The nominal market value of ICT-related services reached 400 trillion rials ($3.3 billion) in the fiscal 2018-19, marking a 110% growth in the first six years of President Hassan Rouhani’s term in office, the information and communications technologies minister said.
Addressing the 13th International Conference on Strategic Management held on Nov. 19-20 at Iran’s International Conference Center in Tehran, Mohammad Javad Azari Jahromi also said the ICT market was worth 400 trillion rials ($3.3 billion) in the Iranian year ending March 2019.
The figure indicates a twofold increase compared with 190 trillion rials ($1.5 billion) in 2013, IRNA reported.
The ICT minister emphasized that the growth was achieved despite the decline in industrial and agricultural sectors caused by US sanctions, calling on the government to employ up-to-date management strategies to further support the technology ecosystem.
Jahromi said the ministry is preparing a directive on government support for fledgling, smart enterprises in a push to facilitate their growth.
"We will soon send the draft to the Cabinet for ratification," he added.
However, the government should not limit its share of work to passing guidelines.
"Although such directives are helpful for small- and medium-sized businesses, the government also needs to continue its contribution to the firms' development with financial assistance," he said.
“The government must make some changes in management strategies and its view towards society, making it more interactive. This will not happen until senior authorities receive training on modern management techniques.”
The ICT minister also called on university professors and experts in the science of management to help implement the required modifications.
Jahromi noted that despite the economic hardships and financial deficiencies in the country, the young generation holds a precious treasure of talent that can boost employment and develop the domestic economy, in case it receives adequate support.
The annual international conference was focused on strategic management in the country and its dissemination among managers and experts, as a solution for developing organizations and scientific institutions.
The event gathered scholars, strategists and businessmen to discuss smart solutions in the field and evaluate the impact of strategic management on sustainable economic development.
The conference was also aimed at promoting cooperation among scientists, researchers, experts and managers. The prominent attainments in the area were also introduced and honored.
Representatives from universities, state-backed and private companies, and Communication Regulatory Authority were among the attendees.
E-Commerce Status
The e-commerce market has also grown significantly in recent years.
According to a September report by the E-Commerce Development Center of Iran, in the fiscal year that ended March 2019, the nominal value of Iran’s e-commerce market has grown 30.5% to reach 2.08 quadrillion rials ($17.3 billion) from 1.59 quadrillion rials ($13.25 billion) in the fiscal 2017-18.
The report further states that the market’s real value stood at 6.1 quadrillion rials ($50.8 billion) for the fiscal 2018-19, down 13% compared with the same period of a year earlier.
Behnam Amiri, a deputy at the center, says the difference between the true and nominal value of the market is due to the sharp surge in prices and raging inflation over the past fiscal.
“The gap indicates that people’s purchasing power has been slashed, which took a toll on the e-commerce market,” he said.
According to the report, during the fiscal 2018-19, the e-commerce sector’s share in Iran’s gross domestic product observed a 5.28% year-on-year decline.
The report put Iran’s GDP (excluding revenues from oil industries) at 20.014 quadrillion rials ($166.78 billion) in the fiscal 2018-19 and 14.5 quadrillion rials ($120.8 billion) in the year before.
E-Commerce Firms
There are 270,000 Iranian e-commerce businesses with an operating website, of which 49,000 had received the “Trust Seal” issued by the center by March 2019.
Close to 64% of these businesses are classified as online stores, while 15% offer educational services and 10% are labeled as content producers.
Of the 270,000 internet-based businesses, 22,694—or 8.4%— are based in Tehran Province. It is followed by Khorasan Razavi Province with 3,751 e-commerce firms and a 1.4% share of the sector.
Unlike most developed countries, most e-commerce firms are registered by natural persons in Iran, accounting for 76% of the businesses compared to 24% registered by legal persons.
Furthermore, 91% of the investments in e-commerce firms were made by natural persons during the fiscal 2018-19, 5% by startup accelerators, 2% by the government and 2% via crowdfunding.
Women Business Owners
The number of women business owners in the e-commerce sector observed a significant jump during the fiscal 2018-19 compared with the previous year.
According to the report, women owned 13% of the businesses (35,100 firms) by March 2019 compared to 9% a year earlier.
The report further indicates that 67% of customers of e-commerce firms are men. This is in stark contrast with the public belief that internet-based enterprises are more popular among Iranian women than men.
By March 2019, close to 95% of the e-commerce businesses had fewer than 50 employees and 58% of the firms were established more than a year ago.
The center puts the total number of e-commerce transactions carried out in Iran during the fiscal year at 1.11 billion.
The report further compares the number of online financial transactions during the fiscal 2018-19 with a year earlier, indicating a 77% hike. However, the amount of money transferred had only increased by 30%. This indicates that people’s declining purchasing power and the economic headwinds facing Iranians had slashed their online spending.
Each e-commerce transaction averaged 1.87 million rials ($15.5) during the fiscal 2018-19, which figure stood at 2 million rials ($16.6) a year earlier.
Many Iranian e-commerce firms are based in tech parks and innovation factories set up by government support or private investment.
