Home / Opinion / E-Commerce: The Vital Ingredient of Success Formula for Pakistan

E-Commerce: The Vital Ingredient of Success Formula for Pakistan


By SAHAL MANZOOR SHEIKH

Many years ago, people were alien to the concept of purchasing something from the internet. If someone had told you that you can order literally anything sitting on your couch, you’d have debunked it as a hoax. This renaissance of e-commerce is due to relatively larger penetration of the internet. The emergence of online marketplaces such as OLX and Daraz.pk has helped the businesses to grow and sell goods on the web. This has opened new avenues for other businesses and retailers, ranging from clothing outlets to hardware stores.  In the process, e-commerce has helped the economy of Pakistan and the number continues to grow.

E-commerce in Pakistan

E-commerce is a broader term and incorporates multiple sectors within it.  Currently, the following sectors are working in Pakistan:

Retail: This sector involves the online sale of products and goods. There are two avenues for retail e-commerce: marketplaces and brands. Daraz, shopping, and Goto are some examples of marketplaces operating in Pakistan.  Online brand stores deal in products they themselves produce. For example, clothing brands such as Outfitters, Engine, Leisure Club, Khadi, and Sapphire have opened their online stores. The retail market has the biggest revenue-generating potential.

Although, it is quite convenient to order something directly from home, there are other deterrents which stem from cultural factors. Families in Pakistan love going to malls together where impulse led shopping is a powerful tool. In addition to this, the traditional shopping method allows one to see the product and most importantly, to ask for a discount. These factors, no matter how little they look, have proved to be a huge impediment to online shopping.

Ali Express’s acquisition of Daraz

Founded in 2012, Daraz.pk became a giant in Retail E-commerce scene of Pakistan. It was incubated by Germany’s Rocket Internet and the company managed to achieve a record Rs1 billion sales in 2016 with its Black Friday event. The sales even tripled in the next years, earning Rs 3bn. Seeing the potential of Daraz in Pakistan, Bangladesh, Sri Lanka, and Myanmar, Alibaba Group acquired Daraz in a staggering $200 million deal.

Ride Hailing: When Pakistan opened its doors for Uber and Careem, no one realized that these companies would turn out to be this successful. Both of these companies are global giants and inspired many local startups in Pakistan. Bykea is a local startup and growing exponentially in its motorcycle-powered rides and parcel delivery business. Before these services, people had to wait for an hour to get a taxi and the cities were dominated by Auto rickshaws demanding a ridiculous amount of money. With the emergence of Uber and Careem, the waiting time has reduced while simultaneously making the rides much cheaper on average. Mobility has always been a challenge in Pakistan, especially for women. These companies have made mobility safer.

Uber’s acquisition of Careem

In a shocking deal of $3.1 billion, Uber acquired Careem’s mobility, payment businesses, and delivery across the greater Middle East region. The countries include Pakistan, Saudi Arabia, Egypt, Jordan, the United Arab Emirates, and Morocco. With this acquisition, Careem became a wholly-owned subsidiary of Uber. However, it will operate independently with the same team. This match made in heaven brings together Careem’s regional technology infrastructure and Uber’s global leadership. Together both the companies will be able to expand the reliability of services offered.

Classifieds: It includes a wide range of offerings from used cars to real estate. Sites such as OLX, Zameen, and PakWheels have been able to create a niche for themselves. However, most of the avenues in this category are saturated. There are no close competitors.

Future of E-commerce in Pakistan

Pakistan is one of the fastest growing e-commerce countries in Asia and could easily become one of the future destinations of emerging B2C e-commerce. The industry hasn’t reached its maximum potential yet. The sales were $622 million in 2017 which was only 0.34% of the retail market. The numbers are doubling every year and expected to reach1 billion US dollars by 2020. While these numbers are very less if compared with the global players in e-commerce, we are not far behind. The entrepreneurial culture is rising and the e-commerce in Pakistan reflects promising prospects with exponential growth.

E-commerce globally

The United States and China being the world’s two largest economies dominate e-commerce globally. Together, they accounted for more than half of the worldwide sale of physical goods.

China is the world’s No.1 e-commerce market. The online sales soar from $685.16 billion to $685.16 billion in 2017-2018. The reason why China touched this huge number is because of their growing middle class and huge demand for foreign goods. Asia is considered to be the “growth engine” for online sales. China managed to outpace the United States which is the second-largest global market in e-commerce. The consumers spent a staggering $449.88 billion on U.S. retail sites in 2018 and growth is expected to increase 15.6% every year.

