the same time we are educating retailers about the improving of the process. In order for you to achieve seamless e-commerce operations, it is necessary for it to be backed by a very complex and ordered system. A web shop represents a mirror of a company’s business. When some segment of a company’s business isn’t functioning, that will firstly be noticed through their web shop. That’s why education for all is essential to understanding how that background mechanism functions. A clock is just a “mirror” of a timepiece.

If we, as a region, want a competitive market, we will have to create long-term regional cooperation in a form like that of CEFTA and open up to cross-border e-commerce. Each of the countries of the region, as individual markets, are too small for serious development and real e-commerce capacities.

In parallel with the development of e-commerce, we have also seen the development of numerous courier services, both state-owned (like Post Express) and private. Alongside them, there are also global digital platforms for the delivery of food and goods. To what extent are these businesses related and how much do they contribute to the further development of e-commerce?

– E-commerce, or retail sales conducted via the internet, forms only one part of the digital ecosystem. Dealing with e-commerce to the extent that you consider it sufficient merely to establish a web shop is like arranging the window display of a physical shop without sorting out the range of products or hiring sales staff, and then also putting a curtain in front of that window display. Only those who pay equal attention to addressing all parts of the digital ecosystem will prove successful in e-commerce. Delivery is one of the five key elements of the digital ecosystem. It is actually believed that those with better services in terms of delivery and payment methods will have an advantage in the future.

Courier services develop in accordance with the needs of their clients, which is why we today have parcel machines and payments by card among some courier services. I must say that plenty of room still exists for the further development of courier services in our region, but the progress achieved in just a few years has been huge. Deliveries aren’t dependent only on courier services, but rather also depend on the packaging process of the vendor, the level of integration with the retailer and, of course, business volume. The customer will certainly be ever more demanding when it comes to digital, so retailers and courier services will have to work together to advance and satisfy those needs.

AUTOMATION

Automation is important not only due to sales processes, but rather also due to logistics processes. Labour force problems will only be overcome by those that automate their logistics, data and sales

DEVELOPMENT

Plenty of room still exists for the further development of courier services in our region, but the progress achieved in just a few years has been huge

MATURITY

When we mature as a market and start approaching digital transformation as the most important project for the future, we will have real change and understanding for the value of this new way of doing business