Coronacrisis boosts e-commerce in North Macedonia as shopping habits change

Coronacrisis boosts e-commerce in North Macedonia as shopping habits change
By Valentina Dimitrievska in Skopje February 25, 2021

The restrictions on movement and fears of spreading the coronavirus have changed people's habits in North Macedonia, leading to increased online shopping and payment of bills online, Nina Angelovska, co-founder of the country’s leading e-commerce company, Grouper.mk, says in an interview with bne IntelliNews.

Grouper.mk was launched as a startup company in 2011, when it was the first platform for group discounts in North Macedonia, a small Balkan country with a population of 2.1mn. Now it serves over 200,000 customers in cooperation with over 3,000 companies that sell their products and services online.

“The pandemic really opened up an opportunity for e-commerce that has never existed before,” Angelovska, a former finance minister (2019-2020) in the Social Democrat government of PM Zoran Zaev, tells bne IntelliNews

In 2016, Angelovska was recognised as one of the 100 Female Founders in Europe, a list composed by the German startup magazine The Hundert. In 2018 she was named on the Forbes 30 Under 30 in e-commerce and retail for Europe list. In 2019 UNCTAD recognised her as one of the seven global advocates for Women in eTrade. She is also the president of the first Macedonian E-Commerce Association, which was set up in December 2017.

The growth in e-commerce during the pandemic was global, but progress varied between countries. Angelovska notes that some developed countries, with a rich e-commerce offer and whose populations have a high level of digital skills, managed to achieve a huge growth in e-commerce in just a few months during the crisis, which under normal circumstances would have taken three to five years to achieve, but that the crisis also opened up opportunities for faster development of e-commerce in North Macedonia. 

However, not all companies saw immediate benefits. “Regarding Grouper, although it is an online e-commerce company, somehow the automatic thought is that we have had growth during the crisis, but it was not the case,” she says.

The reason was, as she explains, that the travel and service sectors’ offer have a dominant share in Grouper’s revenues, and these sectors were the most affected by the crisis, so the company saw a significant decline in revenues with the onset of the crisis.

Adapting quickly

“As agility and quick adaptation are our strengths, ad-hoc campaigns were constantly launched to cushion the impact — such as the 'Stay Home Stay Smart' campaign, which offered over 100 online courses in collaboration with foreign providers, which attracted great interest and sales,” Angelovska says.

The other notable campaign was Destination Macedonia which is usually organised every year in October, but in 2020 it started in July and offered about 100 hotels across the country at promotional prices, and achieved excellent results, according to Angelovska.

A new project, Grouper Food or #HranaDoDoma, has been joined by about 30 restaurants so far, and the number is constantly growing and now customers can order food to be delivered to their homes through Grouper.

“We also launched Grouper Shopping Mall, our new project that incorporates 10 years of experience in online sales and marketing and actually represents the best of e-commerce and digital marketing,” Angelovska notes.

She explains that during 2019, Grouper worked dedicatedly on the development of the marketplace platform, which was launched immediately after the imposition of COVID-19 restrictive measures.

“Timing in business is very important. In COVID-19 conditions, the number of new companies that opened their stores in Grouper Shopping Mall was growing every month, something that would probably go much slower if we were not in this situation,” according to Angelovska.

She believes that the solution that Grouper is offering is the simplest, fastest and cheapest way for any company that wants to open a new sales channel and gain new customers — something that every company needed in the crisis.

“We offer practically all services that companies need and we are putting them completely on-board. Their only responsibility is to take care of their online store, track orders, to process ordered products, update inventory and of course to invest in the promotion of their online store,” Angelovska states.

So far over 100 companies that joined the Grouper Shopping Mall and opened their own e-shops now have a new sales channel with an online presence and access to new potential customers.

“In fact, the challenges of the pandemic worked most for the benefits of those companies that were willing to adapt quickly,” Angelovska says.

Huge growth of online transactions

Angelovska cites the latest central bank data on payment statistics, which showed an annual growth of online transactions with domestic payment cards to domestic online points of sale in North Macedonia of 173% in the third quarter of 2020.

In the third quarter, the value of transactions made with domestic payment cards to local e-traders amounted to €43.5mn. In the first nine months of the year, the value was €117.3mn, which is an increase of 123% compared to 2019, when the value was €52.7mn, Angelovska says.

