ISLAMABAD: More than $30 million are being spent on online purchases currently in the country, which show that Pakistan’s e-commerce market would reach over $600 million by 2017.
No doubt e-commerce industry is booming throughout the region including in China where Alibaba’s e-commerce market capitalization estimated to be over $250 billion.
With many new online ventures springing up rapidly and existing businesses recording unprecedented growth rates, there is still a lot that needs to be done to reach the true e-commerce potential of the country and compete with other big players of the region.
Experts on Sunday said one of the most important factors in equation is rate of internet penetration in Pakistan. Pakistan’s internet enabled population is limited to around 30 million users today. This, however, is expected to rise up to 56 million users by 2019.
Moreover, the experts said Pakistan’s entry into 3G and LTE services in 2014 has increased internet accessibility and will also most likely propel the growth of online purchases.
Statistics from the Pakistan Telecommunication Authority (PTA) revealed that the total number of third-generation (3G) and LTE mobile subscriptions have risen up to 24.8 million. Pakistan has now moved in era of broadband with 15 % tele-density and it has great potential for proliferation.
Over the next 5 years, 28 per cent of the country’s population is estimated to have internet access. With increased access to the internet and social media sites such as Twitter and Facebook, marketing trends are also rapidly changing and transforming the way opinions are now being shaped.
This will not only transform shopping trends but also significantly impact several other e-commerce arenas, such as online job hunts, land, property and rental transactions. Similarly, along with increased internet penetration, 67 per cent of the entire population also have access to mobile phones. There is also a recent surge in smartphone usage which is increasing day by day.
Internet-enabled smartphones have dramatically increased the ease of internet access and made online businesses much more accessible for all.
Both the rise of internet penetration and the declining costs of smartphones have accounted for this rapid rise in smartphone usage in Pakistan. Many Chinese brands have launched sophisticated devices at the fraction of the costs associated with the world’s leading mobile phone brands, which has augmented mobile penetration across the lower income strata of the country.
With such easy access to the internet via affordable smartphones, e-commerce trends in the country are expected to boom in the near future, the experts maintained.
Even though Cash-on-Delivery (COD) payment methods continue to remain widely popular in Pakistan and account for more than 95 per cent of online purchases, other promising initiatives such as branchless banking and Inter Bank Fund Transfer (IBFT) are also underway.
Many banks and Telecom operators have already introduced the concept of branchless banking and the number of branchless banking agents facilitating offline payments for online purchases have recently tripled, making it much more convenient to transfer money in a secure environment.
In his comments on Branchless Banking, Chairman PTA has said, being a modern facility, it would have positive impact on Gross Domestic Product (GDP) growth and lives of people. He said the consumers would have the most attractive benefits of keeping bank account in their pocket with advantages like low cost and fast transfers.
PTA is also making efforts to promote this area through holding workshops and by bringing global and local insights from branchless banking industry. Online merchants now have much greater access to merchant accounts that enable them to collect payments electronically via the more than 12 million debit cards in circulation in Pakistan.
Moreover, with more and more banks now offering consumers internet banking payment facilities, a vast volume of payments are made through IBFT which enables consumers to electronically transfer funds directly from their online bank accounts to online stores.
Delivery giants and other couriers are providing COD delivery services across 150 cities nationwide. These trends provide ample growth opportunities for emerging online business, as well as potential exploration and growth avenues for courier services by association.
The future of e-commerce trends lay in the ability of online business to gain their foothold and establish trust in online shopping and e-commerce initiatives. There is a long way to go. With just 3 per cent of the Pakistani population indulging in online shopping, several initiatives are starting with online businesses in Pakistan to reach out to their potential market, build up their credibility, and garner consumer trust.
The timing is ripe for e-commerce in Pakistan and the industry is all geared up to create massive waves with colossal scope for innovation and improvement.