New catalyst for economic development

The e-commerce industry in Pakistan is on the rise thanks to enablers like Amazon and Facebook who have taken a keen interest in the country’s online progress

There is no doubt that the e-commerce market has accelerated multi-fold in the last two years. Like many other industries, the retail landscape has undergone a substantial transformation following the advent of the internet, and thanks to the ongoing digitalisation of modern life, consumers from virtually every country now profit from the perks of online transactions. Previously, many retailers did not give as much importance to their online stores — but today, if in-store stock is low, store assistants offer to order pieces from the website to that very store, just for one customer. This surge has been seen everywhere, including Pakistan.

Pakistan has been on a mission for years to shake up its economy and create a cost-effective agenda to achieve broad commercialisation. As the population of the country grows, the internet user percentage also increased as the IT sector develops, leading to an overall acceleration of this mission.

In 2020, over two billion people purchased goods or services online, and during the same year, e-retail sales surpassed $4.2 trillion worldwide, according to Statista’s July report.

Several studies ratify that 18 per cent of all of Pakistan’s online retail sales took place in 2018. Forecasts show that by 2040, 95 per cent of all retail sales and purchases are expected to be made and facilitated online.

A study named ‘Journey to Digital’ by Google and Kantar states that overall, 66 per cent of internet users are based in urban areas while 47 per cent are based in rural areas. It also showed that 46 per cent of all Pakistanis access the internet every day. There is also evidence that internet usage surged due to Covid-19, before the lockdown, 79 per cent of internet users in urban locations accessed the internet daily, which grew by 10 per cent after lockdown restrictions were imposed and recorded that one-third of all internet users in Pakistan have made a purchase online and one-fourth of these shoppers have increased their spending during Covid-19 lockdowns.

At the fourth meeting of the National e-Commerce Council (NeCC), it was announced that Pakistan’s e-commerce market size has increased to Rs96 billion in the first quarter of the financial year 2021 as compared to Rs71 billion at the same time last year.

At the same meeting, the NeCC discussed several facets of e-commerce development in the country and have implemented various strategies, policies and councils to accelerate it. Topics like the operationalisation of cross border e-commerce procedures, different incentives to promote e-commerce, the introduction of international payment services, digital on-boarding services, e-commerce business facilitation portal, consumer protection councils, availability of broadband to remote areas, Trade Development Authority of Pakistan (TDAP)’s digital transformation process and collaboration with Small and Medium Enterprises Development Authority (Smeda) on e-commerce related matters.

The private sector is the main catalyst for the progress of e-commerce and digitalisation. Businesses have undertaken the transformation process and have prepared consumers to embrace e-commerce. Countless websites are doing well, a few popular ones are Zameen.com, to buy and sell property, Daraz.pk, for consumer goods, and Pakwheels.com, to buy and sell used cars.

A name that is synonymous with e-commerce in Pakistan is Saqib Azhar who is the CEO and Co-founder of Enablers, an organisation bent on showing the ropes of e-retail to Pakistani sellers and, in the long-term, eradicate poverty through job creation. He sees e-commerce as a prosperity enabler, dividing people into two categories. One, he helps his clients find avenues for e-commerce opportunities in the market; two, he provides them with the know-how on running an online venture to produce a living wage.

Another firm that performs a similar operation is Fishry.com, a retail software platform, founded by Badar Khushnood, which helps retailers build their online store from set-up to conversion and provides inventory management, shipping services, payment solutions and more.

With the pandemic, consumers were rushing online even for essential services, and while some have managed to transform from only in-person sales to online or in-person plus online sales/business models, many were left stranded. Fortunately, those retailers who do not have the resources to establish an online retail organisation are using the shopping platforms of Facebook, Instagram and e-commerce giant Amazon to create the market and visibility for their products.

In May, Amazon formally added Pakistan to the list of countries where sellers are allowed to be based. Sellers, traders and merchants can now easily sell their products on the site, a welcome change that has been cited as a digital economy catalyst. Abdul Dawood Razak, an adviser to the Pakistan Prime Minister, Imran Khan, tweeted that this move will open up various “opportunities for a new breed of young men and women entrepreneurs”. The negotiations began last year, and Amazon had initiated a pilot programme providing business advice to individual vendors and digital transformation support to an estimated 38 of the country’s biggest manufacturers.

In July, Facebook Marketplace also opened its figurative ‘doors’, to Pakistani merchants. It is also placing help centres where sellers can get assistance in Urdu. The Facebook Marketplace is also expected to boost women empowerment as it permits them to contribute economically, without having expensive physical means.

Consumers are also able to pay in rupees rather than US dollars, providing easy payment solutions enhancing usability. Now sellers, especially small business owners, won’t have to jump through hoops and find loopholes to sell their goods to international customers.

In short, with the help of Amazon, Facebook, and the NeCC the prospects of growth through online sales in Pakistan are huge and promising.

• Supplements