Delivery business in Serbia
E-commerce business in Serbia
Nowadays, more and more people want to be independent in business and take responsibility for their future. The Internet is making this goal more accessible than ever before, and information trading is one exciting path to success.
We are all familiar with the growing trend of consumer needs in the field of ordering goods, food and various services over the Internet. The growth of purchasing power in recent decades has led to the creation of a global consumer society. Right there “in between” are successful businesses. These are, in fact, intermediaries between merchants and end consumers. Information systems offer exactly what everyone needs the most – information, either about the goods and services on offer, or about the needs of consumers. You must have once ordered and received food or goods through a website or application (e.g. such as Glovo, Wolt, Donesi, CarGo or similar that operate in Serbia). These are exactly the examples of the described business idea.
However, in practice it can be extremely challenging to start a business in this area as there are many legal requirements for e-commerce that need to be met. But creating a legal, business and strategic plan at the outset should prevent unnecessary costs and save resources for investors.
What is the E-commerce platform and how does it work?
Platform is a software program – a website and / or application that allows end users to order food and other goods from retailers who advertise through the platform, and suppliers to deliver orders to the end user (“Platform”).
It connects legal entities that can be restaurants, florists, bookstores and other participants in the market of goods and services (“Merchants”), natural persons, i.e., legal entities that deliver shipments (“Suppliers”) and end users (“Users”).
However, a number of legal rules are applied to the actions and transactions of these entities, which are, among other things, prescribed by the Law on Trade (“Official Gazette of RS”, No. 52/2019), the Law on Electronic Trade (“Official Gazette of RS”). “, no. 41/2009, 95/2013 and 52/2019) which as a special regulation directly regulates this area, the Law on Obligations (“Official Gazette of SFRY”, no. 29/78, 39/85, 45/89 – Decision of the CCY and 57/89, “Official Gazette of the FRY”, No. 31/93, “Official Gazette of Serbia and Montenegro”, No. 1/2003 – Constitutional Charter and “Official Gazette of the RS”, No. 18/2020) , Law on Personal Data Protection (“Official Gazette of RS”, No. 87/2018) Law on Advertising (“Official Gazette of RS”, No. 6/2016 and 52/2019 – other law), Law on Consumer Protection (“Official Gazette of RS”, No. 62/2014, 6/2016 – Dr. law and 44/2018 – other law).
In this context, Law on trade defines, for example, the Platform as follows: “A means by which a person who has the status of an information society service provider, in terms of the law governing electronic commerce, provides a connection service to parties trading electronically. The person who manages the electronic platform may also sell his own goods / services through that platform. ”
In this way, it is legally possible to sell goods and services through the Platform that connects Merchants and Users, whereby the Merchant and the User are in a contractual relationship. However, the Platform very often provides billing and delivery services, and in addition, it can sell goods and offer services to Users, i.e., it can have the status of a Marchant, but it is more common that the Platform is actually just a link between the Merchant and the User. Thus, the Platform serves to connect the parties that trade over the Internet, but allows the owner of the Platform to offer his own goods or services on the same. However, in order to better and briefly explain the legal side of this construction, we will focus on the status matter of the Platform, and then on the relationship between the participants in this business concept, which is based on a number of civil law matters. By the way, in some future texts we will try to address a number of other important legal issues regarding this topic, such as e.g., tax and fiscal aspects of transactions, payment transactions, protection of personal data, criminal liability of traffic participants and so on.
Registration and status
The good news is that the provision of “information society” services, according to the Law on Electronic Commerce, does not require obtaining any permits or approvals, but is free.
However, in order for a foreign company or foreign natural person to conduct e-commerce business through the Platform, it must be registered in Serbia in one of the forms provided by the Law on Companies (“Business Entity“). If it is a startup, during registration it is necessary to consider and choose a business name that is characteristic and makes a difference in relation to competitors. Therefore, the business name must not be misleading in the market, and in particular it must not be identical to the business name of another registered company.
The application and website through which e-commerce business is performed are computer programs. In accordance with the Law on Copyright and Related Media Rights, a computer program falls under the definition of a copyright work, and the author enjoys the copyright protection (property and moral components) from the moment the copyright work is created. This is very important from the point of view of the Business Entity, because in order to economically use the Platform, which is basically a computer program, ie. author’s work, he must conclude an author’s contract by which the author assigns him certain property components of copyright. Otherwise, the Business Entity would not be authorized to use the Platform, and would not be able to start its business. In addition, if the Business Entity wants to have a website through which Users will be able to access the Platform, it is necessary to register the domain with one of the authorized providers. A domain registrar can be the author of a website, but in practice it is usually a Business Entity.
Ecommerce Business and Merchants
The next step is to establish a business relationship with partners – Merchants who will appear as sellers of goods or service providers on the Platform. However, it should be emphasized that this is not necessary, because as we have already mentioned, the current legislation allows the Business Entity to offer its own goods and services.
