Uzbekistan has seen a rising urge for food for e-commerce lately, and the sector holds potential for future development.
The e-commerce channel within the Central Asian nation has witnessed fivefold development between 2018 and 2022, exceeding $500 million (€427.32 million) in 2023, in accordance to the World Financial institution.
As customers present extra curiosity in on-line searching for groceries to ordering meals and different wants, the market holds promise for corporations venturing into the realm.
One such development story has been Uzum, an e-commerce platform and fintech service supplier, which turned the primary unicorn in Uzbekistan after securing $114 million (€97.43 million) in funding in March 2024.
Its $345-million (€294.85 million) GMV e-commerce arm, Uzum Market, generated a lot of this development.
Launched in 2022, Uzum’s digital ecosystem features a market, an categorical supply service, conventional and digital banks, a BNPL (Purchase Now Pay Later) service, an automotive market, and an app for entrepreneurs.
ESM caught up with the founder and CEO of Uzum, Dastur Djumaev, and co-founder and chief technique and enterprise improvement officer, Nikolay Seleznev, to listen to the story behind its journey, the improvements redefining on-line retail in Uzbekistan, and the corporate’s ambitions for the long run.
The Development Journey
Foreign money liberalisation and the shift towards digitalisation have been the primary massive turning factors within the wave of financial reforms in Uzbekistan.
CEO Dastur Djumaev stated, “Earlier than 2017, it was extremely troublesome for any personal enterprise to transact throughout borders, elevate overseas capital, and even worth items transparently in foreign exchange.
“When the federal government liberalised the Som, it opened the door to worldwide commerce and funding. For Uzum, that meant we may import merchandise extra effectively, work with international tech companions, and lift capital from overseas buyers – all of which have been important to our early development.”
The inflection level for the corporate was the profitable launch of Uzum Market, which created a high-frequency e-commerce platform and gave the corporate a robust consumer base.
This was adopted by the launch of fintech providers, which additional accelerated development.
The corporate additionally constructed its logistics and warehousing infrastructure, together with Central Asia’s largest fulfilment centre.
“Curiosity in Uzum ramped up rapidly after that, particularly from buyers conversant in Kaspi’s IPO in Kazakhstan. However what actually attracted consideration was our potential: Uzbekistan’s inhabitants is sort of twice the scale of Kazakhstan’s, and e-commerce penetration remains to be extremely low. That gave us a robust story and a number of room to develop,” Djumaev said.
Market Context
Nikolay Seleznev believes that e-commerce in Uzbekistan remains to be at an early stage, with loads of room to develop.
“Penetration is simply round 2–3%, so the upside is very large. The infrastructure, regulation, and shopper readiness have all developed in the previous few years, and platforms like Uzum are serving to lead that transition.
“It’s not nearly promoting merchandise on-line – it’s about constructing the inspiration for digital commerce in a younger, bold economic system,” he added.
On the time of Uzum’s launch, buying in native bazaars or via household networks was the norm, however the firm has since launched next-day supply even to a few of the nation’s most distant areas.
Djumaev highlighted that infrastructure has all the time been its greatest problem.
“That’s why we constructed all the pieces ourselves — the fulfilment centres, truck fleet, last-mile supply, and pick-up factors. It’s capital-intensive, but it surely’s the one method to assure dependable service and attain everybody,” he defined.
The corporate’s efforts opened new avenues for native producers, permitting small entrepreneurs, who as soon as bought in only one market, to achieve all the nation.
“That’s transformational. We’re not simply constructing a enterprise — we’re elevating residing requirements, rising incomes, and creating alternatives throughout Uzbekistan. We wish everybody to be a part of the digital economic system — from rural farmers to family-run grocery companies,” he added.
The corporate has additionally helped speed up the shift in the way in which Uzbek customers work together with digital providers.
Innovation And Differentiation
To remain forward in a aggressive market, Uzum focuses on innovation and differentiation and is continually evolving its enterprise mannequin.
A elementary benefit of the corporate is the truth that it’s Uzbek – it understands the rhythms of the native market and has constructed its enterprise round actual native wants.
Djumaev added, “International gamers can’t match that degree of perception. For instance, one small however telling anecdote is that we seen early on that many purchasers didn’t belief prepayment, so we built-in cash-on-delivery throughout the platform. That sounds easy, but it surely gave customers confidence and helped drive adoption at scale.”
