How Iranians Actually Shop Online

Picture a typical purchase in Tehran. Someone spots a coat they like on an Instagram page with forty thousand followers. There is no “buy” button. Instagram is officially blocked in Iran, and no one is running a checkout plugin anyway. So the buyer sends a direct message. The seller replies with a price and a bank card number. The buyer transfers the money card to card, sends back a screenshot as proof, and a few days later a courier knocks. No marketplace took a commission. No platform logged the sale. As far as the official numbers are concerned, that transaction barely happened.

Now multiply it by several hundred thousand shops.

This is the part of Iran’s digital economy that almost never makes it into the English-language story, and it is the reason the usual framing (“Digikala is the Amazon of Iran, and the rest of retail is offline”) is wrong. Iran does have a dominant marketplace. It also has one of the most vibrant informal social-commerce economies anywhere in the world, sitting right next to it, often invisible to the very metrics people quote. To understand how money actually moves through Iranian retail, you have to look at three layers, not one.

Layer one: the marketplaces

This is the part that looks familiar. Digikala is the giant. It pulls something like forty million monthly users and runs a fulfilment network it describes as the largest in the Middle East. By most counts it holds around sixty percent of Iran’s formal online retail, the slice that flows through proper platforms with carts, invoices, and warehouses.

But Digikala is not alone here, and that matters. Snapp, which started as the local Uber, has become a super-app: rides, food, groceries through SnappMarket, travel, even medical bookings, all in one place. Basalam has carved out a lovely niche as a digital bazaar for handmade goods and regional products, deliberately keeping the feel of a real marketplace where you talk to actual sellers. And Torob, which people often miscount as a store, is really a price-comparison engine. It does not sell anything. It aggregates listings across Digikala and hundreds of smaller shops so buyers can hunt for the best price, which tells you something on its own: in an economy this volatile, price discovery is a product.

Layer two: Instagram, the shadow mall

Here is where it gets genuinely unusual. Social commerce, almost all of it on Instagram, accounts for roughly forty percent of Iran’s online retail. Not a rounding error. Close to half.

The numbers are slippery by nature, because most of these sales never touch a trackable system. But even the conservative figures are striking. The Tehran Chamber of Commerce has put the count at more than five hundred thousand Instagram-based shops supporting around a million jobs. Older studies went much higher. When researchers ask Iranian online businesses which platform they depend on, a clear majority name Instagram.

Think about what that means. The single largest channel in Iranian online retail is a foreign app that the government officially filters, reached mostly through VPNs, with no native payment rail and no formal logistics. People built a multi-billion-dollar shadow mall on top of a banned platform, using DMs and card transfers as the checkout. It is a monument to how Iranians route around constraints, and it is exactly the kind of thing you cannot see from a spreadsheet of registered e-commerce companies. Quote a tidy figure for “Iranian e-commerce” and you have probably missed close to half of it.

Layer three: the classifieds

The third layer is peer-to-peer. Divar and Sheypoor are the big names, the local equivalents of Craigslist or OLX, where Iranians buy and sell cars, property, phones, and furniture directly. The volumes here are enormous, and again they sit outside the marketplace numbers entirely. Divar alone is one of the most-used services in the country. So “online retail” in Iran spans formal marketplaces, informal social shops, and a massive peer-to-peer world, three things that rarely get counted together.

So how big is it, really?

Honestly, it depends who you ask, and the spread is wide. Statista’s broad e-commerce figure for Iran lands near sixteen billion dollars for 2025, while narrower retail-only estimates come in far lower. Currency is part of the problem: with the rial swinging hard, any dollar figure is a snapshot of a moving target. What is not in doubt is the shape. E-commerce is still a modest share of total retail, most shopping in Iran still happens in physical stores and bazaars, but the online portion is growing fast and is split in a way you do not see elsewhere, with informal social commerce nearly matching the formal marketplaces. To see why, it helps to look over the border.

What a “normal” market looks like: the Gulf benchmark

In the UAE, e-commerce is around sixteen percent of total retail and climbing. In Saudi Arabia it sits near ten to twelve percent, up from under five percent in 2019. These are real, fast-maturing markets: the UAE’s is worth roughly seventeen billion dollars, Saudi’s around sixteen. And critically, they are consolidated. Two players dominate the Gulf: Amazon, which entered by buying Souq and now runs Amazon.ae and Amazon.sa, and Noon, the homegrown challenger backed by Gulf capital. In the UAE, Amazon is number one and Noon is number two.

Now hold that next to Iran. No Amazon. No Noon. No Visa, Mastercard, PayPal, or Stripe. Sanctions wall the country off from every global platform and payment network that shaped the Gulf. That single fact explains almost everything. The vacuum got filled two ways at once: by a strong domestic champion (Digikala) on the formal side, and by a sprawling, improvised Instagram economy on the informal side. The Gulf normalized around two big platforms. Iran fragmented around a banned app and a local giant. Same region, completely different physics. This is the comparison international readers almost never get, and it is the kind of context Tehran Index exists to provide.

The anchor case: why Digikala is more than a store

If Instagram is the surprise, Digikala is still the anchor, and it rewards a closer look, because it is not really a shop. It is a holding company.

