Page 1 of 44
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 06 Issue 05
May 2018
Available online: https://ejbss.org/ P a g e | 29
The State and Development of E-Commerce in Serbia
Borislav Jošanov
Novi Sad Business School
Vladimira Perića Valtera 4, 21000 Novi Sad , Serbia
Marijana Vidas-Bubanja
Belgrade Business School
Kraljice Marije 73
Emilija Vuksanović
Faculty of economics, University of Kragujevac
Djure Pucara Starog 3, 34000 Kragujevac, Serbia
Ejub Kajan
High school of applied studies
Filipa Filipovica 20, 17000 Vranje, Serbia
Bob Travica
Asper School of Business, University of Manitoba
Winnipeg, MB R3T 5V4, Canada
ABSTRACT
The authors of this paper constructed and published multidimensional model for the evaluation
of e-commerce diffusion in any country. According to this model qualitative research of
conditions for e-commerce penetration in Serbia was conducted. Serbia is located on an
important geographical location in Southeast Europe. After Yugoslavia’s falling apart and a
decade of stagnation, Serbia came to a road of economic changes and it became an economy in
transition – it was pronounced the leading reformer in 2005 by The World Bank. Our main
finding is that the process of diffusing e-commerce in Serbia is still on the waiting list, but
different states are found for different layers of this multidimensional model. Some good
experiences found in Serbia’s e-commerce practice are mainly from the B2C e-commerce, while
a strategy of B2B e-commerce could be a catalyst for pulling together the facilitating conditions
and engaging Serbia in global electronic economy.
INTRODUCTION
This study is the result of the wide research which investigated the conditions for diffusion of e- commerce in Serbia. For developing countries like Serbia, e-commerce can be noticed as a
compelling strategy and a paramount opportunity for economic development. The ongoing
Page 2 of 44
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 06 Issue 05
May 2018
Available online: https://ejbss.org/ P a g e | 30
globalization process has the strong driving force in a “revolution in information technology”
which has led to the emergence of a “global informational capitalism” (Castells, 2000). Each
developing country which tends to be a part of the global capitalist economy has to be a part of
international electronic networks. Our question which we appointed before our research was:
how Serbia responds to these opportunities and challenges?
Serbia is one of the most important crossroads of Europe, featuring important roads and railways
(USAID, 2007). Flows of row materials from the east and south used to cross Serbian territory
on their way to the industrialized European countries, and the finished goods used to follow the
opposite direction. The economic turmoil in the 1990s has seriously challenged its capability of
integrating into the global digital economy. Significant transitory moves in last seven years
brought Serbia to the position of the leading reformer in 2005, according to the investigation of
The World Bank (2005). This paper will try to analyze the conditions for diffusing e-commerce
in Serbia today.
MAIN FACTS ABOUT SERBIA
Serbia is an old European country and a new member of world community, still waiting for the
final definition of the borders and the integration into international community. Main
characteristics of Serbia are given in Table 1. Separation processes left strong scarf on economy
and social values in Serbia.
Thinking about conditions for diffusion of e-commerce in Serbia, the authors of this study
conducted an integral investigation based on a previously defined multidimensional model
(Travica et al, 2006). After more than a decade of stagnation Serbia is on the road of economic
and political changes. It is located on an important geographical location, on the crossroads
between north and south, and east and west of the Europe. That is the reason why Serbia is one
of the significant crossroads of Europe, featuring important international roads and railways.
This characteristic raises the importance of Serbia in the period of economic restructuring of
Europe, triggered by the fall of the Berlin Wall in 1989. Flows of raw materials from the east and
south would naturally cross Serbian territory on their way to the industrialized west and north
Europe, and the finished goods would follow in the opposite direction. While enjoying this
potential role of a geographic chain link, Serbia slid into a political and economic turmoil in the
1990s, which has seriously challenged its capability of integrating into the global electronic
economy (Dinkić, 1995). NATO attacks in 1999, which destroyed bridges, main factories and a
lot of transport infrastructure, made the situation even much worse. On the other hand, Serbia
makes significant transitory efforts. The World Bank has rated Serbia as the “leading reformer in
2005.” These reasons motivated our study.
Table 1: Characteristics of Serbia
Area 88,361 square kilometers
Population 9,800,000 (July 2007 est., 7,800,000 excl. Kosovo)
Larger cities Belgrade (the capital, 1.6 million), Novi Sad
Page 3 of 44
European Journal of Business &
Social Sciences
Available at https://ejbss.org/
ISSN: 2235-767X
Volume 06 Issue 05
May 2018
Available online: https://ejbss.org/ P a g e | 31
(500,000), Niš (250,000), Kragujevac, (175,000)
and Subotica (120,000)
GDP $44.83 billion; $4,400 per capita (excl. Kosovo)
GDP Composition
57.9% services, 25.5% manufacturing, 16.6%
agriculture
Inflation Rate 18% (2005)
Unemployment
Rate
31.6% incl. Kosovo (Kosovo 50%)
Brain Drain
More than 200,000 with undergraduate and higher
education
Telephones
2,685,000 (2004) mobile 5,229,000 (2005, excl.
Kosovo)
This research has one restriction: as the part of Serbia called Kosovo is under the international
governance lead by the United Nations and it is now completely autonomous, it is excluded from
this research.
Serbia used to be the largest federal unit in a country called Yugoslavia (meaning: the country of
Southern Slavs), which stretched from Greece to Austria and Italy. Although situated in Eastern
Europe, Yugoslavia was never part of the Eastern Block. Contrary to it, Yugoslavia boasted a
hybrid economic system in which major firms were government-run, while private small and
medium size enterprises operated across industries—from agriculture, to transportation, tourism,
and to software/hardware production. The political system, however, mirrored the model of the
Eastern single-party monopoly, while boasting larger individual freedoms. Yugoslavia’s social
system was also unique in its capability of balancing enormous differences concerning the
economic power of its federal units and the cultural traditions of its many ethnic and religious
groups. At a high benchmark level, Yugoslavia was scoring high annual rates of economic
growth and played a role of bridging the political east and west, and north and south. Peculiar as
it was, Yugoslavian system had long been in operation due to a combination of internal and
external political factors, up until winds of change hit Yugoslavia and Europe in the late 1980s.
In the changed international environment of the 1990s, Yugoslavia disintegrated along the
borders of its federal units and locations of different ethnic groups, through processes of
secession with violent aspects. Serbia fell into a period of hardship, as our analysis will
repeatedly point out. The hallmark of the 1990s period was governance that lacked economic and
political wisdom needed for adaptation to the changed environment. Serbia plunged into
international isolation, economic embargo, and an overall decline. The final blow came in 1999,
when the Clinton administration moved NATO’s air force into a campaign against Serbia, which
decimated the already unraveled economy. Serbia entered the new millennium with its economy
being half the size of that in 1990 (The World Factbook, 2007).
Hundreds of thousands of refugees from war-thorn parts of the former Yugoslavia and from
Kosovo ended up in Serbia. In these days, after all efforts for their return, we found information,
according to UNHCR, that in Serbia are 100,651 refuges from Croatia, 46,951 refuges from
