Tashkent, Uzbekistan (UzDaily.com) -- On 2 May, the first international IT conference "How Uzbekistan and Kazakhstan are turning the region into an IT hub for business and talent" was held in Tashkent. For several hours, government officials, entrepreneurs and experts discussed issues that are significant for the industry.

According to the statistical agencies of Kazakhstan and Uzbekistan, the IT service markets of both countries are experiencing rapid development. From 2015 to 2021, the information technology industry in Kazakhstan grew by 130%, to US$3.89 billion. There is less money in the Uzbek market - only US$380 million. But it is worth considering that this amount has increased by US$300 million over the past six years.

“In Uzbekistan, the export of IT services tripled in the first quarter of 2023. During this period, the volume of exports of resident companies of the IT park (a specialized platform for the development of IT business in the country - Kursiv.) exceeded US$50 million. More than 200 companies received resident status,” said Kamola Sabirova, adviser to the Minister of Digital Technologies of Uzbekistan.

According to Deputy Director of the IT Park Makhliyo Muksinova, BPO-residents of the site work with partners from the United States of America (USA), Germany, Great Britain and other countries. “If in 2022 the main market for our companies was in the United States, then in the first quarter of 2023, the share of services provided in the United States decreased to 43%,” Muksinova said. She added that the decline was due to an increase in the volume of exports of outsourcing services to other countries. Among them are the UK and other European countries, as well as the CIS.

M. Muksinova agreed that last year BPO was the main driver for the development of the IT sector in Uzbekistan. However, this trend is fading. “BPO now accounts for about 20% of the total volume of export services rendered. We are slowly moving from BPO to software development services. This is good, as it was supposed to be,” the representative of the IT park noted and explained that in January-March, the residents of the site began to provide customers with more services for the development of services and games.

As of 2021, the volume of the e-commerce market in Kazakhstan was US$2.626 billion, in Uzbekistan - US$644 million. In 2022, the Kazakhstani market increased by 30%, during the period of COVID restrictions, this figure was 69%. It is predicted that these figures will grow to US$5 billion and US$1 billion respectively by 2025-2026. According to the research company Statista, from 2021 to 2025, the volume of transactions in the fintech of Uzbekistan will grow by 123%, for Kazakhstan this figure will be 110%.

“There is a trend towards hybridization of both ways of shopping – online and offline. There are some categories of goods that are more convenient to buy offline, because they need to be felt. And there are categories of goods that are convenient to order online,” said Kevin Handa, technical director of the Uzum Market marketplace, answering the question of “Kursiva” during the second session of the conference.

Experts note the continued growth in the share of online payments in Uzbekistan, which was launched during the pandemic. How to keep this trend? Provide not quantitative, but qualitative service. Customers can change applications, there are many alternative services on the market. Taking in these conditions should be convenient for users, said Umida Ziyamova, Director General of Freedom Pay Uzbekistan.

As for Kazakhstan, there has been some slowdown in e-commerce growth since the end of the pandemic. “Large marketplaces, especially in Kazakhstan, are already looking not only at attracting customers, but also at keeping them, at increasing the value within the systems,” said Janargul Izimova, leader of the digital transformation practice at PwC Eurasia. According to her, artificial intelligence technologies help market players in this.

Fintech companies in the context of rapid technological progress need a prompt and transparent dialogue with government regulators, Ziyamova said. “How competently, how openly we can establish a dialogue - the improvement of our payment systems will depend on this,” said the Director General of Freedom Pay Uzbekistan.

In turn, the Deputy Chairman of the FinTech Association of Uzbekistan, Otabek Nasyrov, asked the FinTech market players to actively participate in the association’s initiatives to build a dialogue with regulators and other government agencies. He also called for standardization within the region. “We are known in the world rather than as Uzbekistan and Kazakhstan, but as Central Asia. Therefore, maximum integration is needed, and not only normative. Technical regulations, I think, should also be simplified, become unified in Central Asia,” Nasyrov said.