Revitalizing E-Commerce: Potential Market Growth via Enhanced Consumer Confidence in Georgia

In an effort to elucidate the potential impact of the "Electronic Commerce" law in Georgia, the United States Agency for International Development (USAID) Economic Governance Program recently sponsored a cost-effectiveness study. The research, conducted by business consulting firm PMO, was helmed by consultant Emma Todua who revealed intriguing insights about the nation's underutilized e-commerce potential.

The study spanned from July to October 2022, coinciding with the heated discussions surrounding the draft of this law. Key findings from the research underscored that Georgia's e-commerce industry harbors far greater potential than currently realized, predominantly stifled by the consumers' lack of trust.

Todua highlighted a significant disparity in the adoption of e-commerce between Georgia and the European Union (EU). At present, e-commerce in Georgia stands at a mere 1.1%, significantly trailing the 12% average across EU nations. However, Todua believes a regulated e-commerce market bolstered with enhanced consumer confidence could bridge this gap.

The PMO's analysis projected a decade-long outlook on the impact of the "Electronic Commerce" law, anticipating an upswing in consumer confidence post its implementation. This shift in confidence, as projected, would stimulate benefits for both private and public sectors, contributing positively to the growth of the nation's Gross Domestic Product (GDP).

The importance of digital business operations in Georgia was thrust into sharp relief during the recent pandemic. In response to regulatory mandates, businesses swiftly pivoted towards digital technologies, sparking a trend that the government aims to sustain.

This determination is evident in the recent adoption of the "Electronic Commerce" law by the Parliament, as well as the "Law on Protection of Consumer Rights" enacted in 2022. These laws collectively seek to regulate remote and electronic commercial activities, underpinning the country's commitment to consumer protection and business digitization.