In the United States and the rest of the world, Amazon.com has been the big shark. Amazon operates in a simple way. The retailer sells its own inventory and is given access to operate a marketplace on which other retailers sell their products through Amazon Platform. In return, Amazon takes a commission of each order. Amazon is the clear global winner in recent years when it comes to sales of retailers’ owned products. It has a 21.2% year-over-year growth. It is interesting to know that Amazon single-handedly accounted for 43.1% of all e-commerce growth in the United States. The company touched a giant chunk of online retail sales. On the other hand, Chinese rival mass merchant JD.com Inc. comes second on the global stage. Large retailers like Alibaba Group and Ebay Inc. operate as pure marketplaces as they don’t own any inventory.

Pakistan’s Internet Capacity

Pakistan has to cope up with the increasing reliance of its people on e-commerce. Therefore, the internet should be accessible in the urban centers and remote areas of the country. To meet this ever-increasing demand, an agreement has been signed between PEACE Cable International Network and Cyber Internet Services (Cybernet Pakistan). PEACE, which stands for Pakistan and East Africa Connecting Europe, is a privately owned 12,000km long cable system providing internet services to different countries. It is still under installation and will reach completion in the first quarter of 2020.

The system shall adopt latest 200G and WSS technology. It will be able to transmit 16 Tb/s per fiber pair. This cable system will connect the three most populated continents in the world. As a result, a total capacity of 96 Tb/s will be added to our internet infrastructure. Cybernet has always been on a mission to bring affordable and lightning fast broadband to the far reaches of Pakistan and this initiative will enable carriers to extend gigabit speeds to the people. This agreement will also be instrumental in meeting the exponential growth in bandwidth demand from internet users in Pakistan.

E-commerce is empowering youth with Entrepreneurial Culture

With the creation of promising e-commerce stratosphere, Pakistan’s government and leading institutes are fostering budding entrepreneurs to help them in their startups. All of this is being done in the bid to empower the youth in creating jobs than settling for one.  The institutes like LUMS, NUST, FAST, GIKIST, and COMSATS are nurturing IT-based startups and have been able to produce some of the finest individuals with entrepreneurial acumen. The incubates are offered scholarships, grants, and infrastructure to hone their skills and secure a foothold in the corporate industry. The Punjab Government has created Plan9 which is a tech incubator helping striving entrepreneurs to expand their startups.

Small and medium enterprises (SMEs) are pushing Pakistan’s entrepreneurial drive to new heights. Presently, they account for 90% of the business economy and roughly 40% of our entire GDP. With the incorporation of more and more SMEs, millions of new jobs are generated which in turn creates a high-engaging online user base. Therefore, lower to upper-middle-income strata can engage with online shopping platforms and dispense their income on services and physical goods. The success of e-commerce is contingent upon the size of Pakistan’s working class and will continue to pave its way in becoming a key figure in the global e-commerce arena.

How e-commerce is helping the economy of Pakistan?

The digital revolution is helping the economy of Pakistan. The digitalization helps the businessmen in a number of ways. The conventional exchange involved multiple agents such as producers, wholesalers, transporters, and consumers. With the emergence of e-commerce, the middle parties are bypassed allowing direct dealing between buyers and suppliers. The leading producers of apparel, food, smartphones, and electronic industries have online e-retailing channels in place. Internet is accessible in the remotest areas of the country and more than 62 million people use the internet. The cash on delivery services has increased consumer trust and satisfaction. All of this is contributing to the economy in the macroeconomic perspective.

McKinsey Global Institute (MGI) issued a report which stated that Pakistan can experience a seven percentage points increase in its GDP and can create four million new jobs till 2025 by the increasing usage of digital financial services alone. Pakistan’s e-commerce market has nearly doubled to Rs 40bn and with the right attitude of Government, investment in startups and SMEs, and facilitation to the global giants the numbers will grow even more.

 The writer is former general manager and strategist of two leading hotels in Istanbul,

Turkey and is currently serving as Head of Sales in Bima Mobile Pakistan (Ltd). He can be reached at: sahalmanzoor@gmail.com

Comment Using Facebook

Check Also

NCA student wins international film award in India

By Bilal Naveed LAHORE (Tuesday, November 09, 2020): Maria Javed, a student of National College …

144 comments

  1. I like the valuable information you provide in your articles. I will bookmark your weblog and check again here frequently. I’m quite certain I will learn many new stuff right here! Good luck for the next!

