How the Grey Economy Thrives Through Social Media
One Click to Buy, One Step Away from Fraud, Millions of Euros Beyond Oversight
From products that do not match their online photos to sellers who delete their social media profiles immediately after completing a sale, online shopping in Montenegro continues to carry numerous risks. While some vendors previously earned several thousand euros per month by reselling goods ordered from platforms such as AliExpress and Shein through Instagram and Facebook, the market has changed significantly in recent years. Consumers have discovered these platforms for themselves and are increasingly bypassing intermediaries. Meanwhile, inspectors warn that a substantial share of sales conducted through social media remains beyond the reach of the law, operating without registration, invoices, or consumer protection.
In joint operations carried out by the Market Inspectorate and the Police Directorate targeting goods distributed through courier services, merchandise lacking proof of origin, as well as counterfeit products, was confiscated in 25 cases over the past three years. “The total value of the seized goods amounted to EUR 32,202,” the Ministry of Economic Development told CdM.
Since the beginning of 2026, 26 inspection procedures have been initiated following complaints submitted by citizens. The most common grievances relate to products that do not match the photographs or descriptions presented in advertisements, delivery delays, and situations in which the final price of a product exceeds the amount displayed when the order was placed.
The Ministry warns that a significant portion of sales conducted through social media is not compliant with the Law on Internal Trade and the Consumer Protection Act. “Since individuals selling goods through social media are not registered in the Register of Traders, they do not have the legal status of traders under the applicable regulations. Consequently, consumers in such cases cannot exercise the rights guaranteed to them under the Consumer Protection Act,” the Ministry explained.
The Profile Disappears, the Problem Remains
The Market Inspectorate notes that in several cases it has established that individuals were conducting online sales without registering a business activity, after which they were brought into the formal economy. However, the greatest challenge remains identifying the sellers themselves. “In a large number of cases, inspectors’ work is hindered because individuals delete their Facebook or other social media profiles after completing sales,” the Inspectorate stated.
For inspectors to initiate proceedings, it is necessary to establish the identity of the person conducting the sale. If this cannot be done, the competent authorities lack a legal basis for taking further action. For this reason, the Ministry urges citizens to exercise caution when purchasing goods through anonymous profiles and websites that do not clearly identify the trader.
Enormous Profits
One former online seller (whose identity is known to the editorial team), who sourced goods through platforms such as AliExpress and Shein, told CdM that this type of business used to generate substantial profits but that the market has since changed completely. “Several years ago, this was a very lucrative business. During the summer months, I could earn several thousand euros per month. At the time, people were not familiar with these platforms, they did not know how to place orders, and they were unaware of how easy it was to obtain the same products directly from abroad,” he said.
According to him, the most commonly sold products included swimwear, fashion accessories, and small electronic devices that were popular on social media. “We followed trends, ordered products, waited for deliveries, and then resold them through Instagram and Facebook. Customers appreciated not having to wait several weeks, as they could receive the product immediately,” he explained.
He added that a portion of these sales took place outside formal business channels and without registered commercial activity. “It was not like running a traditional store. Many people operated through private profiles without registering a business because it was easier that way. While demand remained high, the earnings were considerable. During the summer, for example, we could make between EUR 5,000 and 6,000,” he said.
However, according to him, the situation has changed dramatically in recent years. “People discovered AliExpress, Shein, and other websites on their own. Now they know they can order the exact same products, often at lower prices, directly for themselves. Once they learned that, business started to decline. Many sellers shut down their pages or reduced their operations to a minimum,” he said.
He believes that the greatest challenge for such sellers today is the loss of the advantage they once enjoyed. “In the past, we acted as intermediaries between customers and products. Today, customers have exactly the same access that we do. If they can place orders themselves and wait for delivery, there is no reason for them to pay extra,” he concluded.