As well as, the corporate depends by itself logistics infrastructure, which supplies it management, pace, and reliability, and the flexibility to increase past Tashkent.
In Might of this 12 months, Uzum launched its Delivered by Vendor (DBS) mannequin to supply extra flexibility.
The mannequin permits sellers to retailer items in their very own warehouses and ship them on to prospects with out utilizing Uzum Market’s logistics providers.
“The Delivered by Vendor (DBS) mannequin got here out of conversations with companions who needed extra flexibility. It permits sellers to make use of their very own logistics, whereas nonetheless benefiting from Uzum’s digital storefront and advertising instruments,“ Djumaev said.
“For grocery and meals suppliers with present infrastructure – or with specialised storage wants – it’s a sport changer. They will now attain over 10 million customers with out relying on our fulfilment community.”
So, who actually advantages from the DBS scheme? The answer is right for cumbersome gadgets, items with distinctive storage wants, and long-tail merchandise, based on Seleznev.
He added, “Suppose: building supplies, furnishings, jewelry, automotive batteries, premium groceries – all of which will be difficult to deal with via conventional fulfilment.
“Our platform brings collectively a variety of sellers, together with main retailers and producers, and the DBS mannequin aligns with their particular enterprise wants, providing higher flexibility, management, and effectivity.”
With a decentralised fulfilment mannequin, sustaining a constant buyer expertise is without doubt one of the key challenges.
To handle this, Uzum has launched service degree agreements (SLAs), defining the requirements sellers should meet by way of supply pace, high quality, packaging, and buyer care.
It’s also integrating monitoring programs and post-delivery suggestions loops to watch efficiency.
The corporate added that it’s notably selective in terms of delicate classes like meals and groceries.
“We solely onboard DBS sellers who can meet strict requirements for temperature management, hygiene, and punctuality. On the finish of the day, the client sees Uzum because the model, and we maintain our companions to that commonplace,” Seleznev stated.
Constructing Partnerships And Ecosystems
Uzum collaborates with a few of Uzbekistan’s main grocery retailers, together with Korzinka, Makro, Baraka, and different smaller native gamers.
These partnerships span throughout product listings, digital promotions, and logistics enablement, and in lots of instances, they act as a digital storefront for its companions, serving to them attain a a lot wider viewers than their offline footprint permits.
The corporate sees potential in creating its present partnerships within the areas of last-mile deliveries, digital funds, and darkish shops.
“Final-mile supply is a pure space for nearer collaboration – we’ve the infrastructure, and plenty of grocery chains have the stock and demand. We’re additionally deeper integrations on funds, whether or not that’s QR-based in-store choices or loyalty syncing. Darkish shops may turn into a robust mannequin for ultra-fast grocery supply, particularly in dense city areas,” Seleznev defined.
The corporate described the launch of private-label merchandise as a pure subsequent step, because it fills high quality or pricing gaps available in the market.
Seleznev said, “We began with fundamentals like family cleansing merchandise, private care gadgets, and pantry staples, and the response has been incredible.
“The imaginative and prescient is to develop this right into a full vary throughout FMCG, with a give attention to affordability, high quality, and native sourcing. It’s additionally a method to help Uzbek producers and producers with constant demand.”
Trying Forward
In August of this 12 months, Uzum secured roughly $70 million in fairness financing, taking its valuation to round $1.5 billion.
The corporate goals to give attention to what it has already constructed and prioritise Fintech.
The corporate added that its BNPL service has taken off, and it not too long ago issued the most important company bond on Uzbekistan’s inventory change to assist fund it.
Djumaev added, “We’re additionally increasing into different monetary merchandise – from instalment plans to financial savings and funds. The massive thought is to show on a regular basis buying into entry to credit score and monetary inclusion.”
When requested about the opportunity of growth past Uzbekistan, Djumaev said, “The concept is all the time there, however proper now our focus is 100% on Uzbekistan. The potential right here is big. Our inhabitants is nearing 40 million, the center class is rising, and GDP is rising steadily.
“Simply take a look at Kaspi – it took them greater than a decade to achieve their scale in Kazakhstan. We’re nonetheless early in our journey, and our roadmap right here at house is full for years to come back.”
