The FINANCIAL — Online shopping is booming in Georgia according to transportation companies Express Line Services and USA2Georgia.
The FINANCIAL — Online shopping is booming in Georgia according to transportation companies Express Line Services and USA2Georgia.
“On average 1,000 parcels are delivered to our clients per month and the number of deliveries is increasing stably,” said David Kurkhuli, CEO of Express Line Services.
“There has already been a noticeable increase in orders from September, however there has not yet been the New Year peak. Compared to the previous year’s statistics the orders in December have increased by 60%,” said Nino Tsereteli, Public Relation Manager at USA2Georgia.
Tsereteli expects the orders to decline from February and later continue to a standard indicator.
“The majority are waiting for 24-25 December, by that period there are huge sales in America. Despite the fact that companies on a constant basis offer sales for customers Christmas is still a special period for discounts compared to at other times,” Kurkhuli declared.
The majority of demand from online shopping is for clothes, shoes and accessorize. At USA2Georgia, 60% of orders are of this type, while the rest include home appliances, plates and dishes, linen, as well as trees if they are accompanied with phyto-sanitary certificate.
“The majority of demand at Express Line Services is for clothing and different types of technology. Moreover, car parts are also imported,” Kurkhuli said.
However according to Kurkhuli there are some restrictions on imported products such as food products, easily flammable goods such as perfume, paint, firearms, pornographic production, animals, seeds, bones, fur, products including narcotic substances as well as coins and notes of any country.
The boom of online shopping is governed by several factors such as price, quality, brand and timing, declared the representatives of transportation companies.
“The prices on foreign sites are quite affordable for all social layers, for the low-income as well as high-income population. In America even the most luxury brands are cheaper than in Europe, which governs the popularity of trading in the US,” Tsereteli declared.
“Moreover, for the high-income population, for whom the local high prices are affordable, they still prefer to purchase goods in the US. This is the reliability factor, they are sure that the goods they purchase are original and of high quality. Moreover, timing plays an important role. An individual can surf the site and place an order at any time. The simplicity of the transportation process and checking your product at each step of transportation means added convenience for the client. To sum up I would distinguish three factors which governed the boom of orders: price, quality and time,” Tsereteli added.
“Many reasons governed the boom of foreign orders such as low prices and high quality, the variety of products, wide choice of offers and probably the fact that online shopping is new in Georgia, which is simple and comfortable compared to walking to the shops. What’s more I would say that online shopping is quite exciting,” Kurkhuli added.
Kurkhuli said the web pages give a variety of choice and there are many products which might be brought from different sites, such as technology, books, car parts, different types of accessorize, home appliances, sports equipment and other types of products.
The European online shopping market is not actively demanded by Georgians. As representatives of transportation companies said, the major case is the high price of products in Europe.
“Despite the high product prices on European sites, there are still orders from different EU countries,” noted Kurkhuli.
“Europe is not very convenient to shop from, as in the USA an individual can find the brands at cheaper prices than in the EU. Currently we are not working on this direction as we would like to improve the service we offer and concentrate fully on this,” Tsereteli said.
The additional cost to the product, despite transportation, is excise of over 300 GEL.
In terms of government regulations, when a product priced at more than 300 GEL crosses the border the individual has to pay excise. However when an individual purchases a product priced at more than 300 GEL while in a foreign country, he does not pay any excise while crossing the border.
“This is regulated by Georgian legislation about parcels. A product is excised when the price of the parcel exceeds 300 GEL, the product is of one type, or more than a total weight of 30 kilograms,” said Kurkhuli.
“However, there are still some privileges. If the products are ordered from different online shops and their total price exceeds 300 GEL they will be excised, however if an order from one shop only does not exceed the existing limit, in such a case the products are not excised,” Kurkhuli added.
“The excise procedures in Georgia have become quite easy. If the total price of products exceeds 300 GEL and the individual has to pay excise, he can directly apply to the post office to get the parcel and within a month’s period make payment via the bank. The process requires a maximum 5 minutes,” Tsereteli added.
The prices of transportation depend on the weight per kilogram of the product. At Express Line Services the price per kilo is 8 USD, equivalent in GEL. The price decreases in accordance to the weight. If the product weights 50 kilos the price is 7 USD per kilo, from 200-500 kilos – 6 USD, and 500-1,000 kilo (without packing cost) – 5 USD.
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