Current aspects of digitalization in Kazakhstan
In 2024, Kazakhstan made significant progress in digitalization, focusing on the use of AI, modernization of communication infrastructure, and further development of e-commerce. The country has developed and implemented a strategic plan for AI development for 2024-2029, aiming to stimulate innovation and create a national AI platform for the growth of the field.
One of the most significant developments was the modernization of communication infrastructure. More than 1,200 rural communities gained internet access, and 3,700 government and budgetary organizations were connected to high-speed internet. These enhancements have not only increased the availability of services and information but also strengthened literacy among the population.
It is worth noting that 93.3% of all public services in Kazakhstan are now accessible electronically, and 86% of these can be accessed using a smartphone. This demonstrates significant efforts made to increase the accessibility of digital resources and streamline the process of providing services to citizens.
Significant growth has been noted in e-commerce, with a large share of sales coming from marketplaces that provide a convenient platform for interactions between sellers and buyers. This trend reflects global developments in online commerce and consumer preferences.
There have also been notable changes in the behavior of internet users. On average, people now spend three hours each day online, using the internet primarily to search for information and browse various content on different platforms.
In 2024, the popularity of Google decreased by 16.5%, while the market share of Yandex increased to 23.2%. This indicates the dynamic development of Kazakhstan's digital landscape and increased competition in the search engine market.
Below we will also discuss current trends in digitalization in Kazakhstan and provide corresponding figures:
- One of the key trends in the Kazakh financial market is the growth of digital payments and e-commerce ecosystems. Applications, GovTech, and digital assets are also experiencing significant growth. BNPL (buy now, pay later) and neobanking are also gaining popularity among consumers.
- Online services for business-to-business (B2B) transactions are actively developing, particularly in areas such as billing, accounting, payments, human resources, and legal support.
- The total number of internet users in Kazakhstan increased by 1.1% year-over-year to 92.3% of the total population.
- Social media usage among Kazakh citizens has also increased, with 71.5% using social media, an increase of 2% from last year.
- Yandex search grew to 23.2%, while Google's market share decreased by 16.5 percentage points from the previous year to 75.8%.
In 2017, the President of Kazakhstan approved the State Program "Digital Kazakhstan" to transform key sectors of the economy through digitalization, develop ICT infrastructure, enhance e-government services, and create a favorable environment for technological entrepreneurs.
The effectiveness of Kazakhstan's digital reforms can be seen in the country's performance in international digitalization rankings.
- One such ranking is the IMD World Digital Competitiveness Index, which measures the ability of countries to use digital technologies for economic growth. In 2024, Kazakhstan ranked 35th out of 63 countries, scoring 66.03 out of 100 points. This shows that Kazakhstan is making progress in implementing and using digital technologies as a key factor in economic transformation.
- Another ranking is the UN e-Government Survey, which assesses countries' performance in providing online services to citizens. In 2024, Kazakhstan was ranked first among CIS countries and 24th globally. This indicates that the country is improving its e-government services.
- Additionally, Kazakhstan's performance in the ICT (information and communication technologies) Development Index and the Network Readiness Index is also notable. According to recent data, Kazakhstan ranks in the top 50 of the ICT Development Index with a score of 90.1, and 58th in the Network Readiness Index and 58th place with a score of 52.46.
Overall, these rankings demonstrate that Kazakhstan's digital transformation efforts are having a positive impact on its economy and society.
IT companies in Kazakhstan today
The volume of services provided in Kazakhstan in the fields of programming, consulting, and other related services during the first quarter of 2024 reached 293.3 billion tenge, an increase of 72% compared to the previous year. To put this into perspective, the volume of these services totaled 1.1 trillion tenge during January–December 2019, representing a 41.1% increase from the previous year. Astana and Almaty are the largest economic and IT hubs, accounting for 41.5% and 49% of IT services, respectively. Over the past five years, the number of companies engaged in software development and consulting has grown by 2.7 times.
An important step in the development of the IT sector in Kazakhstan was the establishment of AstanaHub, a technopark that provides tax benefits for IT companies and creates opportunities for startups. According to recent data from 2024, more than 1,500 IT companies have registered in Astana Hub, with at least 400 of them having foreign investment. The total revenue generated by participants in the technopark since its inception has reached 40.5 billion tenge by mid-2022.