Certainly, it should be borne in mind that any additional activity, such as e.g., catering activities, which include the preparation and serving of food, as well as the preparation and delivery of food to consumers for consumption elsewhere, may require obtaining certain permits and meeting the legal prerequisites for doing business.
Otherwise, it is common for the relationship with Merchants to be regulated by a business-technical cooperation agreement that allows the contracting parties to define their business relationship as they wish, or as lawyers would say by applying the principle of autonomy of will. This should provide clear and predictable cooperation between the contracting parties, in order to mutually improve business, work productivity, as well as expand the scope of work from the activities of the contracting parties.
E-commerce Business and Suppliers
On the other hand, the Business Entity establishes a business relationship with partners – Suppliers, who will be in charge of delivering food, shipments, groceries from the supermarket, i.e., all those things that can be “ordered” through the Platform.
According to the practice known to us so far, there are three ways to establish this business relationship.
Namely, the business entity can directly hire couriers, and establish an employment relationship with them.
Another way is to hire entrepreneurs who perform delivery activities.
However, most often, the Business Entity will enter into a business relationship with one partner who will hire couriers for the needs of the Platform’s business. In this case, there will be no direct relationship between the Business Entity and individual couriers. The partner company will be obliged to conclude contracts with individuals who perform the delivery. It can be any courier service or similar company that meets the legal requirements for this activity.
By the way, this type of trade is a trigger for the application of additional binding regulations, of which we single out the Law on Postal Services (“Official Gazette of RS”, No. 77/2019), which provides for the obligation to obtain approval for other postal services by RATEL (Regulatory Agency for Electronic Communications and Postal Services) for delivery of items via courier service.
In this regard, this obligation applies only to the Suppliers, so the Business Entity has the obligation to obtain the said approval only if within its business it also performs the activity of delivery, i.e., if he directly hires couriers and establishes an employment relationship with them.
E-commerce platform and Users
When it comes to the relationship with Users who, although not in a direct relationship with the Business Entity but with the Merchant since they buy or order a certain service, dissatisfied Users will still be able to file a complaint directly to the Business Entity through the Platform.
The role of the intermediary will be significant if the Merchant does not have facilities that are open to the public, so Users will not be able to access them for the purpose of processing complaints or refunds.
In that case, they must contact customer service for help and support through the channels available on the Platform. Of course, the Merchant will decide on the justification of the complaint.
The Law on Consumer Protection (“Official Gazette of the RS”, No. 62/2014, 6/2016 – other law and 44/2018 – other law) applies to Traders and Users who conclude a distance contract, while the Law on obligatory relations (“Official Gazette of the SFRY”, No. 29/78, 39/85, 45/89 – decision of the USJ and 57/89, “Official Gazette of the FRY”, No. 31/93, “Official Gazette of Serbia and Montenegro” , No. 1/2003 – Constitutional Charter and “Official Gazette of RS”, No. 18/2020) applies in a subsidiary manner to all situations that are not regulated by special regulations governing trade, which we have already mentioned. This law is especially important for the regulation of rights and obligations when the Users are legal entities.
What else to pay attention to
Considering that the Business Entity bases its income on the amount of turnover generated through the Platform, internet marketing is unavoidable.
Therefore, attention should be paid to the rules provided by the Law on Advertising (“Official Gazette of RS”, No. 6/2016 and 52/2019 – other law).
First of all, advertising must be done in a socially responsible manner, which means that advertising messages on the Platform must not be discriminatory, misleading, must not in any way endanger the health and safety of Users, must not incite hatred and intolerance, they must not refer to the sale of goods and provision of services that are prohibited by law, etc.
In this particular case we have internet advertising, which is defined in the law as “advertising on an Internet presentation, social network, application, or through another type of Internet communication, when the content of the advertisement undoubtedly indicates that it is aimed at recipients of advertisements from the Republic of Serbia and that the advertised goods or services can be purchased or delivered on the territory of the Republic of Serbia. ”
Internet advertising, as a rule, is done through banners, contextual messages and menus, specialized online magazines, etc. Presentations on your own internet domain (website) is not considered advertising.
When the transmitter of the advertising message is a service provider of information society, in terms of the law governing electronic commerce, as is the case with a Business Entity, there is a legal obligation to provide clear identification of the person being advertised during the advertising and 30 days after the termination of advertising.
Exceptionally, the Business Entity is not responsible for the content of the sent message and its sending, if it did not:
1) initiate the transfer;
2) select the data or documents to be transmitted;
3) exclude or change the data in the content of the message or documents;
4) select the transferee.
If, in the procedure of inspection supervision, the competent authority determines that the content of the advertising message is in conflict with the law, it shall order the decision on the transmitter of the advertising message to remove such message and leave him an appropriate deadline. The transmitter of the advertising message who does not act in accordance with the deadline specified in this decision, will be held responsible for the content of the advertising message, and all measures provided by this law may be imposed on him.
Having in mind the above, it is clear that the business entity must very carefully plan its internet campaign, i.e., the content of advertising messages, which will be in accordance with the legal rules.