SAID SALIM, a 26-year-old entrepreneur in Kabul, Afghanistan’s mountain-fringed capital, recently opened his first shop. On the top floor of Dawoodzai mall, one of Kabul’s fanciest shopping destinations, he stands behind a counter stacked with his best-selling products: bottles of hair-loss lotion from Russia; posture-correcting devices from China; children’s toys from the United Arab Emirates. Missing, however, are customers. The real storefront for Mr Salim’s enterprise is Facebook. His “Global Online Shop” takes virtually all its orders over the internet. Its deliveries go out to customers by motorbike.
Few Afghans surf the internet. Although mobile phones have spread rapidly—and enterprising firms have put up masts even in places beset by fighting between government forces and the Taliban—only one in ten Afghans uses them to access the web. At least in big cities, though, that is changing fast. Younger, more affluent Kabulis are addicted to their phones. In the absence of e-commerce giants such as Amazon or Alibaba, small online retailers, who import products in bulk and sell them on, have stepped in. Facebook, access to which mobile-phone operators throw in at no extra charge, has become the country’s premier internet bazaar.
Online business in Afghanistan faces the same grievous problems as the offline sort. Security is the most obvious. Nemat Ullah, a business graduate who set up his shop “Smart Sales Online” in 2017, says that last year one of his delivery drivers was murdered and his packages stolen. Smaller obstacles add up, too. Drivers can spend hours searching for a customer in streets unencumbered by a system of addresses. Without trademarks, competition is vicious—a successful shop can expect a flurry of imitators, often selling cheaper, poorer-quality versions of its wares.
The biggest problem of late has been Facebook itself. It is impossible to run an online store any other way, says Mr Ullah; other, unsubsidised mobile data is too pricey. But relying on Facebook means that to reach his potential customers he has to buy advertisements from it. Recently, as the social network has tried to reduce the clutter on its users’ feeds, the price of advertising has gone up. Mr Ullah complains that it currently costs him $10 to reach 1,000 customers. Previously, he could get to four times as many for that amount. His weekly advertising bill has soared. “I need a real shop,” he says.
This post was originally posted at https://www.economist.com/business/2019/04/13/facebook-dominates-afghan-e-commerce.