  2. Does your site have a contact page? I’m having problems locating it but, I’d like to send you an e-mail. I’ve got some recommendations for your blog you might be interested in hearing. Either way, great website and I look forward to seeing it improve over time.

  3. I loved as much as you’ll receive carried out right here. The sketch is attractive, your authored material stylish. nonetheless, you command get bought an edginess over that you wish be delivering the following. unwell unquestionably come more formerly again since exactly the same nearly very often inside case you shield this increase.

  4. I wanted to thank you for this fantastic read!! I definitely loved every bit of it. I have you book marked to check out new things you post…

  5. It’s onerous to find educated individuals on this topic, but you sound like you understand what you’re talking about! Thanks

  6. After study just a few of the blog posts on your website now, and I truly like your way of blogging. I bookmarked it to my bookmark web site checklist and will probably be checking again soon. Pls try my website as properly and let me know what you think.

  7. I don’t even know how I ended up here, but I thought this post was good. I do not know who you are but certainly you’re going to a famous blogger if you are not already 😉 Cheers!

  8. certainly like your web site but you have to take a look at the spelling on quite a few of your posts. Many of them are rife with spelling problems and I to find it very bothersome to inform the truth then again I’ll surely come back again.

  9. I’m not sure where you are getting your information, but great topic. I needs to spend some time learning more or understanding more. Thanks for great info I was looking for this info for my mission.

  10. Hi there! I know this is somewhat off topic but I was wondering if you knew where I could locate a captcha plugin for my comment form? I’m using the same blog platform as yours and I’m having problems finding one? Thanks a lot!

  11. Have you ever thought about including a little bit more than just your articles? I mean, what you say is important and everything. But just imagine if you added some great pictures or videos to give your posts more, “pop”! Your content is excellent but with pics and clips, this blog could definitely be one of the greatest in its field. Great blog!

  12. Thanks on your marvelous posting! I really enjoyed reading it, you might be a great author.I will always bookmark your blog and will often come back from now on. I want to encourage you to continue your great posts, have a nice evening!

  13. Hey There. I found your weblog the use of msn. This is an extremely smartly written article. I’ll be sure to bookmark it and come back to read more of your useful info. Thank you for the post. I will definitely return.

  14. great issues altogether, you simply received a emblem new reader. What would you recommend in regards to your submit that you simply made some days ago? Any certain?

  15. I will immediately grab your rss feed as I can’t find your e-mail subscription link or e-newsletter service. Do you have any? Kindly let me know so that I could subscribe. Thanks.

  16. I’ve been absent for some time, but now I remember why I used to love this blog. Thank you, I’ll try and check back more often. How frequently you update your site?

  17. Usually I do not read post on blogs, but I wish to say that this write-up very forced me to try and do it! Your writing style has been surprised me. Thanks, very nice article.

  18. Very good blog! Do you have any tips for aspiring writers? I’m hoping to start my own site soon but I’m a little lost on everything. Would you recommend starting with a free platform like WordPress or go for a paid option? There are so many options out there that I’m completely confused .. Any recommendations? Thank you!

  19. What i don’t realize is in fact how you are now not really much more smartly-appreciated than you might be now. You are so intelligent. You recognize thus significantly in the case of this topic, made me in my opinion imagine it from a lot of numerous angles. Its like men and women aren’t involved unless it is something to do with Woman gaga! Your personal stuffs excellent. All the time deal with it up!

  20. I would like to thank you for the efforts you’ve put in writing this website. I’m hoping the same high-grade web site post from you in the upcoming as well. In fact your creative writing abilities has inspired me to get my own blog now. Really the blogging is spreading its wings rapidly. Your write up is a great example of it.

  21. I dugg some of you post as I cogitated they were very helpful handy

  22. Wonderful blog! I found it while searching on Yahoo News. Do you have any tips on how to get listed in Yahoo News? I’ve been trying for a while but I never seem to get there! Cheers

  23. Valuable information. Lucky me I found your site accidentally, and I am shocked why this coincidence did not happened in advance! I bookmarked it.

  24. I am curious to find out what blog system you happen to be utilizing? I’m experiencing some minor security problems with my latest site and I’d like to find something more safe. Do you have any recommendations?

  25. Heya i’m for the first time here. I came across this board and I find It truly useful & it helped me out a lot. I hope to give something back and aid others like you aided me.

