Pakistan Witnesses Unprecedented Growth in Online Shopping

Zahoor Ahmed

Islamabad: Increased internet penetration, smartphone usage, and changing consumer preferences have all contributed to the rapid rise of online businesses in Pakistan.

Several prominent e-commerce platforms have emerged in Pakistan in recent years, including Daraz, Pakistan’s largest online marketplace, and various niche-focused platforms such as Foodpanda (a food delivery outlet) and Zameen (real estate). International giants such as Amazon and Alibaba are also interested in the Pakistani market.

The online business landscape in Pakistan is continuously expanding, providing opportunities for both businesses and consumers. Pakistan’s e-commerce sector is poised to play an increasingly significant role in the country’s economy as the digital ecosystem matures and consumer trust deepens.

Salma Babi, a busy working professional, has found solace in the world of online shopping, where a single click saves her valuable time and effort.

She reveals her preferences for a wide range of products, including bed sheets, children’s attire, and her own dresses, citing the convenience factor as her primary motivation.

However, her experience also reveals a dilemma that many online shoppers face: the variance in product quality and exchange policies among brands.

Bibi emphasises that brands adhering to the promised product quality mentioned on their websites earn her trust, while others who fall short in this regard disappoint her.

Furthermore, she highlights a critical issue plaguing the e-commerce landscape in Pakistan: the absence of a consistent exchange policy across all brands, which she finds “pathetic.”

Dr Muhammad Iqbal, an Islamabad-based e-commerce analyst, stressed that to ensure the sustainable growth of e-commerce, challenges like digital literacy and the development of robust logistics infrastructure must be addressed. These efforts are necessary to create an equitable and inclusive online shopping environment for all Pakistanis.

State of B2C E-commerce in Pakistan

A recent report, State of B2C E-commerce in Pakistan, revealed that Pakistan is the 47th largest market for e-commerce, with forecasted revenue of $6.4 billion for 2023, led by electronics and media (34%), furniture and appliances (29%), and fashion (20%). However, its 5-year CAGR is expected to be around 6 percent, which is relatively weaker than the growth incurred over the last five years due to currency slippages and a weak GDP growth forecast.

Efficient logistics and reliable delivery services are essential for the success of online businesses. Many e-commerce platforms have partnered with logistics companies to ensure timely deliveries, even in remote areas.

From Fashion to Electronics

E-commerce platforms in Pakistan offer a wide range of products, including electronics, fashion, cosmetics, groceries, and more. This diversity appeals to a broad spectrum of consumers.

Payment gateways and digital wallets have become more prevalent, making online transactions easier and more secure. Cash on delivery remains a popular payment option, but digital payment methods are gaining ground.

Financial institutions are also strengthening their e-banking infrastructure by expanding point-of-sale (POS) terminals, automated teller machines (ATMs), cash and check deposit machines (CDMs), e-commerce merchants, and agents’ networks to meet customers’ needs.

The Roadblocks Ahead

Despite its growth, the online business sector in Pakistan faces challenges. These included issues related to infrastructure, cybersecurity, and trust. Building trust with online shoppers and ensuring the security of their personal and financial information is a top priority.

The government has taken steps to promote e-commerce, including initiatives to simplify taxation for online businesses and encourage digital payments. These measures aim to create a favourable environment for e-commerce growth.

The rise of online businesses has also led to a surge in local entrepreneurship. Small and medium-sized businesses (SMEs) are increasingly leveraging e-commerce platforms to reach a broader audience, both domestically and internationally.

The COVID-19 pandemic accelerated the adoption of online shopping in Pakistan as lockdowns and safety concerns limited traditional shopping. This shift in consumer behaviour further boosted the e-commerce sector.

The future of online business in Pakistan appears promising. As more businesses go digital, and with ongoing improvements in infrastructure and technology, the sector is expected to continue growing. Additionally, increased investment from both local and international players is likely to fuel further expansion.

E-commerce Sales Surge Across the Globe

The internet has become the most effective catalyst for change in the ever-evolving landscape of commerce. Online business, or e-commerce, is growing at an unprecedented rate, transforming the way we shop, work, and interact with the world.

E-commerce sales worldwide exceeded $4 trillion in 2020, and this number is expected to surpass $6 trillion by 2023. This astonishing growth can be attributed to several key factors.

The primary driver behind the surge of online business is convenience.

The ability to shop from the comfort of one’s home or on the go has transformed the way consumers make purchasing decisions. No longer bound by physical store hours or location constraints, shoppers can access a global marketplace at their fingertips.

E-commerce platforms offer a seemingly endless array of products and services. From everyday necessities to unique and niche items, consumers can find exactly what they are looking for. This diversity of offerings appeals to a wide range of tastes and preferences.

Zahoor Ahmed is an Islamabad-based APP correspondent, and the feature is released by APP.

Edited by Shazia Mehboob