E-Commerce is a key growth opportunity for Albania

November 11, 2021

E-commerce – defined broadly as the sale of goods and services facilitated through the internet – is a key growth opportunity for Albania. E-commerce is rapidly becoming an integral part of the global economy. Sellers can benefit from internet marketing, 24-hour online shopping and remote transaction settlement to reach more customers. Buyers, including both consumers as well as businesses that source their inputs, stand to gain through greater choice, convenience and market competition. With the emergence of new companies offering enabling services for ecommerce, including technology companies, payment services and logistics, a variety of new job opportunities is emerging.

The digital economy has the potential to play an important role in overcoming key obstacles to trade. First, ecommerce stands to overcome the physical distance between buyers and sellers – connecting Albania’s small domestic economy (population of 2.9 million) with larger and more affluent markets abroad (EU population of 512.4 million), while connecting Albania’s still significant rural communities with its urban centers. Second, e-commerce stands to overcome information frictions. Few Albanian firms have established internationally recognizable brands. Online search can enable customers to nonetheless find Albanian products. Listings through internationally established marketplace platforms and a track record of positive online customer reviews can establish trust and boost future exports. Third, e-commerce stands to overcome the limited financial resources available to most Albanian companies. Since products can be sold to customers online, without requiring large upfront investments such as the establishment of a physical store, firms can experiment with entering into new markets and then scale up at low cost.

During the ongoing COVID-19 pandemic, e-commerce has also emerged as an important pillar in the fight against the virus. First, e-commerce reduces the risk of new infections by limiting the need for in-person transactions. Second, it preserves jobs despite social distancing requirements, allowing businesses to sell to their customers without meeting physically. Third, e-commerce increases the acceptance of prolonged physical distancing measures among the population. The continued availability of online shopping and online services, including video chats, movie streaming, and online classes, likely makes the pandemic lockdown measures more bearable for Albanians.