Since 2019, over 18,000 people have completed IT education programs through AstanaHub, which is especially significant given the lack of skilled personnel in the field of digitalization. In addition, AstanaHub aims to promote the growth of technological entrepreneurship by providing support for innovative projects and initiatives.
Well-known companies are actively developing in the information technology market in Kazakhstan:
- Kaspi.kz is one of the largest and most successful internet companies in Kazakhstan. By 2024, its ecosystem is expected to be used by more than 13 million users. The company provides a range of financial services, including banking, payment services, lending, and online trading. Kaspi is constantly expanding its business and introducing innovative technologies to improve the user experience. The financial profit of Kaspi for January-June 2019 was 466.057 billion tenge, an increase of 26.5% compared to the same period in the previous year. This demonstrates the company's success and its commitment to providing quality services to its users.
- Choco is a leading e-commerce and food delivery company with an active user base of over 500,000 customers. It provides online services for purchasing air and train tickets, making hotel reservations, and finding doctors. The company also operates an online contact lens store. Choco sells 20% of all air and train tickets in Kazakhstan.
- Kolesa Group operates the websites "Wheels", "Roof", and "Market", which specialize in placing and publishing advertisements for car sales, real estate, goods, and services. The company has held leading positions in the "Top 30 Mobile Apps" rankings in Kazakhstan since 2024 with a monthly user base of over 12.5 million users.
- Aviata is a Kazakhstan-based service for the online platform that provides air tickets and train ticket sales. The company sells over 300,000 tickets per month and offers tours to different countries on its website. Customers can make secure payments and purchase tickets for flights and trains with ease.
Kazakhstan is experiencing significant growth in the field of information technology, with many successful IT projects and startups being launched:
- ChocoFamily is a leading IT company in Kazakhstan, founded in 2011. It specializes in the development of innovative software for restaurants. The company offers restaurateurs tools to manage orders and customer bases, as well as optimize service processes. Its products help improve customer service and increase turnover. The company's portfolio includes more than 500,000 active customers, including iDoctor, a doctor search service; ChocoFood, a popular food delivery service in Kazakhstan; and many other companies.
- Robo Wunderkind is a company that creates educational kits for children to learn programming and robotics. These kits are suitable for use both in schools and at home to learn the basics of robotics. The company gained recognition through Kickstarter in 2015 when it raised more than $250,000 from over 1,200 supporters from 58 countries, including Kazakhstan. By 2024, its revenue had exceeded $2.2 million.
- Matrix Mill is a project that focuses on computer vision and virtual reality. The company has developed a groundbreaking technology that allows machines to understand three-dimensional images of their surroundings and enables digital objects to interact with the real world in a more realistic way through augmented reality.
- Nommi is a startup that has developed the world's first portable WiFi router with global roaming capabilities. The device connects to a database of over 4.5 million WiFi hotspots worldwide. Initially, the company invested approximately $30,000 of its own funds into the project, but by 2024, its revenue had reached $10 million.
- ORBIPrime is a software company that helps businesses manage their electronic documents more efficiently. The company's software optimizes workflow and improves the efficiency of document management processes. Previously, ORBIPrime received approximately $3.5 million in funding from Kazakh investors and venture capitalists, including Kenes Rakishev.
- Clockster is a company that develops a time and task management app. The app helps users increase personal and team productivity by organizing work schedules and monitoring task completion. In 2024, Clockster raised $750,000 in funding from several investors, including Singapore-based Quest Ventures, QazTech Ventures JSC, Pavilion Capital (a subsidiary of Temasek Holdings), Russian HR & ED-Tech Accelerator, and Talgat Ismail, a serial angel investor. This funding will help Clockster scale in new markets, such as Southeast Asia and the Commonwealth of Independent States (CIS), and attract new employees to its team.
Kazakhstan is also showing progress in other areas:
- Digitalization of public services - many public services in Kazakhstan are currently available online through the Government for Citizens portal, which significantly reduces the time to receive them and simplifies procedures for working with the state. This portal is actively developing, only this year it became possible to receive most public services through this portal using a video call through the PSC application, and it also became possible to book visits to state corporations and receive electronic coupons in a queue.
- The E-Appeal system is a platform designed to streamline and simplify the process for citizens to receive public services. This system allows users to submit requests and complaints electronically to government agencies directly.
- The Smart Data Ukimet Information and Analytical System is an integrated big data platform that collects, stores, and analyzes information about government activities in order to improve the quality of management and decision-making processes at the state level.
