The Pakistani government has recently published an e-commerce policy framework; which brought new hope to the online shopping sector in Pakistan. The challenges will now be addressed at last. If we look into the draft, it clearly identifies key challenges and recommended concrete measures that must be taken in order to provide the base for the e-commerce sector to take off. Unlike in the past, this policy seems to inputs from a range of stakeholders and important players in Pakistan’s digital economy. In the past, lack of trust in online shopping has hindered the potential growth of this sector; however few tech companies, particularly ride-hailing companies have managed to change the behavior of the masses. Despite the absence of global e-commerce players like Amazon and eBay; very few web shopping websites are able to gain the attention of people.
Pakistan’s Ecommerce Sector in Comparison.
Facts and figures regarding Pakistan’s 93% growth in online shopping last year is often quoted as impressive. But a simple cross-sectional comparisons with other countries reveals that the real potential of the e-commerce sector in Pakistan is still untapped. For example, Total online shopping sales in Pakistan was around Rs. 40 billion (250$ million) in 2018 as compared to Egypt with the same socio-economic conditions that were $5. Even Iran despite crippling economy under sanctions posted revenues of $5 billion during 2018. This shows that despite so much growth we are far behind from other countries with almost the same economic conditions.
Even if you look into leading online shopping sites, Daraz.pk from Pakistan has around 8 million monthly visitors while Egypt`s Souq as 13 million and Iran`s Digiska 44 million. There also seems to be a large gap between leading websites and their competitors.
What`s are the major factors that are hindering the growth in the e-commerce sector in Pakistan. One major difference between the internet shopping websites that in Egypt, Iran or any other country; the websites are also available in local languages but in Pakistan; you will only find it in English making population who can speak English as a major beneficiary of these websites. That means the majority of the population is left behind.
Why there is a Lack of Trust by Online Shopping Customers?
A survey conducted by a price comparison website priceoye.pk revealed that the biggest problem faced by online shopping customers in Pakistan is product quality that was attributed by 32% of customers followed by delivery time by 23%. To many people`s surprise price was the main concern for only 7% online shopping customers, followed return policy by 16% and customer service by 15%.
To many people`s surprise around 27% of Daraz.pk customers expressed their dissatisfaction with the quality of products. That was above then all of the online shopping websites. While goto.com.pk had 33% dissatisfied customers followed by Hummart 16% and Shophive 20%.
Only a relatively new online shopping site wbminternational.pk has almost all of its customers satisfied with product quality.
What are the recent developments in the e-commerce sector in Pakistan?
Other than the announcement of the e-commerce policy framework in Pakistan, the Digital Pakistan initiative will also bring major changes to the eCommerce sector. While State Bank is working on digital payments infrastructure we may see unexpected growth trends in online shopping in Pakistan.
In one of the major developments last year AliBaba that is a major e-commerce player globally has taken over daraz.pk. With this acquisition, many other companies are looking to enter in Pakistan.
In addition to that during 2019, Another International player wbminternational.pk also launched their online shopping website in Pakistan. WBM (Pvt) Ltd owns several brands including WBM Home, Himalayan Glow, WBM Care, Natural Solution, WBM Baby Care, Himalayan Chef, W Shoe Care, W Beauty, and many others. With over 2 decades of experience in the eCommerce sector in the USA and other countries; it is a great addition among online business websites in Pakistan. The pledge to address the challenges faced by web shopping customers through offering 100% money-back guarantee, same and next day delivery and high quality imported products.
With new entrants like wbminternational.pk and many others who are going to enter the local market soon; the future of Pakistani e-commerce looks promising. However, there are many serious challenges ahead biggest among them is developing a viable business model that can minimize the perceived risk of online shopping customers.
Pakistan’s e-commerce sector only accounts for only 1% while globally its 10%. While Broadband users in Pakistan are expected to double in the next 5 years, we may expect that online shopping websites will be able to win the trust of online buying customers in Pakistan.