Government internet shutdown harms Iranian e-commerce

It may be too early to estimate the economic impact of the protests on Iran’s economy, but early signs point to serious disruptions in the retail e-commerce sector.

The government has severely restricted internet access in general and access to popular social media platforms in particular which play a key role in e-commerce. The government is extremely concerned that people are using the internet and social media to share news and images about the protests, perhaps motivating a larger segment of the population to join the protests. He also doesn’t like popular unrest videos being shown overseas.

For more than three weeks, authorities have blocked internet access at certain times of the day and slowed down connections to make it more difficult to upload videos. But what is impacting e-commerce is the decision to completely block WhatsApp and Instagram.

Especially Instagram is an extremely popular platform for individuals, small family businesses and large companies with employees to offer goods and services online. Some estimates put the number of all such companies at nearly one million units in Iran, but companies with 10 to 200 employees represent only a small fraction of this number, although there are no reliable figures. .

The internet disruption and Instagram ban immediately halted or slowed sales for hundreds of thousands of businesses large and small.

A report from an online trade association Oct. 8 said e-commerce businesses with 10 or more employees were losing between $1,500 and nearly $20,000 a day. These are significant figures in local currency.

An online advertisement in Iran to learn how to use Instagram for e-commerce

Small businesses run by individuals and families would lose much less, but the impact of their loss would be detrimental to their livelihoods.

A news site said that in many cases, e-commerce businesses have lost all their revenue, but most have seen their orders drop by 70%, and in the best-case scenario, merchants are suffering losses of 50%.

An unofficial survey of 104 retailers (10-200 employees) showed that 53% lost $1,500 a day in sales, while 21% lost up to $3,000, 18% between $3-15,000, and The richest 8% lost more. The upper level includes companies with more than 200 employees.

This means total daily e-commerce losses could run into the millions of dollars a day considering the hundreds of thousands of small family businesses that could each be losing a few tens of dollars a day. Postal deliveries also fell by more than 25%.

This does not include general damage to the economy caused by internet disruptions. Some reports indicate that the government and businesses have resorted to telephones and faxes to communicate.

There is no full estimate of Iran’s daily e-commerce volume, but the sheer number of social media accounts and web pages running their business online gives some idea of ​​the economic impact of the shutdown. Internet.

It is not clear whether the government intends to maintain Instagram ban and WhastApp if the protests end. Extremists who have controlled both the government and parliament for more than a year were planning to further restrict internet access, even without the current protests. Today, some seem to argue that the time has come to ban foreign apps forever, to protect the ideological and political restrictions imposed by the religious government on citizens, and to prevent Western cultural influences.

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