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Albania E-Commerce Diagnostic

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Albania E-Commerce Diagnostic Public Disclosure Authorized Public Disclosure Authorized ALBANIA E-COMMERCE DIAGNOSTIC LEVERAGING THE DIGITAL TRADE OPPORTUNITY Public Disclosure Authorized World Bank Group Product December 2020 Public Disclosure Authorized © 2020 International Bank for Reconstruction and Development / The World Bank Group 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of the World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because the World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, the World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. Acknowledgments: This e-commerce diagnostic has been prepared by a broad multi-sectoral team of World Bank experts led by Christoph Ungerer (Senior Economist, Task Team Leader) and Alberto Portugal (Senior Economist, Task Team Leader) and including Martín Molinuevo (Senior Counsel), Natasha Rovo (Economist), Natalija Gelvanovska-Garcia (Senior Economist), Zhenia Viatchaninova Dalphond (Consultant), Holti Banka (Financial Sector Specialist), Johanna Jaeger (Senior Financial Sector Specialist), Keler Gjika (Financial sector Specialist), Karim Gharbi (Consultant), Laureta Qorlazja (IFC Country Officer), Lillyana Sophia Daza Jaller (Consultant), Raha Shahidsaless (Senior Private Sector Specialist), Iwona Maria Borowik (Consultant), Flora Kelmendi (Senior Education Specialist), Alicia C. Marguerie (Economist), Ana Gjokutaj (Senior External Affairs Officer), Leah Laboy (Team Assistant), Mismake Galatis (Team Assistant) and Eranda Troqe (Team Assistant). The team is highly indebted to Ana Paula Cusolito (Senior Economist) and Michael Joseph Ferrantino (Lead Economist), who acted as peer reviewers for this report. The team is grateful to Linda Van Gelder (World Bank Regional Director for the Western Balkans), Maryam Salim (World Bank Country Manager for Albania), Jasmin Chakeri (Practice Manager for Macroeconomics, Trade and Investment - MTI), Antonio Nucifora (Practice Manager for MTI), Enrique Blanco Armas (Lead Economist for the Western Balkans, MTI), Ian John Douglas Gillson (Lead Economist, MTI Trust Fund Manager), Jamele Rigolini (Program Leader for the Western Balkans – Human Development), Simon David Ellis (Program Leader for the Western Balkans – Sustainable Development) and the Western Balkans Country Management Team for their guidance and support throughout this task. The team gratefully acknowledges funding for this activity through the Umbrella Facility for Trade Trust Fund. This policy note benefited from close cooperation with the Albanian Prime Ministers’ Office, the Ministry of Finance and Economy, the Ministry of Infrastructure and Energy, other Government agencies and numerous interviews with Albanian private sector e-commerce players. 3 CONTENTS 1. Executive summary ........................................................................................................................................ 6 E-commerce is a key growth opportunity for Albania .......................................................................................... 7 While Albania’s e-commerce sector is emerging, it lags behind regional peers .................................................... 7 Reforms are needed to fully leverage the digital trade opportunity..................................................................... 8 Reforms need to be anchored in strong institutional foundations ..................................................................... 10 Effective management of risks related to online markets is key ........................................................................ 11 Concerted private and public sector action is crucial ......................................................................................... 11 2. Introduction ................................................................................................................................................. 13 The rise of e-commerce is a unique opportunity for economic development..................................................... 14 Nonetheless, the growth of the online economy also comes with risks ............................................................. 15 to leverage e-commerce, Albania can draw on international best practice ........................................................ 16 E-commerce can be a pathway to overcoming key obstacles to trade ............................................................... 16 The structure of this diagnostic report .............................................................................................................. 18 3. The state of Albania’s e-commerce sector .................................................................................................... 21 Albania’s online consumers .............................................................................................................................. 22 Albania’s e-commerce businesses .................................................................................................................... 26 Mapping the state of Albania’s e-commerce ecosystem.................................................................................... 30 4. Strengtening logistics and customs ............................................................................................................... 32 Postal and courier logistics ............................................................................................................................... 33 Customs procedures for small consignments .................................................................................................... 37 5. Leveraging electronic payments ................................................................................................................... 47 Access and usage of electronic payments among Albanian customers .............................................................. 48 Access and usage of electronic payments among Albanian webshops ............................................................... 52 Leveraging international e-commerce platforms ............................................................................................... 59 Chapter summary............................................................................................................................................. 60 6. Upgrading private sector capabilities ............................................................................................................ 63 Supporting e-entrepreneurship ........................................................................................................................ 64 Nurturing the e-commerce enabling ecosystem ................................................................................................ 71 Broadening the base of digitally savvy online customers ................................................................................... 75 Chapter summary............................................................................................................................................. 76 7. Promoting digital connectivity ...................................................................................................................... 80 Fixed broadband .............................................................................................................................................. 83 Mobile connections .......................................................................................................................................... 87 4 Chapter summary............................................................................................................................................. 90 8. Bolstering the regulatory framework ............................................................................................................ 93 Regulations on electronic transactions ............................................................................................................. 96 Trust-building regulations............................................................................................................................... 101 Platform regulation ........................................................................................................................................ 113 Chapter summary........................................................................................................................................... 117 9. Conclusion ................................................................................................................................................
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