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Pakistan’s e-commerce market on the rise

F.P. Report

ISLAMABAD: The number of registered e-commerce merchants has witnessed more than 2.6 times rise in recent time amid 3G/4G services and availability of cheaper smartphones and Internet packages.

Pakistan has one of the highest rates of mobile and Internet penetration in South Asia, with 40 million Internet subscribers and 20 million Facebook users.

This visible growth has encouraged many retailers to operate their own websites or use online marketplaces to sell their products. Nevertheless, there is still much room to grow.

According to statistics, over $54.47 billion sales were reported in 2017 just by Amazon in the United States, while in comparison, Pakistan’s e-commerce sales amounted to $622 million in 2017 and projected to cross the $1 billion mark by 2020.

Apart from technology, some of the factors that have served as a catalyst to e-commerce growth include ease of purchasing, availability of cash on delivery option, a variety of products to choose from and customer reviews and feedback on social media.

A senior official of Corporate Innovation at Excellence Delivered (ExD), one of the largest technology services company of Pakistan, has said there has been a significant demand for e-commerce services from both tier 2 and tier 3 cities.

“Although it is a fairly new trend in business for Pakistan, the online shopping trend is spreading quickly,” the official said and explained mechanics behind e-commerce, outlining that the primary payment method currently being used is Cash on Demand (COD) where over 90 per cent of online purchases are paid for by COD at time the customers receive the package.

It is interesting to note that around 35 per cent of country’s monthly 70,000 COD shipments are delivered outside of Karachi, Lahore, and Islamabad. It shows that despite the fact that online shoppers are largely from the urban areas, rural shoppers are also willing to go online to make purchases for goods they cannot find in local markets.

This high growth in terms of sales and consumer preference has also encouraged brands to rethink their strategy with regards to conventional retail channels and try alternate e-Commerce methodologies. Quality of products is also an issue which should be addressed by online retailers to boost consumers’ confidence.

 

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