eCommerce has finally found a stable footing in Pakistan. Like in the case of most new developments, eCommerce also caught up late compared to other countries.
While Europe and the US are light years ahead, with eCommerce behemoths like Amazon and eBay. Even regional countries have made a major mark in eCommerce, with China’s AliBaba breaking a record on the New York Stock Exchange with its Initial Public Offering that raised a mind-numbing $25 billion. AliBaba’s market capitalization currently stands at $250 billion, eclipsing that of Walmart, the American traditional retail giants.
Even in India, eCommerce has made major headway, with websites like Flipkart and SnapDeal spending millions on electronic and print ads, to show their growing power and strength. According to a Goldman Sachs report, investors have poured in $6.2 billion in Indian startups already this year.
Compared to that, Pakistan’s eCommerce industry is still in the incubation stage. With a paucity of data and information, the size of the industry is estimated on conjecture. One renowned entrepreneur puts the Pakistani eCommerce industry to be worth $600 million by 2017, adding that around $30 million is spent by online shoppers, although there is no data to back these figures.
Nonetheless, the signs are good for eCommerce with a sudden upsurge in the number of websites selling wares online. From online shopping sites like Jambo.pk, Daraz, HomeShopping, ShopHive, TCS Connect, etc., to online groceries like Tazamart.pk, RashanLelo, AraamShop, and many more, each industry has seen a sudden growth.
Even Groupon like websites such as Grabit, DealToday, DealOn, etc. are catering to a niche, just like video websites, tech sites, online marketplaces, and logistics and delivery providers.
While there is a dearth of investment, the rise of Arpatech Technology Ventures, a homegrown angel investor organization, is fast acquiring and investing in startups. Only recently, they made a solid profit on EatOye, which was sold off to FoodPanda, the global food delivery and reservation giants. Similarly, their recent acquisition of SheOps, an exclusively women online marketplace, and Investor Lounge, a financial technology startup, show that eCommerce websites are getting the support they need.
Similarly, P@SHA, or Pakistan Software Houses Association, has setup ‘The Nest i/O’, which claims to be Pakistan’s largest tech incubator. It has also seen a growth in its startups, with more tech savvy youth pitching their ideas as they try to make their name in Pakistan’s relatively nascent eCommerce industry.
Other reasons for eCommerce bright future include:
- Development of better online payment methods to change the industry’s current reliance on Cash on Delivery (CoD). Banks and Telcos are launching services to facilitate this, with MCBLite, UBL’s NetBanking as well as its Go Green Internet Merchant Account, Zong and Askari Bank’s TimePay, Telenor’s Easy Paisa, to name a few
- Increased penetration of Internet & Smartphone has brought internet connectivity to a much greater number of people. Currently, Pakistan has approximately 30 million internet users. The recent launch of 3G technology is expected to result in a spike, with the number of users expected to be double in the next 5 years. The 10 million smartphone users are also expected to increase at a similarly exponential rate.
- Trust of Online Websites is on the increase with more and more people doing their shopping online. Secure payment methods, quality products, timely delivery and refund were some of the concerns that kept shoppers away from online stores. But with the industry’s maturity, and people sharing their good experiences of online shopping, the number of online buyers is on the increase.