Pakistani Ecommerce Industry has One Key Flaw That we Must Fix Right Away!

Pakistan’s ecommerce industry — that has been on the rise especially in the past one year or so — is on the brink of a make or break situation. Our actions during the next few months (at the most) will determine the future of Pakistani e-commerce industry for years to come.

Pakistan constitutes of around 200 million individuals, 9 percent of whom went online during the last year while another 30 percent are likely to get connected to the internet in the next three to five years (or earlier). With such stats, Pakistan is bound to become the next major internet market — in terms of number of connected people — within next few years and this is a potential that should be kept in mind while dealing with all things online.

Best thing about internet — as compared to any offline business — is that you get practically unlimited number of potential customers. Unlike a physical store, your online store is potentially available to the whole of Pakistan, if not whole of the world. So if you are shoe maker for example, and you do this well and people have started liking you, then expect thousands of orders if not hundreds of thousands of orders per day.

Online stores and businesses have potential of growing larger than airline companies, both in terms of size and revenues

This is exactly how online store and businesses in West have grown larger than their airline companies (both in terms of revenues and valuations); which shows the magnitude and amount of stakes that we are dealing with here.

Despite such huge potentials, our ecommerce industry — like any other thing in Pakistan — is operating with near to ZERO regulations and with Allah’s grace only.

Currently, the whole Pakistani ecommerce industry is operating on:

  • Trust

Which is just the wrong way of doing ecommerce. Trust is an important factor in doing business but in absence of any laws or rules, just the trust element poses huge threat for the industry in the long run.

Considering the track record of Pakistanis, how long will it take for a fraudulent individuals to grab tons of orders and run away with several million in cash? and diminish the trust that industry has developed in years?

Pakistan’s ecommerce industry is operating with near to ZERO regulations and with Allah’s grace only

Such fraudulent activities are in fact already happening around us, for example Tanzeel Khan (from Peshawar) lost his Rs. 126,000 that he paid to for some computer items. His order was never delivered neither he has received any refund even after three months of initial transaction.

Tanzeel — after website owner stopped taking his calls for over two weeks — approached Police and FIA, but we know how they treat internet cases. He has lost all the hope and is waiting for a miracle to get his hard-earned money back.

Naeem from Rawalpindi, a friend of mine, ordered something from Kaymu few months back, but the products that were delivered were different from what he had originally paid for. Kaymu denied him any refund for more than two months until he decided to go legal against them. Matter was later resolved through negotiation.

Abdul Sattar Ansari from Karachi ordered an AC from Daraz.PK and paid the bill through credit card in advance. After two weeks, instead of delivering the order, Daraz notified him that ACs were out of stock and that his payment will be refunded after 45 days because that’s how banking system works.

When Mr. Ansari took the issue to social media (ProPakistani had covered this too), CEO of Daraz.PK had to intervene himself to get Mr. Ansari his refund.

There are countless other cases — that never made onto the radar — where people were either defrauded by getting wrong products or by no deliveries at all.

Time has come for us to regulate our ecommerce industry

If we want our online stores to not to destroy such a huge potential or if we want to get AliBaba and Amazon replicas in Pakistan, then we must regulate the industry at earliest in order to make sure that everyone has a set of defined protocol for carrying out ecommerce business processes.

Best way of going about regulating ecommerce industry is to have a separate government body — like we have SECP for companies, or PEMRA for electronic media — that should regularize ecommerce businesses. It should be mandated with implementation of ecommerce policies.

We don’t mean to say that the only way we can solve this issue is through a separate body. We already have PTA that could regulate the industry. FIA (NR3x) could be given power over dealing with customer complaints likes these under the cybercrimes initiative and so on. The bottom line is to have regulation – whether it’s through a new body or expansion of powers to an already existing one.

In addition to that, there should be a reasonable barrier to entry in ecommerce business, for example, there could be a limitation on who can start such ventures which should be high enough to discourage fraudsters but low enough not to discourage potential business owners. Furthermore, there should be a way of resolving disputes so that people who don’t have a way of registering a complaint against these ecommerce companies can find an easy way out.

With having a body for ecommerce, we will have related issued to get resolved. For instance, payment gateway is currently under no one’s head. PTA, MoIT, Finance Ministry, Commerce Ministry or SBP? Who will get the payment gateway in Pakistan, we don’t know as of yet. But with a body that will regulate ecommerce industry will also be mandated to facilitate the industry through all means available and possible.

Concerned government authorities — with Ms. Anusha Rehman, State Minister, MoIT being at the core — should understand the importance of the matter that ecommerce businesses have potential of growing beyond billion-dollar industry with-in next couple of years, and a mishap or a scandal can altogether vaporize this whole thing.

So instead of waiting for the (Axact like) bad day to happen, let’s regularize ecommerce industry and help it grow beyond the imaginable boundaries.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK