Online business in Afghanistan

online-business-665x372More or less, 30 – 40 percent of trade transactions are taking place online world wide in developed economies. This is because; this very important method of buying and selling products and services are much convenient compared to 19th century. Markets have become more intangible and are now spread across the web as virtual market place where consumers and sellers come from different societal segments and perform their business transactions to maximize their satisfactions and profits respectively.

Data from global economic mirror and different business research institutes show that, those economies enhancing and developing online businesses are performing good compared to those which are not even thinking of it. Technological evolutions throughout history, especially in 20th century have broadened the horizon of doing business in its extremely convenient ways possible.

Data from trading economics suggest that, Asian countries such as; Malaysia, Singapore, Thailand, Indonesia and Philippines earn more than USD 5 billion and add this amount to their GDP.

The situation in Afghanistan is much different. With 36 percent of its population living below the poverty line, Afghanistan is only second to Bangladesh as Asia’s poorest country. Poverty is most heavily concentrated in the rural areas of Afghanistan. While 90 percent of urban households have access to electricity, only 29 percent of rural households do. Business deals are still taking place in its extreme orthodox methods. Buyers and sellers come from different segments and with significantly different expectations and fix the prices in accord with demand and supply forces. There is not fixed pricing structure in 90 percent of the Afghanistan local business deals.

After the international community’s interference in Afghanistan’s socio-economic development and the commencement of nation building process with direct aids of United States of America, technology have become an indispensable matter of livelihood for Afghans.

Communications in Afghanistan (telephone, internet, television and radio broadcast services)

 Telecommunication industry is under the control of the Ministry of Communications and Information Technology (MCIT). It has rapidly expanded during the Karzai administration that took over in late 2001, and has embarked on wireless companies, internet, radio stations and television channels. The Afghan government signed a $64.5 agreement in 2006 with China’s ZTE on the establishment of a countrywide optical fiber cable network. The project began to improve telephone, internet, television and radio broadcast services throughout Afghanistan. As of 2014, about 9 percent of the country’s population has access to communication services.

There are about 18 million mobile phone users in the country. EtisalatRoshanAfghan Wireless and MTN are the leading telecom companies. Etisalat became the first company planning to launch 4G services in 2014. It is predicted that over 50 percent of the population will have access to the internet by 2015. In 2014, Afghanistan leased a space satellite from Eutelsat, called AFGHANSAT 1.

Internet in Afghanistan:

Afghanistan was given legal control of the “.af” domain in 2003, and the Afghanistan Network Information Center (AFGNIC) was established to administer domain names. As of 2010, there are at least 46 internet service providers (ISPs) in the country. Internet in Afghanistan is also at the peak with 1 million users as of 2009.

According to the Ministry of Communications, the following are some of the different ISPs operating in Afghanistan:

  1. Global Services (P) Limited
  2. Rana Technologies
  3. Global Entourage Services
  4. AfSat
  5. Afghan Telecom
  6. Is Afghanistan a better market to Enter as an Online Business Investor?

According to Doing Business Report of World Bank 2015, Afghanistan scored 183 in terms of ease of doing business. For any country to ease and attract domestic and foreign direct investment, it is mandatory to develop rules and regulations, apply technology and relax some of the traditional methods of doing business. The simple formula for the business prosperity is (Regulations Practice + Technical Application + Information Technology = Business Prosperity).

Among the more encouraging trends shown by Doing Business data of World Bank, over the past decade is the gradual improvement in Afghan Economy’s performance in the areas tracked by some macroeconomic indicators. Moreover, Afghan economy with the weakest regulatory institutions and the most complex and costly regulatory processes tend to focus on the areas where their regulatory performance is worse, slowly but steadily beginning to adopt some of the better practices seen among the best performers.

Afghan government still has not been able to draft and develop cyber Law which will directly provide insight to doing online business in Afghanistan. There are some basic online trading local companies as www.tujarat.comwww.motar.af .

According doing business report of the World Bank, there are opportunities and obstacles to start and exit any business in Afghanistan at the same time while an investor decides to heavily invest keeping in mind the short-run profit. Online Business can sustain if the investor is patient enough and consider long run profits and benefits. This is because online business culture shall be first adopted by the population then business growth will be ultimately witnessed by the investors and company share holders.

Any online businesses that are going to enter the Afghan online market should follow below principles;

  • Government support (on time response from government authorities)
  • Initiative & Innovative business concept
  • Demand based provision of products and services
  • Effective business strategy
  • Differentiating Factors of your business (What’s new in your business idea and products and services?)
  • Sufficient Budget structure
  • Marketing strategy
  • When and how to enter the market?
  • Website design
  • On time services delivery process and strategy
  • Publicity

-Mohammad Sabir Sidiqee, KP

THE PASHTUN TIMES

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