Ecommerce in Ukraine

The e-commerce sector in Ukraine has been growing rapidly over recent years. In 2017, the size of the e-commerce market was around USD 2bn. According to one of the market players, in 2020 Ukrainians made purchases via the internet worth almost USD 4bn. This figure is about 9% of the total retail market.

The 2020 annual growth rate compared to 2019 was 41%. The main catalyst for such rapid dynamic growth was the Covid-19 pandemic. During the quarantine period, Ukrainians started to make purchases online much more often. The recent tendency is that Ukrainian internet users are becoming more willing to purchase day-to-day products like food, household chemicals, and masks online.

The volume of online payments in e-commerce also grew significantly, up 50% compared to 2019. In aggregate, today around 15% of online purchases are paid online. Experts predict that in the next couple of years, cash post-payments for online purchases will become unpopular as they are less safe.

Except for the national marketplaces, online stores and price aggregators, Ukrainians are also widely using foreign platforms (mainly from China, the EU and the US).

Ukrainian law does not set any express restrictions on the possibility of foreign companies to sell their goods/services online in Ukraine. They can start selling online from abroad without an established presence in Ukraine.

If the commercial activity specifically targets Ukrainian consumers, e.g. the advertising or marketing is directed to consumers in Ukraine, the activity must comply with Ukrainian consumer protection, advertising, language and other regulations, even if the business entity does not have an established presence in Ukraine. In such event, the requirements for a tax presence should be also verified.

Ukrainian law does not set any additional licensing or permitting requirements for e-commerce compared to the bricks-and-mortar retail. No specific licence or permit is needed to open an online store.

Some licencing/permitting requirements may apply to e-commerce businesses, as to all other retail channels, in cases of selling certain specific types of products, e.g., alcohol

There are no specific requirements for contracts that must be concluded by e-commerce businesses. In practice, the scope of required contracts depends on the commercial activity in Ukraine. In addition to traditional contracts that are common for any type of retail, e.g., supply and logistic contracts, e-commerce businesses should normally also consider entering into contracts in the following areas:

• Domain/web hosting services: If setting up the e-commerce platform with a Ukrainian domain extension (.ua, com.ua), the businesses should arrange for the respective domain registration and secure website hosting.
• Data hosting services: The data of the e-commerce platform must be stored somewhere, e.g. in land-based servers or in the cloud.
• Other IT-related services: The e-commerce business has to ensure an appropriate level of related IT services, like website support, online customers support, other design and technical aspects of various applications and functionalities
• Payments: A modern e-commerce platform should allow the customers to use a wide range of online payment options like bank cards, electronic wallets, mobile money, etc.

The businesses should decide and verify upfront if the e-commerce website is accessible to professionals only or consumers as well. In B2C relations, where a website is accessible to consumers, all consumer protection rights must be observed (product returns, liability for defective goods, etc.). If a website is dedicated to professionals only, no consumer protection rules apply

Ukrainian e-commerce legislation does not impose any express obligations on the elements of an e-commerce website. Such mandatory elements are commonly triggered by the requirements of other relevant law requirements, such as data privacy (website data protection policy and cookies), consumer protection (information about the products), advertising, etc. 

Under the Law of Ukraine on Ensuring the Functioning of Ukrainian as the National Language, all companies offering products/services to customers in Ukraine, including via the internet, must provide information on such products/services in Ukrainian (but this can be duplicated in any other language).

In Ukraine only very limited categories of products are subject to any restrictions of being available for online purchase. For example, medicines are generally available to be sold only in bricks-and-mortar pharmacies.

In terms of returns, consumers are entitled to withdraw from a contract made on-line within 14 days of the date of receiving the purchase confirmatory document (e.g., sales receipt) or receipt of the product. The seller must return the money within 30 days of the withdrawal notice. Any logistics expenses relevant to the return of the product must be covered by the seller.

In terms of defective products, the same rules apply to traditional and online sales. 

Explicit consent is not always required. The basic rule of Ukrainian law in this respect is that commercial electronic messages may be sent to a recipient only provided such recipient gave his/her consent to the receipt of such communication. The exemption from this rule states that commercial electronic communications may be sent without the consent of a recipient only if the recipient can unsubscribe from such notifications.

The key competition risks in online selling are traditionally the same as in other retail channels. They mainly include the vertical aspects of relations between suppliers and distributors (e.g., selective distribution, competitive restrictions, resale pricing control etc), as well as unfair practices by sellers (false advertising or representation of a good or service, tied selling, etc). 

Ukrainian competition law and practice currently does not provide any specific rules or guidance to aspects that are specific to online selling, such as automated pricing software, restricting goods from being sold or advertised online, etc.

Payments in the e-commerce field may be made using different payment instruments, including electronic money, by transfer of funds or cash payments. All of these payment methods are subject to the general requirements of the legislation on cash and non-cash payments under Ukrainian laws.

The seller, payment system operator or other person who has received payment for goods/services must provide the consumer with an electronic document (sales receipt, ticket, coupon, etc) confirming the receipt of funds and indicating the date of payment

In Ukraine no specific authority is responsible for legal enforcement in e-commerce only.

In terms of relations with consumers, the main Ukrainian consumer protection authority is the State Service of Ukraine on Food Safety and Consumer Protection, which is responsible for monitoring and protecting the rights of consumers in all spheres, including online.

Regarding data protection, the regulator in Ukraine is the Ukrainian Parliament Commissioner for Human Rights.

In Ukraine, consumers can seek to enforce their rights with the regulator, the State Service of Ukraine on Food Safety and Consumer Protection, or the civil courts. The law does not suggest any specific sites or methods for resolving consumers’ disputes in the e-commerce sector.

The E-commerce Law was adopted in Ukraine in 2015 introducing a new legal framework for online selling businesses. Currently, there are no significant initiatives on the horizon regarding the amendments to the E-commerce Law.

Regarding consumer protection, in December 2020 the Ukrainian Ministry of the Economy published the draft of a new version of the Consumer Protection Law for public discussion. This new draft introduces many new terms and concepts relevant to e-commerce that are not covered by the current regulations. The draft has not been registered with Parliament yet and thus it is too early to make any predictions on the chances and timeline of its adoption.