Another interviewee told CdM that she started baking pastries and cakes at home and selling them through social media in order to earn additional income. “At first, I did not think about registration because everything began as a small, occasional activity, and I did not expect the number of orders to grow. Of course, I now understand that selling food is different from selling many other products. Food production carries significant responsibility towards those who consume it. Without a registered business and oversight of production conditions, problems can arise—from hygiene risks to liability if someone becomes ill. I am aware that this way of operating poses risks both for me and for my customers. The safest option is to formalise the business, meet the required standards, and operate legally. However, many people who start small businesses initially choose this route through the internet because registration represents an additional cost and obligation,” she said.
Registered Traders Seek Greater Protection from Unfair Competition
While inspectors warn of the growing volume of illegal sales through social media, registered online retailers argue that stronger protection against unfair competition is essential for the healthy development of the market.
Representatives of eKupi Montenegro told CdM that they protect themselves from illegal sellers primarily through transparent business practices and full compliance with legal obligations. “We strive to be as transparent as possible by clearly displaying company information, ensuring secure online shopping, and maintaining regular communication with customers through official channels. Customer trust is built over time and cannot be achieved through anonymous social media profiles,” they said.
They believe that Montenegro’s online market is progressing, but that there is still room for more effective oversight and stronger measures against illegal sales. “It is necessary to further improve supervision of illegal trade, strengthen the protection of registered traders, and increase consumer awareness in order to make the market safer and fairer for all participants,” the company concluded.
Digital Sales Beyond the Authorities’ Radar: Tax Administration Lacks Data on the True Scale of the Grey Economy
Alongside market inspections, the Tax Administration of Montenegro plays an important role in combating informal online trade. It told CdM that it continuously monitors activities that may constitute forms of the informal economy, including the sale of goods and services through social media platforms such as Instagram and Facebook. “A particular challenge in monitoring this segment is the fact that unregistered sales are most often conducted from private residential premises through social media, without readily available information on the place of business, payment methods, delivery channels, or the identity of the individual generating income,” the Tax Administration stated.
The institution carries out activities aimed at identifying undeclared business activities and monitoring compliance with tax regulations, including entities operating through online platforms and social media channels. “However, effective oversight of this form of business requires establishing the seller’s identity, the location where the activity is carried out, and the methods of payment and delivery, which makes the process highly complex,” officials explained.
One of the factors that previously limited enforcement efforts was the inability to conduct inspections in private residential premises where unregistered activities often take place. Amendments to the Law on Misdemeanours have now enabled inspectors, with a court order, to conduct inspections in apartments and other premises where business activities are carried out. “This amendment represents an important step towards more effective suppression of unregistered business activities, including informal online trade through social media. In the coming period, increased efforts are expected in detecting and sanctioning undeclared business operations in this area, in accordance with legal powers and available capacities,” the Tax Administration stated.
The Tax Administration also reminds citizens that they can report suspected cases of undeclared sales, failure to issue invoices, or other irregularities to the competent authorities, thereby contributing to the fight against the grey economy and helping create a level playing field for all market participants. “When it comes to estimating the scale of the informal online economy, there is currently no precise assessment of its overall volume, given the specific nature of this form of business and the fact that a large share of activities takes place through digital channels that are not registered as formal places of business,” the Administration noted.
Millions of Euros Outside Legal Economic Flows
Economist Jovan Rabrenović from the Institute of Economic Sciences warns that online commerce in Montenegro is no longer a marginal sales channel. According to data from the Statistical Office of Montenegro (MONSTAT), during 2025, 62.4% of citizens aged between 16 and 74 purchased or ordered goods and services online at least once, while as many as 89% used social media platforms.
“As legal e-commerce expands, so does its informal counterpart – sales conducted through Instagram, Facebook, and other networks without registration, fiscal receipts, product declarations, guarantees, or a clearly identifiable seller. This is no longer occasional trading through private profiles; it has become a segment of the grey economy that affects the state budget, consumers, and registered traders alike,” Rabrenović assessed.
According to him, the problem extends beyond lost tax revenue and includes unfair competition. “A registered trader pays taxes, social contributions, fiscalisation costs, and must comply with consumer protection regulations. An unregistered seller usually avoids these obligations and can therefore offer lower prices. Such an advantage ultimately undermines fair market competition,” he explained.
