Online Shopping Trends Higher in Smaller Cities

By Saman Javed

E-commerce in Pakistan has reached a turning point where e-tailers and industry experts are betting on the tech-savvy audience and the 3/4G technologies as game changers.

The recent e-commerce revolution in Pakistan is being fuelled by the tier two and tier three cities other than major cities like Karachi, Lahore and Islamabad. This is the case despite a series of challenges ranging from low broadband penetration to a lack of logistical facilities to ensure that goods can be delivered to the distant areas of the country.

Why so? Industry experts suggest that while people in these far-flung cities have the means to purchase these goods, what lacks is the access to contemporary offerings by high-end brands, therefore, ecommerce becomes an attractive option for them. As far as low broadband penetration is concerned, nationwide popularity of easy-on-the-pocket smartphones and affordable mobile internet packages seems to be bridging the gap considerably.

For instance, Daraz.pk, an online store, is witnessing more than 50% of its sales coming from tier two and tier three cities. What’s interesting is that a very similar trend has been seen across the border. According to the Financial Express, the main reason why India has the fifth largest retail destination in the world is the growth in the consumption of goods and services exhibited by a large portion of its 1.25 billion people living in small cities and villages.

Such is the case because e-tailers on both sides of the border may cater to local brands available to customers in smaller cities through physical stores, but it is the introduction of international fashion brands that tend to attract customers in those regions of the countries that don’t have access to such high street fashion.

The accessibility of mobile phones and 3/4G services will further help boost sales in these smaller towns and cities. The buyer is aware of the fashion trends – access to Facebook and cable had been keeping them up-to-date with what’s new and now. The same shows and films that are used to advertise products reach the inhabitants of the small and large cities. It’s just that earlier, people in the smaller cities didn’t have access to these products and that gap is being filled by ecommerce.

Speaking of the growth in ecommerce, according to a survey, the Indian ecommerce industry has grown to $16 billion in 2013, showing an incredible growth rate of 88% from the $8.5 billion in 2012, reported the Business Insider. Similarly, in Pakistan the ecommerce industry stands at about $30 million – 35 million, a significant hike from last year.

As far as Bangladesh is concerned, there has been extensive debate surrounding the scope of the ecommerce industry. There have been differing opinions on whether the proliferation of ecommerce companies and the assessment that they have generated is merely an optimistic bubble or the tip of an iceberg. With the launch of Daraz in October, the scope of ecommerce in Bangladesh will be much clearer than it currently is.