- The project to introduce a dispatch system and online fare payment in Ust-Kamenogorsk is a significant innovation in the public transport sector. Its goal is to improve urban transportation management. Thanks to this initiative, buses, trams, and minibuses now operate according to a strict schedule, and passengers can track their journeys in real-time using special apps. This not only makes public transportation more convenient but also makes it more attractive than personal vehicles.
The best IT projects in Kazakhstan:
- Kaspi Bank is undoubtedly one of the most successful examples of high-tech innovation in the country. This bank has revolutionized the financial sector in Kazakhstan by introducing a mobile application that provides users with a full range of financial services, eliminating the need to visit a physical branch. The Kaspi.kz app is intuitive and user-friendly, allowing customers to perform transactions such as money transfers, bill payments, account deposits, and more with just a few taps on their smartphones. Moreover, Kaspi Bank has successfully integrated financial products like loans and investments into the app, making these services even more convenient for a wide range of customers.
- Aviata is an online service that simplifies the process of purchasing air tickets for citizens of Kazakhstan. It provides a user-friendly platform that allows users to search for and compare ticket prices from various airlines, making it easier to find the best deals. The service also offers additional features such as insurance coverage, seat selection, and car rental, making the overall travel experience more convenient and enjoyable. Aviata has simplified the travel planning process for Kazakh citizens, reducing stress and making travel more accessible.
These projects and initiatives demonstrate the active development of the digital economy in Kazakhstan and the country's commitment to technological innovation. They showcase how governments and private enterprises collaborate to develop smart technological solutions, which create new business opportunities and enhance the quality of life for citizens.
Modern problems and challenges
Digitalization in Kazakhstan faces several challenges that need to be addressed in order to effectively promote the country's digital transformation. One of the main challenges is the shortage of qualified IT professionals in the country. The speed of development in the IT sector is increasing, and more professionals are needed to keep up with the demand. However, the educational system may not be able to provide enough qualified IT specialists.
Another challenge is cybersecurity. As the volume of digital transactions increases, so does the risk of cyberattacks. This is a serious concern, as it can disrupt critical systems and cause significant damage.
Digital inequality is also a significant challenge. While digitalization aims to provide equal access to technology for all citizens, there are still gaps between urban and rural areas, as well as between young and older people. Overcoming these inequalities is a complex task that requires concerted efforts from all stakeholders.
To address these challenges, it is essential to invest in education and training programs to increase the number of qualified IT professionals. Additionally, measures should be taken to strengthen cybersecurity measures and promote digital literacy among all segments of society. Collaboration between government, businesses, and educational institutions is crucial to ensure a successful digital transformation in Kazakhstan.
Also, legislation may sometimes fall behind the rapidly changing technological landscape, creating gaps in digital space regulation and hindering the adoption of innovative business models. One of the key factors for successful digital transformation is the awareness and willingness of the population to use digital tools. This requires systematic education programs to support innovative startups and attract investment in the IT sector, which is essential for developing a country's innovation potential.
Solving these challenges requires coordinated efforts from the government, the private sector, and the international community, as well as strategic programs and projects to ensure equal access to digital technologies for all.
Conclusion
Kazakhstan has the potential to become a leading country in information technology in the region. The government is actively developing digital infrastructure in order to achieve sustainable economic growth. In 2017, it launched the "Digital Kazakhstan" state program, which aims to transform key sectors of the economy through digitalization and the development of information and communication technologies infrastructure. The program also focuses on the development of e-government and creating a favorable environment for technological entrepreneurship, including the development of artificial intelligence.
The country has developed a long-term AI development concept for 2024-2029 that aims to stimulate innovation and create a national platform for AI development. By digitizing public services and making them accessible through mobile devices, the government aims to make them more convenient for citizens.
Kazakhstan has made significant strides in strengthening its communication infrastructure and promoting the growth of e-commerce. The country has improved access to the internet in rural areas and government institutions, which has contributed to the development of IT literacy among citizens.
Marketplaces have played an increasingly important role in the e-commerce sector, reflecting changes in consumer preferences. Digitalization has taken place in various sectors, including finance, B2B services, and social media, making information more accessible to the public. According to several studies and international rankings, these initiatives are having a positive impact on the overall economy of Kazakhstan.
In addition to bringing economic benefits and enhancing competitiveness, digitalization also has a positive impact on social aspects. The long-term effects of high-quality education, healthcare, and investment climate development will be noticeable and will help reduce the socio-economic gap with developed countries.