With more than 29,000 online stores, overall trade value passing $17.4 billion, and expected growth rate by 60% annually, Iran online business and e-commerce seems great opportunity for foreign, as well as local investors.
More than three decades of sanctions have not negatively affected Iran's attractiveness as an emerging market.The country has long been of geostrategic importance because of its central location in Eurasia and West Asia.
Iran is the second-largest economy in the Middle East and 18th in the world. The latest data from The World Fact book in 2016 show the Purchasing Power Parity of Iran at $1.4 trillion, which ranks second among other MENA countries, reads a report compiled by Lavan Marketing Agency.
Iran is very much in touch with the world via traveling and, more importantly, the Internet. While borders seem to be stricter from the outside in, most Iranian citizens have kept close contact with all the happenings in the world; Internet statistics are proof of that, showing an almost 53% Internet penetration rate in Iran as of 2016. Among all users, youngsters account for nearly 60% of the total.
According to an interview with Mohammad Javad Azari-Jahromi, the minister of ICT, 41 million people actively use 3G and 4G Internet. In the case of online businesses, the numbers are also fascinating. The emergence of new e-commerce websites and expansion of existing ones are an indication of this booming trend in Iran, which is of high interest to foreign investors.
As mentioned before, the fact that nearly 60% of Internet users are in search of products and services makes these numbers even more worthy of consideration. This has been a motivational factor for foreign investors such as Rocket Internet and its partner MTN to invest in online businesses such as Bamilo, Zoodfood and Snapp.
On the other hand, the fact that the native language of Iran is Farsi, not a broadly spoken language in the world, makes the online market unique to itself.
According to the latest data on the language preference of Internet users, nearly 70% of the content distributed and communicated in online platforms are in Farsi. To ensure high returns, this requires a more in-depth knowledge of this unique market in terms of its spoken language, and cultural and behavioral factors prior to making a large investment.
Iranians trust online shopping today more than before. According to the E-namad organization, which regulates online businesses, more than 29,000 online stores are operating in Iran and the overall trade value for these stores has passed $17.4 billion, and this number is expected to annually grow by 60%.
Instagram has 16-20 million users in Iran and is the most popular social network in the country. Mobile messaging apps are popular among Iranians and Telegram is the most widely used messaging app; as of September 2017, it had more than 40 million Iranian users
According to the National Center for Cyberspace, the total "reach" or view for the published content over 600,000 Farsi channels is close to two billion per day.
Due to restrictions and sanctions, Iranian users cannot use many global online services, so there are many local alternatives available in Iran. Some of these local versions are very successful, such as:
- Cafe Bazaar's app (local alternative for Google Play Store) has been installed on more than 32 million smartphones
- Snapp (local alternative for Uber) is downloaded more than three million times from Café Bazaar and working in Tehran and four other major cities in Iran.
- Aparat (local alternative for YouTube) is the most visited Iranian website, attracting 10.5 million video views per day
Divar is Iran's largest online-classified advisement mobile app, which has expanded to the neighboring country of Afghanistan. Divar has been downloaded more than 12 million times.
As Digiato anticipated Iranian startups, such as Digikala and Snapp would start business in neighborhood countries, like Iraq, Afghanistan, Pakistan and Armenia in new Iranian year, starting 22nd of March.
Source: financialtribune, dated 27.Jan.2018