Armenian Google or Online Business Transformation: Inevitability and New Horizons
YEREVAN, March 31. /ARKA/. The world is currently undergoing a digital revolution, and businesses in Armenia cannot remain detached from these global changes. Digital transformation is not just a passing trend; it is an objective reality driven by changing consumer behavior, rapid technological advancements, and growing competition at all levels. Having observed this process firsthand for over 20 years and helping businesses of all sizes adapt to new conditions, I am convinced that the online space is not just an "additional channel" – it is the key to the survival and prosperity of businesses in the 21st century. As John Chambers, former CEO of Cisco, accurately stated: “At least 40% of all companies will disappear in the next 10 years… unless they figure out how to transform their entire organization to adapt to new technologies.”
Figures and Facts: A Detailed Analysis of Armenia's Online Market Development
Armenia is demonstrating a steady growth in its digital economy, and these are not mere words – they are backed by solid data. By early 2025, internet penetration in Armenia will have reached 80%. What’s particularly significant is that mobile access predominates, with over 100% penetration. This indicates that the vast majority of Armenians are always online, using smartphones and tablets for information, communication, entertainment, and, of course, shopping.
In 2024, according to the Central Bank, the e-commerce market volume in Armenia reached a staggering 972.5 billion drams (around $2.476 billion), reflecting a nearly 75% growth compared to the previous year. ECDB's forecasts are also optimistic: by 2025, the market volume in certain categories is projected to reach $25.7 million, and by 2029, it will hit $33.5 million, with a compound annual growth rate (CAGR) of 6.9% from 2025 to 2029. It is important to note that the Central Bank of Armenia and ECDB provide data reflecting different market segments: the Central Bank offers a general estimate of the total e-commerce turnover, while ECDB focuses on specific product categories (the seven main sectors mentioned earlier: Hobbies & Leisure, Electronics, Fashion, Furniture & Home Goods, Personal Care, DIY, and Food).
Even accounting for differences in methodology, these figures clearly indicate that online shopping is becoming increasingly popular among Armenian consumers, and this trend is expected to intensify.
However, it is not only the growth that matters but also its structure. The share of online sales in total retail trade in Armenia stood at 6.3% (as of 2022-2023, when total retail trade amounted to approximately 1.7-2 trillion drams) and is projected to grow to 6.9% by 2029. While this may seem like a considerable figure, a comparison with other countries reveals that Armenia has huge potential for further growth. For example, in Russia, this share is forecasted to reach 26% by 2025, and in the United States, it was already 16.4% in 2023, with a forecast to rise to 19.4% by 2025. In Western Europe and China, these figures are even higher.
This comparative analysis shows that, despite impressive growth rates, Armenia's e-commerce market is still in its early stages. This presents unique opportunities for local businesses – to secure a niche in a growing market before it becomes oversaturated and gain significant competitive advantages. Online shopping in Armenia spans almost all areas of consumer demand, from electronics and clothing to household goods and food. This means that nearly any business, regardless of its specialization, can find its niche in the online space.
The Changing Customer Journey: From the "Armenian Google" to Reality and Artificial Intelligence
Traditionally, personal connections and recommendations have been strong in Armenia – the so-called "Armenian Google," where information about products and services was primarily obtained from friends and relatives. This model certainly retains its significance, but it is rapidly being replaced by digital channels.
Today’s consumer, whether a young student or a pensioner, increasingly searches for information online. They use search engines (Google, Yandex), social media (Facebook, Instagram, Telegram), online maps (Google Maps, Yandex Maps, 2GIS), specialized platforms, and marketplaces. Most importantly, neural networks like ChatGPT, Gemini, and Perplexity are becoming increasingly important, as they can answer questions, offer recommendations, and even assist in selecting products and services.
Consumers compare prices, read reviews, study product specifications, and watch reviews and videos. They want as much information as possible before making a purchase decision. If they don't find your business in the digital space, they simply won’t know you exist. They'll choose your competitor who has already taken care of their online presence. As John Sachs aptly said, "Your brand is a story that unfolds across all customer touchpoints." If these touchpoints are absent online, your brand’s story remains untold, and potential customers will go to competitors.
COVID-19 Pandemic: Shock Therapy and a Catalyst for Online Transformation
The coronavirus pandemic, which swept across the world in 2020, was not only a global tragedy but also a powerful catalyst for digital transformation. It clearly demonstrated that online is not just an "additional sales channel," but often the only way to survive during lockdowns and restrictions.
