18 November 2017

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A VIRTUAL MARKET FOR REAL GOODS

The digital trading hub of Azerbaijan to introduce a completely different level of trade relations

Author:

01.11.2017

Interest in the production of various export products has increased noticeably thanks to the post-oil reforms in Azerbaijan. People returned from Baku to native villages, began cultivating the land, developing their own craft. But if large companies can access foreign markets independently, small and medium-sized businesses need assistance in this case. This mission was entrusted to the Center for Analysis of Economic Reforms and Communications (CAERC). Thanks to the state-of-art computerized system, now the entrepreneur needs to spend just a couple of hours to conclude a profitable transaction.

Within a relatively short period, Azerbaijan has made a major breakthrough in modern electronic commerce. The country can well pretend to be a regional leader in this sector too, for which all prerequisites are being created. More details were revealed at the international conference "Digital trading hub of Azerbaijan: prospects for development". Region Plus was one of the media sponsors of this event.

 

Alibaba of the region

The portal azexport.az has been managed actively by CAERC for almost a year now, since December 2016. The global mission of the portal, as its name suggests, is to expand Azerbaijan's export capabilities, to provide information on locally produced goods, and to be a profitable platform for their sale in foreign and domestic markets.

The mission achieved quite impressive results during the first nine months of operation: Azerbaijani producers received production orders for a total of $355.8 million. At the same time, the distribution of orders by countries was as follows: Russia - 18.2%, Turkey - 6.7%, Ukraine - 6.3%, India - 4.9%, the United States - 4.6%. In general, orders are received from 60 countries of the world. The most interesting ones concern the production of hazelnuts, apples, cucumbers, tomatoes and other fruits and vegetables, cottonseed oil, various types of beverages and furniture. At the same time, the competitiveness of some goods is estimated as high enough due to the devaluation of manat.

Last month, Azexport presented the tenders and orders announced on international electronic platforms and corresponding to the interests of Azerbaijani entrepreneurs. In other words, local businessmen will now be able not only to find buyers for their goods and services, but also to understand and analyze the demand in other markets.

Integrated with the most popular electronic trading platforms, Azexport.az makes Azerbaijani products available to potential buyers anywhere in the world. So, along with Alibaba, Azexport is also integrated into such popular online sales portals as All.biz, TradeKey, Amazon, Agroserver. Large companies and organizations such as DHL, Fedex, PayPal, 2Chekout, Microsoft, and the United Nations Development Program (UNDP) also support azexport.az.

The portal has managed to gain popularity and received the status of Golden Supplier on Alibaba.com. Moreover, Alibaba on its official page posted an article with a presentation on Azexport as an illustrative example of successful cooperation.

From the very beginning, Azexport has had ambitious plans to turn into Alibaba of our region. The launch of the Digital Trading Hub (DTH), currently operating as one of the sections of Azexport, is one of the steps taken in this direction. DTH was established under the presidential of Ilham Aliyev, dated February 23, 2017 "On additional measures on strengthening Azerbaijan's position as a digital hub and the expansion of foreign trade operations."

 

The model of cooperation

So, what is the Digital Trading Hub and why are there great hopes in the development of trade relations? According to Elkhan Mikayilov, the head of sector under the Advisor to President on Economic Policy and Industry, DTH is a new stage in Azerbaijan's integration into international trade, and new trends require the transformation of Azerbaijan into a non-spatial regional trade hub.

As noted Vusal Gasimly, Executive Director of the Center for Analysis of Economic Reforms and Communications, the Hub has become the first and very successful model of cooperation between the state and private sector in the post-Soviet space. It will significantly expand the export potential for Azerbaijani products and increase the flow of direct investments into the country. Also, DTH plays an instrumental role in terms of creating a digital space along the Great Silk Road, as well as being a single European electronic space. "Mutual recognition of signatures between the EU and Russia, as well as the MOUs signed for the development of cross-border electronic economy will strengthen the digital trade position of Azerbaijan." Currently, negotiations with China on the development of a digital platform along the Silk Road are underway. It is also an important institution for the development of electronic trade in the entire Muslim world," said V. Gasimli. He reminded that recently, the Digital Trade Hub of Azerbaijan signed an agreement on cooperation with ISESCO, which opens doors for Azerbaijani exporters to access the trade platforms of 50 Muslim countries. "We believe that Azerbaijan can establish electronic contacts with those countries that for a number of political or economic reasons do not have opportunities to do so through bilateral contacts," added the executive director of DTH.

By the way, memorandums on cooperation between the Center for Analysis of Economic Reforms and Communications of Azerbaijan and a number of well-known companies (e.g., GazinformService of Russia, Asseco Data Systems of Poland, and OrientSwiss of Switzerland) were signed during the conference.

 

A "single window" into the trade world

In essence, DTH is a multifunctional platform that primarily acts as an electronic "single window" for export. That is, any Azerbaijani exporter, without leaving the office, can pass through all necessary procedures related to documentation and registration of exported goods using his computer or mobile device. In addition, DTH allows non-residents in Azerbaijan to carry out various operations such as opening limited liability companies and bank accounts, hiring personnel, receiving electronic signatures and ASAN Imza. "ASAN Imza allows us to identify a person, put an electronic signature, which is equivalent to a handwritten one under the relevant laws of Azerbaijan. This makes it an excellent tool in the development of e-services. Thanks to ASAN Imza, electronic tax returns are being filed today, goods and transport services are being declared in the customs service, registration of notices of employment contracts, on-line registration of applicants, etc. ASAN Imza is also a new revolutionary cross-border project for Islamic countries," added the head of the Azerbaijani company B.EST Solutions, the operator of the ASAN Imza, Yana Krimpe.

Also for the first time in the region an electronic wallet is created, which makes the payments for foreign partners a lot easier. "Especially, the partners who do not trust each other as they are buying and selling the goods for the first time have such difficulties. Electronic wallet allows you to keep "live money" until the trading process is over, and only then you make the payment," explained V. Gasimly.

According to DTH Manager Nijat Asadli, the hub has already helped 1500 entrepreneurs from Azerbaijan to access foreign markets.

"As to the prospects of DTH, it is suffice to say that the volume of electronic commerce in the world in 2015 was $25 trillion made by 3.5 billion Internet users, of which only 50 % had access to foreign markets. Ten leading electronic trading platforms have about one billion users. These indicators grow annually," said Asadli.

We should note that DTH is still in the starting mode and a number of functions are still being tested. Apparently, if the project developers achieve all the goals, DTH will take Azerbaijan to a completely different, innovative, almost unlimited and profitable level of trade relations.



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