Tashkent, Uzbekistan (UzDaily.com) — The e-commerce market in Uzbekistan has shown impressive growth in recent years. In 2023, the market volume exceeded 1 billion USD, accounting for about 4% of the total retail trade volume. Given the current development pace and market potential, the National Agency for Prospective Projects, the regulator in this area, expects the figure to grow to 15% over the next 5 years.

According to KPMG’s forecasts, the e-commerce market in Uzbekistan is expected to reach 2 billion USD by 2027.

Specially for UzDaily, the team behind the online classifieds service BirBir, led by founders Aleksander Pekin and Aleksander Bayzarov, has prepared five important insights into the classifieds market and P2P sales model in Uzbekistan that will be of interest to foreign investors.

Fact 1: Low e-commerce penetration and rapid growth rates

E-commerce in Uzbekistan is still in its active formation stage. According to the latest data, its share in the total retail trade volume is several times lower than in neighboring Kazakhstan (16.6%). However, the market shows dynamic growth, driven by the increasing internet penetration: the number of internet users in Uzbekistan in 2023 was 23.5 million people. New payment tools are actively being implemented, and cashless payments in retail are on the rise.

Other players, such as Ozon and Wildberries, online services like Yandex.Lavka, have been actively developing their infrastructure in Uzbekistan in recent years as well. However, the marketplace model may not be suitable for everyone: high commissions, which can reach several dozen percent, logistics challenges, inventory requirements, platform entry barriers, stringent platform rules, and other economic factors (such as underdeveloped consumer credit volumes) remain obstacles for large-scale transition by buyers and sellers to online trade.

Fact 2: Market features — maturity of niche segments

Uzbekistan’s economic environment is characterized by a high share of informal, grey-zone, trade and conservative consumer behavior. Until a few years ago, residents preferred bazaars and offline shopping, but the situation is gradually changing.

According to various estimates, around 60% of online shoppers are aged 18 to 35. Active users of online commerce accounts for about 5 million people. The market is developing unevenly: in major cities like Tashkent and Samarkand, digital services have already become part of everyday life, while in regions, adoption is slower. More effort is needed to change traditional consumer habits and give credibility to online transactions, especially this is relevant for the elderly. However, Uzbekistan has a high percentage of young people in its population structure — more than 60% are under 30 years old — which facilitates the penetration of new technologies into daily life.

There is also a gradual maturity and formation of vertical markets in specific areas such as real estate, automobiles and services. For instance, the automotive vertical, which includes both new and used cars as well as auto parts and accessories, is one of the most profitable for online platforms. The auto market in Uzbekistan is quite active: in 2024, more than 400,000 new cars were sold, and according to statistics from previous years, there were 3 to 3.5 times more purchases and sales of used cars. The market structure is quite peculiar: locally assembled cars from UzAuto Motor dominate the sales, customs duties and taxes are high, and imports are restricted by strict rules. In recent years, electric vehicles have become increasingly popular as they can be a better bargain because of lower import rates. In such conditions, classifieds are also the optimal solution if a car or auto parts buyer and seller want to find each other quickly and easily.

Fact 3: Promising niche — classifieds

Despite growing interest in various digital services, the classifieds segment in Uzbekistan is still underdeveloped. There is one large international horizontal player in the country, but specialized vertical services, such as those in the real estate, automotive, and services segments, have not yet taken a significant market share. A large number of interactions between buyers and sellers occurs in the "grey zone" of Telegram channels and communities, which does not make these transactions efficient or safe for participants.

This opens up opportunities for new players capable of offering convenient tools for users and businesses. Compared to marketplaces, classifieds require significantly less infrastructure costs, simplify logistics and interactions with buyers, while providing flexibility and a low entry barriers for sellers. These principles are the foundation of the BirBir platform (from Uzbek meaning "one-one") — a win-win transaction without intermediaries, convenient, smart and secure for both parties.

Fact 4: Drivers and barriers to classifieds growth

Among the main factors driving the growth of classifieds are:

• Increased digital literacy and trust in online platforms;
• Growing availability of mobile internet and fintech services;
• Desire to make a profitable purchase without additional or hidden markup and to sell without significant commissions and burdens;
• Demand for alternative sales channels among small and medium-sized businesses.

However, there are also significant barriers:

• Insufficient development of digital payments and credit services;
• Competition with informal channels, such as Telegram groups, where users are accustomed to buying and selling goods directly;
• Users' mistrust of online services due to the risks of fraud, counterfeits and low-quality goods.

For classifieds to grow successfully in Uzbekistan, it is necessary not only to offer convenient and accessible technologies but also to address these problems by creating secure and gainful conditions for all participants in the transaction. An example of such a solution is the integration of the BirBir classified service with the Telegram messenger, which sees immense success in the country.

Fact 5: Local presence and talent competition

One of the key success factors in the Uzbekistan market is a deep understanding of the local context. Players attempting to remotely launch their services often face problems understanding the needs of the audience and the specifics of the regions.

The government of Uzbekistan, specifically the National Agency for Prospective Projects, actively supports the development of e-commerce and is improving the legislative framework to attract investments in this area. In recent years, several measures have been adopted to increase transparency and security in this sector for players who have decided to launch their businesses.

The labor market in the country still faces a shortage of qualified IT specialists. Local tech companies are forced to compete for talent, where simply raising salaries to attract good specialists is not enough; creating attractive working conditions, career prospects, and professional development opportunities is also required.

For the BirBir team, this is another potential direction for growth: to become a school for developers in e-commerce, bring in best international practices and expand the experience of local experts.

The classifieds in Uzbekistan is a promising market that is not yet saturated with large players. However, to succeed in the market, it is essential to consider the country’s specifics: the need to immerse in local features, competition with informal sales channels, and the shortage of experienced talent. The rapid development of e-commerce, the formation of digital habits, and the emergence of new business models create favorable conditions for the emergence of new projects.