At the time, I worked at METRO (Russia), one of the largest international chains of grocery hypermarkets. I witnessed firsthand how the demand for online grocery delivery skyrocketed within days, far exceeding all forecasts and the capabilities of retailers. We had to urgently restructure all business processes, hire and train staff, and implement new technological solutions to cope with this unprecedented challenge.
The pandemic forced many people, who were previously skeptical about online shopping, to change their minds. They realized that it’s convenient, safe, and often more cost-effective. Even after restrictions were lifted, many of them continued the habit of shopping online.
Companies that failed to adapt to the new conditions and couldn’t quickly transition their businesses online were forced to close or significantly scale back their operations. However, those that already had an online presence or were able to quickly develop one not only survived but also gained a powerful growth boost.
The pandemic clearly showed that online transformation is not a matter of the distant future, but a matter of survival here and now. It accelerated processes that were already happening, but at a slower pace. It also forced many entrepreneurs to rethink their views on the role of digital technologies in business.
Marketplaces in Armenia: Threat or New Opportunities?
The emergence of large international marketplaces like Wildberries, Ozon, Amazon, and Temu in the Armenian market has elicited mixed reactions from local entrepreneurs. Many view them as a serious threat to their businesses, fearing they won’t be able to compete with these giants.
However, I believe that instead of seeing marketplaces as enemies, we should view them as new opportunities for growth. Yes, the competition on these platforms is fierce, but this is the essence of a market economy. Competition drives businesses to improve, offer higher-quality goods and services, provide better conditions, and deliver superior service.
Marketplaces are not only competitors but also powerful sales channels that grant access to a vast audience, not just within Armenia but beyond its borders. They offer ready-made infrastructure: logistics, warehouses, payment systems, and marketing tools. This enables small and medium-sized businesses to enter the market with minimal costs and risks.
Comprehensive Online Presence: More Than Just an Online Store
Many entrepreneurs mistakenly believe that going online means simply creating an online store. While an online store is certainly an important component of an online strategy, especially for retail businesses, it is far from the only thing that needs to be done.
To successfully operate a business in the digital age, you need a comprehensive online presence that covers all touchpoints with potential customers:
● Your own website: This is your business card on the Internet, your virtual office that operates 24/7. The website should provide complete information about your company, products and services, prices, delivery and payment terms, and contact information. It should be user-friendly, modern, and mobile-responsive.
● Social networks: These platforms allow you to communicate with your audience, build a community of loyal customers, and promote your brand. In Armenia, the most popular platforms are Facebook, Instagram, and Telegram. It's important to regularly post interesting and useful content, respond to user questions and comments, run contests and promotions, and utilize targeted advertising.
● Online maps (Google Maps, Yandex Maps): This is a must-have for any business with a physical location (store, office, café, restaurant, etc.). Posting information on maps is free and quick, but it enables customers to easily find you, get directions, check your opening hours, and read reviews.
● Online directories and aggregators: Depending on your business type, consider posting information on specialized platforms and aggregators (such as review sites, company directories, booking services, etc.). This can help you reach an additional audience.
● Presence in relevant communities: It’s important to be where your target audience gathers and shares information.
It’s important to understand that online presence is not just about sales but also about reputation. As Jeff Bezos said, "Your brand is what other people say about you when you're not in the room." If you’re not present in the online space, your reputation will form spontaneously, without your involvement, and this can lead to negative consequences.
The Potential of the Armenian Online Market and a Call to Action
The e-commerce market in Armenia has enormous potential that has not yet been fully realized. Growing internet penetration, changing consumer habits, technological advancements, and the emergence of new tools and platforms all create highly favorable conditions for the development of online businesses.
Don’t wait until your competitors occupy all the promising niches. Don’t resist inevitable changes. Digital transformation is not a choice; it’s a matter of survival and success in today’s world. The sooner you recognize this and begin taking action, the greater your chances will be not just to stay afloat but to reach new levels of growth.
The online space offers new horizons for Armenian businesses, providing tools for growth and scalability. You simply need to take the initiative, explore the available opportunities, and start utilizing them. And remember: the key to success is not just technology but also understanding your customer’s needs, building long-term relationships with them, and, of course, having faith in your product and your company.
Evgeniy Mishchenko,
President of the E-Commerce & Digital Marketing Association
