The fast improvements of the internet infrastructure along with the changes in online payment methods and the efficiency of online purchases are building up the rapid growth of Iran’s online shopping scene.
During the past years, the significant improvements of 4G internet coverage, the increasing number of people using high speed internet as well as the emergence of fast growing e-commerce companies such as Digikala, Bamilo and changes in customer care and return policies have brought a rocketing increase in the number of online shops in Iran.
Central Bank of the Islamic Republic of Iran’s (CBI) latest statistics show that the electronic purchases over POS, internet and mobile phones in Iran have passed 1383 trillion Tomans ($365B) in the past Persian year. This amount is 1.14 times more than the country’s liquidity until last year’s February. All this means that compared to 2015, the number of online purchases in Iran in 2016 has increased by 34%.
On average, every Iranian above 14, has made 207 online purchases in the past Persian year. In fact, since the young and middle-aged are more interested in online purchases, they as a result, hold a larger share of this number. To be more specific, each individual has made 5 transactions on the internet, 22 on mobile phones and 179 using POS devices in the past year. The average sum of electronic transactions in a year was 110 thousand Tomans ($28). It is worth mentioning that 86% of the number of online transactions and almost 92% of the sum was transacted using POS terminals.
Last year more than 69 Trillion Tomans ($13B) have been transacted for prepaid cell phone and household bills through mobile phones with USSD protocol. Still, this does not stand for more than a share of 0.5% in the total value of electronic purchases since each transaction using USSD protocol was worth 5,000 Tomans on average. While, electronic transactions for E-Government counts for 2.6% of the total number of online transactions, 7.1% of these internet transactions took place through their websites. This makes a 99 trillion Tomans ($26B) sum of cash flow, which means the amount of money in each of electronic transaction for E-Government services was 300 thousand Tomans [almost 79$] on average.
Statistics are an evidence to the change on the behavioural patterns especially among the elder and less educated population. However, the conventional patterns of behaviour and a low internet penetration in rural areas and mobile bank infrastructure have caused these statistics to be much lower than the leading countries in e-commerce.
Statistics from electronic card payment system of Iran (SHAPARAK) show that people living In Tehran province count for almost a third of the total number of transactions as well as 33% of the sum. Other provinces, however, based on the number of transactions after Tehran are Razavi Khorasan with 8.6%, Isfahan with 6.6%, Fars with 6.2% and Khuzestan with 4.4%.
While 99.5% of the number of mobile transactions using USSD protocol took place in Tehran, other provinces hold a smaller share with Hormozgan holding 0.27%, Isfahan 0.1%, Razavi Khorasan 0.03% and East Azerbaijan 0.02%. The same ranking goes for the sum of money in mobile transactions.
For internet purchases, 80% of the number of transactions took place in Tehran as well as 68% of the total sum of money. Other provinces such as Razavi Khorasan with 2.7%, Gilan with 2.1% and Isfahan and Shiraz with 1.7% and 1.5% share of the number of transactions are ranked after Tehran. While Razavi Khorasan counts for 4.1%, Isfahan for 2.5%, Fars for 1.5% and Kerman for 2.2% of the sum of money.
With the official launch of mobile internet in Iran and the fast growing coverage of 4G internet and the changes in customer behaviour, it is expected that the number and sum of electronic purchases continue to increase.