A recent study conducted by the Amman Chamber of Commerce (ACI) has set forth a recommendation to evolve Jordan into one of the most rapid e-commerce and online retail centers, serving the entire Middle East and North Africa (MENA) region. In the study, the Chamber underscores the necessity for an extensive overhaul of the digital infrastructure of e-commerce. The proposed transformation includes enhancing the conducive environment for e-commerce growth, ensuring equitable competition with conventional trade, and aligning with international standards. The global volume of e-commerce sales was approximated at $27 trillion in 2020, according to a study by the United Nations Conference on Trade and Development (UNCTAD), while Jordan’s share stood at $788 million. Emphasizing transparency and enforceability, the study insists on the development of e-commerce-related legislation and regulations in Jordan that safeguard both consumers’ and merchants’ rights. The report further highlights the essentiality of constructing a robust and advanced technological backbone to support e-commerce. Such an infrastructure would require high-speed, reliable internet connectivity, secure e-commerce platforms, and the approval of the e-sales system draft proposed by the Chamber. The study also delineates the importance of equitable treatment of goods and commodities arriving in the Kingdom through both conventional trade and postal parcels. This includes uniform examination, clearance, inspection, valuation, and the standardization of fees and taxes. Among its recommendations, the study calls for the amplification of electronic shopping experiences. This involves supporting traditional merchants through digital platforms, improving user interfaces, and providing clear product descriptions and purchase options. Merchant training in the basics of e-commerce and enhanced awareness of electronic safety and personal data protection were also listed as critical areas of focus. Addressing educational needs, the study stresses the alignment of higher education outputs with labor market demands, particularly in e-commerce specializations. Immediate actions to mitigate the negative impact of e-commerce on specific sectors, like clothing and footwear, were also urged, along with the promotion of awareness campaigns concerning consumer rights. The study, a collaborative effort between the Chamber’s Department of Policies and Studies and the Constitution Center for Economic Studies, also discovered that improper postal parcel regulations led to an estimated treasury loss of 36 million dinars in 2021, rising to 72 million dinars the previous year. These numbers are expected to escalate with the growing volume and value of postal parcels arriving in Jordan. The research aimed to gauge the effect of the digital commerce transition on the Kingdom’s commercial and service sector. This involved an examination of Jordan’s readiness for e-commerce and the necessity for measures to alleviate its negative influence on traditional trade. A survey of 300 e-commerce consumers, representing various ages and professions, revealed that 64% prefer online shopping to save time, while 34% find it more economical. Further insights from the study include a preference for local goods, issues with product quality and size, the impact of the COVID-19 pandemic, and spending patterns. Additionally, the opinions of 300 merchants in the clothing and footwear sector were analyzed. The findings showed that 77% attributed a decline in traditional sales to e-commerce competition, while other factors included reduced purchasing power and shifts in consumer priorities. The study also found that 85% of merchants are interested in organized training courses to enhance their e-commerce capabilities, even though challenges like the lack of specialized technicians, inadequate technical equipment, and reluctance to adapt were identified. The study also explored the evolution of electronic commerce within Jordan, revealing a series of decisions made by the Council of Ministers that have shaped the e-commerce landscape in the country. In 2015, a landmark decision was made to exempt all goods imported through e-commerce from customs duties and sales tax. This led to a marked reduction in the prices of various commodities, with rates dropping between 40 and 50 percent in comparison to traditional markets. Following this, in 2016, the Council of Ministers further decided to exempt postal parcels from customs duties, additional taxes, sales tax, and customs service charges on imported goods used for personal purposes. These exemptions encompassed various items, such as foodstuffs, children’s toys, shoes, and personal clothing, and specified limits on the customs value and number of parcels allowed per month. However, the trajectory changed in 2019 when the Council of Ministers decided to impose customs duties on e-commerce parcels and establish annual purchase limits. This policy shift led to a decrease in the number of postal parcels from 1.4 million in 2019 to 642,000 in 2020. The study recognized that the new duties and restrictions negatively impacted the volume and number of postal parcels, indicative of a potential decline in electronic commercial shipments. In a corrective move, the Cabinet decided in 2021 to reduce and unify customs duties on postal parcels and double the ceiling for the value of parcels subject to reduction, among other measures to simplify e-commerce procedures. These efforts were aimed at facilitating the e-commerce process and stimulating logistics and entrepreneurial activities. As a result, the number of parcels imported into Jordan surged to 909,000 in 2021, a 42 percent increase compared to the previous year. Notably, the study identified significant growth in Jordan’s e-commerce sector in the first half of the last year, with the number of incoming parcels increasing by more than 100 percent compared to the same period in 2021. This surge reflects the continued rise in online shopping interest in Jordan, fueled by government efforts such as reducing customs duties and streamlining customs clearance procedures. In the broader context of economic modernization, the study highlighted the attention given to e-commerce within Jordan’s trade sector vision. The executive summary noted that the sector had not kept pace with global practices enhancing digital readiness and that the existing e-commerce legislation was insufficient. Among the strategic objectives of economic modernization and trade sector priorities is the ambition to position Jordan as a regional center for trade and leverage its presence in both traditional and digital commercial channels. This aims to foster an attractive environment for international companies and investors, fueling economic growth, particularly in e-commerce and online retail catering to the MENA market. Twelve initiatives were proposed to realize this vision, with key strategies including the modernization of digital infrastructure for e-commerce, enhancement of the enabling environment, and the promotion of fair competition with traditional trade. The study underscored the undeniable reality and growing importance of e-commerce, a trend further accelerated by the COVID-19 pandemic, which spurred increased reliance on electronic dealings. On the international stage, the study acknowledged the significant roles of the United States, Japan, China, and South Korea as leading players in the e-commerce sector, each boasting strong and developed markets. In the Arab world, Gulf Cooperation Council (GCC) countries have shown remarkable progress, with the United Arab Emirates, Saudi Arabia, and Jordan ranking 5th, 49th, and 76th globally in the emerging e-commerce index, respectively. Overall, the study provides a nuanced understanding of the e-commerce landscape in Jordan, tracing policy decisions, analyzing growth trends, and contextualizing its position within both regional and global frameworks. It offers a comprehensive picture of the opportunities, challenges, and future directions of e-commerce in the country, contributing valuable insights to policymakers and industry stakeholders alike.
Source: Jordan News Agency