By Hassan Iftikhar
In the history of the e-commerce industry, there has been a quantum leap in the last decade. Not only was there an increase in the participation and interest of consumers – but the industry also witnessed massive sales figures. According to eMarketer, China earned around $900 billion from e-commerce in 2016 and the US earned around $423 billion in sales revenue. On the whole, the e-commerce industry received roughly $1.915 trillion in 2016. Pakistan is among the fastest budding e-commerce countries. One major factor reshaping this e-commerce scenario in Pakistan is due to the payment gateways and escalating coverage of 4G and 3G networks. According to statistics given in The News, Pakistan’s e-commerce sales in 2017 were $622 million, 0.34% of the retail market and it continues to increase each year. It is anticipated to reach around 1 billion US dollars by 2020.
One such company contributing to this e-commerce climb in Pakistan is cheetay.pk which is gaining prominence as a major player in the domain of last mile e-commerce companies. What makes Cheetay.pk different from the other companies is that it caters all the needs of the consumers delivering food, beauty products, books, and health care products. This prompt delivery service is starting operations soon in Islamabad as well. Together, Cheetay.pk and FoodPanda have real potential to move Pakistan to the list of leading e-commerce countries in the world.
This increase in the e-commerce industry is boosted by the use of technology as it is a major factor in re-shaping the e-commerce industry. Technology is promoting this huge wave of good fortune and is sprouting E-commerce into what may be the pinnacle of contemporary retailing. But the question is what role does technology play in reshaping e-commerce in Pakistan?
The current trends in the market are focused chiefly on consumer behavior. Customers prefer to search online and buy stuff for their daily use such as, mobile phones, electronics, food, notebooks, clothes etc. In addition to this, they also search for queries on employment, online education and counseling. In a nutshell, each and everything for which people had to leave their homes in the past is now available in the comfort of their home.
According to reports given by Export.gov, 95% of e-commerce companies receive payments by cash-on-delivery for their online orders. This enhances the liquidity needs for e-commerce companies and also pushes them to have specific teams that supervise cash receipts for the business, thus increasing operational costs. The big guns of the e-commerce industry have started using digital payment methods, and are sanguine that the businesses will come together to persuade consumers into drifting away from cash-on-delivery to online payments.
Although Digital payments prove to be a hurdle for the Pakistan e-commerce industry, there are now a slew of services like JazzCash, EasyPaisa, and uPaisa – basically called mobile banks – that are quite easy to operate today despite having low market penetration. This, along with the fact that only 16% of the population of Pakistan has a bank account, immensely raises the price of doing business in the e-commerce department.
With the 3G/4G services prevailing in the country, mobile e-commerce has a new horizon with regards to an untapped target audience. Internet subscriber growth in Pakistan is averaging over 22 percent per year and total subscribers crossed the 44.6 million mark in 2016. Low cost of 3G/4G, cheap mobile phones, and a consumer-goods centric middle class has shown that Pakistan`s e-commerce industry is “mobile first”. With the changing time, there are so many e-commerce start-up companies that claim their business to be 75 percent online. A heavy traffic is visible mostly on holidays and events such as Eid-ul-Adha, Eid-ul-Fitr, White & black Friday, Wedding Seasons, and New Year. Some important sports events like PSL can also increase buying potential related to relevant apparels and equipment.
Seeing the ever increasing use of technology and these prevailing digital trends, it is safe to say that the future of shopping is online. In today’s time, people who are deeply engrossed in their work routines prefer comfort and ease and are more amenable to opting for e-commerce.