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Ivan Petkov

What are the opportunities of the Bulgarian commercial company which faces a shrinking market and reduced purchasing power, indebtedness, complex banking and financial environment and fierce struggle for survival in the industry? It looks like a Chinese puzzle. One of those for which you would tell that there is no way to be unpuzzled...

The world economic and financial crisis slowed down a nascent phenomenon in Bulgaria - the e-commerce. But this crisis could prove to be the catalyst and then to change the slowest and most difficult element in the chain - the companies. Statistical data before the crisis showed that there was sufficiently large population Internet connectivity, sufficient saturation with credit and debit cards and online payment services, and yet the rates were not those we all wanted to be. They said that people had prejudices, that the Bulgarian is not accustomed to shopping online, the Bulgarian still thinks that seeing is believing. In fact, user experience offered by online stores, the lack of specific legal basis to guarantee the both sides - customer and seller, and many other factors which I will mention below, were objective obstacles to the real development of e-commerce.  

Now is the time to note the mix which the crisis has mixed up. On the one hand, there are the companies that have faced the almost impossible task to survive. On the other hand, the development of a not particularly good but still growing at a healthy pace model has stopped. The Bulgarians have continued to shop more and more online. Statistics show that the mass Bulgarian Internet user is not a teen who wants to have fun but rather is about 30 years old, educated and .. solvent, availing the adequate means of online payment. Naturally, the companies have turned to a cheaper option of e-commerce which optimizes their costs and makes them invest in the future. Recent data show that e-commerce turnovers grew by 10% last year.

All this and many other issues were discussed at the seminar on How to Make Business Online http://onlinebiz.netmag.bg/. The topics covered regulations related to e-commerce, e-shop design and development, its optimization and mareketing, hosting and consumers and their rights and protection. Much of the attendees were representatives of businesses willing to make an online store. Many were those who already have such a store as part of their business.

The legal framework

A successful business needs clear rules for market players. We have seen the rest - corruption and scramble under the counter, mistrust by customers. It is the confidence of consumers that is the most important in e-commerce, because this is a new way of shopping and there is still lack of confidence in the trader. Here are some highlights:
- Customer agreement – General Terms and Conditions. Mandatory part of any online business that would give equality between all users and would provide clear rules.
- The General Terms and Conditions do not exclude individual agreement when this is necessary and required by both sides.
- These General Terms and Conditions should be positioned in a way not allowing the user to proceed with the purchase or other action stated in these conditions without accepting them.  
- The General Terms define the service and disputes solving. Experience shows that companies have increasingly resorted to arbitration to avoid the cumbersome procedure in the Bulgarian courts.
- Responsibility for the actions online is the same as in real life.
- Auxiliary services providers such as web hosting/domain are not responsible for the services offered by the e-store. The same applies to the so-called linking - search engines are not responsible for the presented results.
- Prohibited for online shopping in Bulgaria are medicines, homeopathic products and other products of healing properties. This does not apply to food additives which will be officially regulated.
- Right of withdrawal - all users who ordered goods online are entitled to return the goods within 7 working days from the date of delivery without stating a reason, and compensation.

It is clear that there are good rules and practices of e-commerce and you only need to know them well in order not to risk your e-business at the start.

Ready VS unique design shop

Currently, customer requirements are not so high and mass consumer is influenced more by price than by design.

It depends on the initial funds available to the specific entrepreneur who wants to invest in an online store. Generally, the practice shows that ready-to-buy stores require small initial investment and start-up time at the expense of costly maintenance and expansion of opportunities. Moreover, many of the advertised features are only on paper as is the case with SEO. The web sites of most of those offering ready solutions are not optimized, so, how can we trust them that the stores they sell are optimized? Ultimately, the specific case and the business model define the application.  

The SEO issue

or search engine optimization was discussed before. Now I'll skip it because it is long and it deserves a separate article. I just want to mention some very important conclusions: do not use copy-paste and look at the best practices of the competition and internationally recognized sites in the industry.

Marketing and Advertising

There are no official statistics on online trading turnovers in Bulgaria but according to estimates of experts in the industry they exceeded 70 million euros last year and another 30 million euros have been spent for advertising. The market is expected only to grow in the coming years. Online advertising is becoming more popular because of Internet popularity and greater access. It is worth noting that CPM advertising (per 1000 impressions) is not efficient especially for e-commerce unless branding is required.

Well-developed web sites are trying to impose it but the mere fact that the CPC advertising price (per click) is increasing indirectly shows that it is difficult for them to bring clicks to their customers. The fact is that CPM advertising efficiency has dropped in recent years and it is also a fact that Bulgarian consumers more rarely click on ads compared with their counterparts from other countries.  

Social networks like facebook are the new field of marketing and advertising. Nearly 2 million Bulgarians are already part of the network and their number continues to grow. Experts say that facebook is far from its maximum still. Furthermore, social networks are a free channel for driving traffic. Organized games are paid option. The development of such a game for facebook costs between BGN 3 and 5 thousand. Bulgarian campaigns have managed to attract around 50,000 users. The question remains of the real benefit of such campaigns and whether they remain limited only to facebook as a tool for fun and winning prizes. The conclusion is that we should not rely only on one commercial channel.

The native online advertising market is also subject to the invasion and development of partner (affiliate) networks. The other underdeveloped tool is e-mail advertising.

The boom in e-commerce is to take place in Bulgaria and the Balkans. We will monitor the developments and will cover them in articles that explain in plain language this complex, but binding issues relating to business and technologies. Follow us, we have prepared many interesting readings.

We would be happy to let us know what would be of your interest and use!

Successful business!