Underneath the marketplace sit around sixteen operating companies: payments and buy-now-pay-later through Digipay, last-mile logistics through DigiExpress and Optime, B2B procurement, fashion via Digistyle, fast grocery via Digikala Jet, books and content via Fidibo, cloud, and more (the full map lives on the Digikala Ecommerce Group page). In its latest annual report, group revenue grew close to ninety percent year on year, with credit-based purchases up well over a hundred percent. This is the emerging-market playbook that worked for Mercado Libre in Latin America and Coupang in Korea: wrap commerce in payments and logistics so each part feeds the others.

The most underappreciated piece is advertising. Digikala runs a retail-media business, DigikalaAds, that already commands roughly fifteen percent of Iran’s entire online ad market. It grew ad revenue several times over in a single year, and by the most recent count around nine thousand sellers were buying ads on the platform. That is the high-margin engine hiding behind the storefront. Once you own the demand, you sell access to it back to your own sellers, the same move that makes Amazon’s ad business so profitable, running quietly inside Iran.

Digikala is even pushing in the opposite direction from where you would expect. It has opened a flagship physical store in Tehran’s Royal Mall, launched its first supermarket, and partnered with Hamrah-e Aval, the country’s largest mobile operator, on a joint store. For an online leader, going offline sounds backwards. It is not. It is a bet that the way to capture more of Iranian retail is to blend online and offline into one funnel, with the data flowing back to the platform.

There is a much bigger story behind that partnership. In 2024, Hamrah-e Aval acquired around forty percent of Digikala Group through its investment arm, Harkat Aval, in a deal that valued the group at roughly thirty thousand billion toman, about half a billion dollars at the time. It was the largest investment in the history of Iran’s digital economy. The founders kept about twenty-two percent and day-to-day control, while early backer Sarava exited. So the joint store is not a one-off marketing tie-up. It is the visible tip of a telecom operator and the country’s largest marketplace deciding to build the next phase together, and a sign that serious domestic capital is now flowing into Iranian tech at scale.

And here is the part worth sitting with. Half a billion dollars, for the dominant marketplace in a country of more than ninety million people, with around forty million monthly users and close to half a million sellers. Put that next to Souq.com, the company once called the Amazon of the Middle East. Amazon bought Souq in 2017 for about five hundred and eighty million dollars, and Souq had been valued close to a billion before that, all while serving a handful of Gulf and North African markets. Digikala reaches a larger single population than Souq did, runs more of its own logistics and payments in house, and still carries a price tag in the same range, set years later, after the rial had already lost much of its value. In an open market, with global acquirers free to bid and capital free to move, a business at this scale would almost certainly fetch several times that number, quite possibly an order of magnitude more. The gap has little to do with the company. It is sanctions, currency, and the simple fact that the usual buyers cannot get in. That is the optimistic reading hiding in plain sight: the discount is geopolitical, not operational, and geopolitics is the one thing that can change overnight.

The data nobody else has

Here is the part that turns Digikala from an interesting company into something more useful: it can read the economy. Its own market-insight reports, built from real purchase data, work like an X-ray of a country under stress.

In one recent stretch, purchases of melted gold jumped enormously while decorative gold barely moved. People were not buying jewellery. They were buying a hedge, converting a shopping cart into a savings account as the rial fell, and a majority told the platform’s survey they buy gold specifically to save. The same data showed a quiet infrastructure crisis, with big jumps in generators, water pumps, and dashcams, sitting right next to an aspirational basket of matcha, specialty tea, and sunscreen. A young, globally wired population reaching for the good life while bracing for the next shock. When official numbers are thin, what forty million people actually buy is one of the most honest readings of a closed economy that exists. Digikala generates that signal. Reading it, structuring it, and making it legible to outsiders is precisely the job Tehran Index is built for.

The catch

None of this comes without hard caveats, and pretending otherwise would be a disservice. The whole system runs on domestic rails by necessity, which is both a moat and a ceiling. The rial is volatile enough that any valuation is written in pencil. Disclosure is thin, with Tapsi’s 2022 listing still standing as the ecosystem’s landmark tech IPO, so funding and valuation data is scarce by default.

But notice that every one of these frictions is also a reason the market stays under-built and under-mapped. Saturated markets are easy to enter and hard to grow in. Iran is the reverse, hard to enter, with enormous room to grow, and almost nobody outside the country can see clearly into it.

The bottom line

Iran’s online economy is not a single company and a wall of offline shoppers. It is a layered, fast-moving system: a dominant marketplace that is really a holding company, an Instagram economy that rivals it in size, a vast classifieds world beside both, and a young, inventive population that keeps finding new ways to buy and sell. The Gulf normalized around Amazon and Noon. Iran built something more improvised, and in its own way more resilient.

Here is the optimistic case, and it is a strong one. This is a market of more than ninety million people, with deep engineering talent, near-universal smartphone use, and an appetite for new products that holds up even under pressure. The very things that make it hard to enter are the things that have kept it under-built and wide open. Serious capital is now starting to move, with the forty percent Digikala deal as the clearest signal yet that real money sees what is here. When the friction eases, even a little, the upside is large, and the companies already operating inside Iran will hold a head start that outsiders cannot simply buy.

That is the opportunity Tehran Index exists to make legible. Not just that Iran’s digital economy is big, but how it is built, who is creating the value, and where the next chapter is heading. For anyone serious about emerging markets, this is one of the last great untold stories in global technology. We intend to tell it, clearly and credibly, before the rest of the world catches on.

Commerce is one layer of a bigger map. For the whole picture, see our field guide to Iran’s digital economy.