Further citing data from the statistics office, Grouper’s co-founder says that 40.1% of individuals with internet access made online orders and purchases in the last 12 months compared to 36% in 2019. In 2017, only 20% shopped online. However, it should be noted that the statistics office data refer to the first quarter of 2020, when the survey was conducted, which means that they were collected before the start of the pandemic.

Regarding the type of products and services, Macedonian e-shoppers, like other Europeans, mostly buy clothes and sports equipment online, Angelovska says, citing a report on e-commerce development in 2020 published by the Macedonian E-Commerce Association.

The report titled "Analysis of the progress of e-commerce in the 2017-2019 period with special reference to the impact of COVID-19 on the development of e-commerce in 2020” showed that during the coronacrisis, clothes and sports equipment are still the most purchased categories online, but with reduced dynamics to some extent.

The categories of hotels and other accommodation, event tickets and other travel arrangements showed a significant decrease as a result of COVID-19. On the other hand, the biggest ramp-up in online shopping is in food and daily use products, Angelovska says.

Habits for paying online bills for electricity, water and telecommunications services have also changed significantly.

Lower prices, free delivery — key factors for online purchases

Asked about future trends, Angelovska states that online orders have increased under the influence of COVID-19, but the main question is whether e-shoppers will continue to buy online at the same pace even after the crisis.

In a survey of 2,800 e-shoppers, 37% said they had increased their online shopping volume since the start of COVID-19, and 76% said they would continue to shop online at the same pace as during COVID-19, Angelovska says.

The main motivation factors for online shopping, as Angelovska says, are lower prices and free delivery. Additional reasons include saving time, the flexibility to buy anytime, anywhere, and to buy more safely during the COVID-19 pandemic.

The analysis was the basis for the association’s recommendations to the authorities on ways to accelerate the growth of e-commerce in North Macedonia. The recommendations concern education, awareness raising, strengthening digital skills, facilitating administrative procedures, activities to address the shadow economy, introducing incentives and facilities for e-commerce as well as increasing non-cash payments.

"The recommendations are intended to serve as a guideline for government institutions, NGOs, international institutions, donors and funds and other key stakeholders that are part of the e-commerce chains or are willing and able to contribute to the elimination of barriers, creating a favourable environment for the development of e-commerce and accelerating its growth," Angelovska explains.

The Macedonian E-Commerce Association was established three years ago to create a basis for the future of e-commerce in the country and to unlock its potential.

“We have achieved significant results — we have raised awareness of the importance and potential of e-commerce, we have contributed to facilitating the path for e-commerce, education and much more,” Angelovska says.

She adds that the association cooperated with the competent government institutions on the regulation and facilitation of some administrative processes, and also with international organisations with which it joined forces to launch several projects.

“One of those projects is the newly launched ‘E-commerce for all’ platform (Ecommerce4all) which summarises all information for starting and operating e-commerce in one place, which was implemented with the support of USAID through the Business Ecosystem Development Project,” Angelovska says.

“The association continues to work on its plans this year together with all stakeholders, committed to put the transformation into a digital and smart society in the fifth gear, as it means a society that provides greater equality, more opportunities, greater fairness as well as faster, greener and sustainable economic growth of our country,” Angelovska underlines.

Biggest challenge for online shopping

The analysis conducted by the e-commerce association showed that the biggest challenge for the sector is the low level of digital skills among the population, but another issue is finding suitable staff, Angelovska says.

The findings of the survey indicated that companies that anticipated the importance of digitalisation, preparing themselves for innovation and transformation even before the pandemic, made the most of their potential.

e-retailers consider the barriers to the development of e-commerce are: low level of consumer awareness for online shopping (79%); distrust in online shopping (79%); low level of digital skills among customers (65%); and, unfair competition from unregistered traders and the shadow economy (55%).

These are followed by banking conditions and e-commerce procedures (39%); payment system and insufficient use of payment cards (31%); small supply on the market by domestic companies (26%); and banks' high fees for online payments (24%); with security concerns in the last place on the list (23%).

“In general, I would say, that not only when we talk about e-commerce, but also about digital transformation in general, we failed to capitalise more on opportunities, due to the unpreparedness and weaknesses we have in the system, such as low level of digital skills and slow adaptation to digital solutions,” Angelovska says.

She underlines that COVID-19 brings the existing weaknesses into the spotlight and now it is crucial to work on overcoming these flaws at a speeder pace in order to accelerate the digital transformation.

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