  26. Hmm is anyone else having problems with the images on this blog loading? I’m trying to figure out if its a problem on my end or if it’s the blog. Any feed-back would be greatly appreciated.

  27. There are certainly a variety of details like that to take into consideration. That is a great point to deliver up. I provide the ideas above as common inspiration but clearly there are questions like the one you carry up the place crucial factor will probably be working in trustworthy good faith. I don?t know if greatest practices have emerged round issues like that, however I am sure that your job is clearly recognized as a good game. Each boys and girls feel the influence of just a moment’s pleasure, for the remainder of their lives.

  28. My coder is trying to convince me to move to .net from PHP. I have always disliked the idea because of the expenses. But he’s tryiong none the less. I’ve been using WordPress on several websites for about a year and am worried about switching to another platform. I have heard very good things about blogengine.net. Is there a way I can import all my wordpress content into it? Any help would be really appreciated!

  29. I do not even know how I ended up here, but I thought this post was great. I don’t know who you are but definitely you are going to a famous blogger if you aren’t already 😉 Cheers!

  30. It’s actually a nice and helpful piece of information. I’m happy that you simply shared this helpful info with us. Please stay us up to date like this. Thanks for sharing.

  31. Great info and straight to the point. I don’t know if this is really the best place to ask but do you folks have any thoughts on where to get some professional writers? Thanks 🙂

  32. What’s Happening i am new to this, I stumbled upon this I have found It absolutely helpful and it has helped me out loads. I hope to contribute & aid other users like its aided me. Good job.

  33. It’s in point of fact a great and useful piece of information. I am happy that you shared this helpful information with us. Please keep us informed like this. Thank you for sharing.

  34. I liked as much as you’ll receive performed proper here. The comic strip is attractive, your authored material stylish. nonetheless, you command get bought an nervousness over that you would like be delivering the following. sick no doubt come more in the past again since precisely the similar nearly very regularly inside of case you shield this increase.

  35. Very great post. I simply stumbled upon your blog and wanted to mention that I have really enjoyed browsing your weblog posts. After all I will be subscribing on your rss feed and I am hoping you write again soon!

  36. Wow that was odd. I just wrote an incredibly long comment but after I clicked submit my comment didn’t show up. Grrrr… well I’m not writing all that over again. Anyway, just wanted to say superb blog!

  37. Hi, Neat post. There’s an issue with your site in web explorer, could test this… IE still is the marketplace chief and a big component to people will omit your fantastic writing because of this problem.

  38. Hi there! I’m at work surfing around your blog from my new iphone 3gs! Just wanted to say I love reading your blog and look forward to all your posts! Carry on the excellent work!

  39. A powerful share, I just given this onto a colleague who was doing somewhat evaluation on this. And he in actual fact purchased me breakfast as a result of I found it for him.. smile. So let me reword that: Thnx for the deal with! However yeah Thnkx for spending the time to discuss this, I really feel strongly about it and love studying more on this topic. If possible, as you become experience, would you thoughts updating your blog with more details? It’s highly helpful for me. Huge thumb up for this blog put up!

  40. It’s perfect time to make some plans for the future and it is time to be happy. I’ve read this post and if I could I want to suggest you some interesting things or tips. Maybe you can write next articles referring to this article. I want to read more things about it!

  41. We’re a bunch of volunteers and starting a new scheme in our community. Your site provided us with helpful information to work on. You’ve performed an impressive process and our whole community can be thankful to you.

  42. hey there and thank you for your information – I’ve definitely picked up something new from right here. I did however expertise several technical points using this web site, since I experienced to reload the web site lots of times previous to I could get it to load correctly. I had been wondering if your web hosting is OK? Not that I am complaining, but slow loading instances times will sometimes affect your placement in google and can damage your high quality score if ads and marketing with Adwords. Well I’m adding this RSS to my e-mail and could look out for a lot more of your respective fascinating content. Make sure you update this again soon..

  43. Hey very nice blog!! Man .. Excellent .. Amazing .. I’ll bookmark your website and take the feeds also…I am happy to find a lot of useful information here in the post, we need work out more techniques in this regard, thanks for sharing. . . . . .

  44. Generally I do not read post on blogs, but I would like to say that this write-up very forced me to try and do it! Your writing style has been surprised me. Thanks, quite nice article.

Leave a Reply

Your email address will not be published.