Montenegro does not maintain a separate record of transactions conducted through social media, but estimates suggest that the value involved amounts to tens of millions of euros annually. “According to working estimates, unregistered sales through social media could be worth between EUR 30 million and EUR 70 million per year, while the direct fiscal loss to the state could range from EUR 6 million to EUR 15 million. These are not official figures, but estimates indicating that the problem is far from marginal,” Rabrenović said.
He added that the key issue is not the severity of penalties, but the low probability of detecting offenders. “Anonymous profiles must not remain a safe haven. The focus should shift from occasional enforcement campaigns to continuous digital monitoring and the integration of data relating to advertisements, deliveries, payments, and courier shipments,” Rabrenović argued.
The Ministry reminds consumers that purchasing goods through illegal websites or anonymous social media profiles carries significant risks. “Websites that state that product exchanges are possible only within 24 or 48 hours, refuse refunds, or fail to provide information about the trader’s address and contact details should be avoided,” the inspectors warned.
Rabrenović added that consumers often fail to distinguish between purchases made from a registered online store and those made through anonymous profiles. “The problem becomes apparent only when the goods never arrive, do not match their description, or stop functioning, while the seller ceases all communication. At that point, consumers are often left without basic evidence and without any realistic means of enforcing their rights,” he said.
Particular attention has been given to so-called sweep actions—systematic inspections of online marketplaces modelled on practices used across the European Union. According to the Ministry, the latest such operation was carried out during February and March of this year. “Twenty-three online stores offering clothing, footwear, household appliances, mobile phones, and IT equipment were inspected. Four irregularities were identified, four administrative decisions were issued, and eight misdemeanor fines totalling EUR 3,000 were imposed,” the Ministry told CdM.
A third large-scale online trade inspection campaign is currently underway and will continue until the end of June.
A Systemic Response Is Needed
Rabrenović believes that occasional enforcement actions alone are not enough and that Montenegro requires a dedicated operational plan for monitoring the digital marketplace. “The problem is not online commerce itself. On the contrary, it can contribute to the formalisation of the economy. The real issue is anonymous and unregistered selling. What is needed is a system that connects consumer protection authorities, the tax administration, customs authorities, courier services, and digital platforms, ensuring that consumers know who they are buying from and that registered traders operate under equal conditions,” Rabrenović concluded.
According to the Postal Services Development Strategy through 2028, consumers in Montenegro spend an average of EUR 433 per person on online purchases, while the average across EU countries stands at approximately EUR 1,020 per user. “The average revenue per user is expected to reach EUR 675.5 by 2027, representing an increase of 52.45% compared to the previous year. E-commerce revenues are projected to reach EUR 214 million, an increase of 75.86% compared to the previous year. The expected annual growth rate through 2027 is 12.12%, exceeding the 8.93% recorded in Central and Western Europe,” the Strategy states.
The number of e-commerce users in Montenegro is expected to reach 316,600 by 2027, representing an increase of 15.25% compared to the previous year.
As Montenegro’s online marketplace continues to expand, the question of how it should be regulated becomes increasingly important. The objective is not to restrict e-commerce, but rather to create a system in which consumers know who they are buying from, traders operate under equal conditions, and the same rules apply to all market participants.
Slađana Đukanović
Originally published on the CdM portal.
This article was produced within the framework of the MediaLit project, implemented by the Centre for Civic Education (CCE) in partnership with the Helsinki Committee for Human Rights in Serbia, the Helsinki Committee for Human Rights in North Macedonia, the Tirana Centre for Journalism Excellence in Albania, and the Atlantic Initiative in Bosnia and Herzegovina. The project is funded by the European Union and co-funded by the Ministry of Regional Investment Development and Cooperation with Non-Governmental Organisations of the Government of Montenegro. The content of this article is the sole responsibility of the author and does not necessarily reflect the views of CCE, the partner organisations, the European Union, or the Ministry.