Pakistan’s e-Commerce Sector Still Holds a Lot of Untapped Potential

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In recent years, Pakistan’s e-Commerce market has experienced exponential growth, with registered e-Commerce merchant numbers rising by more than 2.6 times. This is primarily because of the introduction of 3G/4G services and availability of cheaper smartphones. At 72% 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.

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Nevertheless, there is still much room to grow. According to Statista, in US, over USD 54.47 billion sales was reported in 2017 just by Amazon. In comparison, Pakistan’s e-Commerce sales amounted to $622 million in 2017 projected to cross the $1 billion mark before year 2020.

Apart from technology, some of the factors that have served as a catalyst to e-Commerce growth have been ease of purchasing while sitting at home, availability of cash on delivery option where you only pay when you get the product, variety of products to choose and customer reviews and feedback on social media.

And this growth is not just limited to the major cities of Pakistan.  According to Jawad Farid, Head of Corporate Innovation at Excellence Delivered (ExD), one of the largest technology services company of Pakistan, there has been a significant demand for e-Commerce services from both tier 2 and tier 3 cities of Pakistan.

“Though it is a fairly new trend in business for Pakistan, the online shopping trend is spreading quickly,” said Jawad.

ExD is currently managing the e-Commerce and digital presence of several major brands and online e-Commerce platforms. Their client’s e-Stores have a variety of regular customers from smaller cities, army cantonments and even rural areas of the country.

Jawad explained the mechanics behind e-commerce, outlining that the primary payment method currently being used is Cash on Demand (COD) where over 90% of online purchases are paid for by COD at the time the customers receive the package.

Taking in account that around 35% of the country’s monthly 70,000 COD shipments are delivered outside of  Karachi, Lahore and Islamabad, this trend is interesting to note. 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. And this shows a section of the market that is very likely to begin showing an increase in online shopping in the near future.

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 the alternate e-Commerce methodologies. With ExD, brands like Rungrez and Qalamkar have taken this gamble where 3 times more inventory was stocked on their e-Store than any previous campaign. About 90% of the stock sold out in less than a day, even before the official launch successfully.

Originally Published on ProPakistani.com

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