Here’s Why E-Commerce Has a Great Future in Pakistan

By Zeeshan Khalid

A country which is a melting pot of different cultures and rich traditions, Pakistan is also a thriving IT powerhouse, currently home to a heterogeneous E-Market that offers billions of opportunities to local as well as foreign investors.

While Pakistan may not stand parallel to the global players in e-commerce, it is not too far behind. With its rising entrepreneurial culture and stabilizing digital footprint, Pakistan’s future in e-commerce reflects promising prospects with exponential growth.

With recent leaps in internet technology and the growing cross-border influence of China, e-commerce has emerged as a catalyst to Pakistan’s socioeconomic outlook, rapidly mainstreaming into its diverse business sectors and amalgamating with its merchant-consumer landscape.

According to Industry experts, Pakistan’s e-commerce market could hit a major milestone, crossing the coveted $1 billion mark by the end of 2018.

In this blog, we will share 5 reasons why Pakistan could be in line to become the next e-commerce leader of the world.

  1. Empowering Youth with Entrepreneurial Culture

In the bid to empower the youth in creating more jobs than settling for one, Pakistan’s leading education institutes are fostering budding entrepreneurs to help them grow into successful future CEOs. Top IT universities in Pakistan such as FAST, COMSATS, NUST, LUMS, and GIKIST are nurturing grounds for IT-based start-ups. These Institutes have been on the frontlines in producing some of the finest alumni with entrepreneurial acumen, continuously facilitating them through seed accelerators and empowerment programs. Moreover, graduates are also offered grants, sponsorships and incubator infrastructure to hone their skills further and gain a firm foothold in the corporate industry.

Similarly, in its vision to promote Pakistan’s entrepreneurial drive, the Punjab Government has established the Plan9, a tech incubator by Punjab Information Technology Board to help striving entrepreneurs build, grow and expand their tech-product based startups in stimulating and sustainable environment.

  1. SMEs and Rising Middle Class

Workforce always serves as a distinguishing factor in the economic development of any country. With its 200 million people and a GDP of $1,641 per capita, Pakistan is expected to become the 5th largest population and the fourth fastest growing economy globally by 2030.

During the last decade, small and medium enterprises (SMEs) have been a prime mover in pushing Pakistan’s entrepreneurial drive to new heights. Currently, SMEs account for 90% of Pakistan’s businesses economy and 40% of the country’s $305 billion GDP. With more SMEs incorporated, millions of new jobs are generated which creates a high-engaging online user base. Online shoppers belonging to a lower to middle-income strata are more likely to engage with online shopping platforms and dispense their income on products and services.

The sheer size of Pakistan’s working class is a significant indicator to its e-commerce success as it paves its way in becoming a key market of the global e-commerce arena.

  1. Fast Internet Accessibility

With Pakistan’ internet users tipped to reach 60 million by the end of 2018, the country is currently on track to produce one of the largest digital audiences in the world. Its growing internet penetration rates, affordable smartphone devices, availability of online payment solutions and ripening e-consumer base has served as stepping stones towards its rising peerage in the e-commerce world. Currently, Pakistan has 59 million smartphone users with around 83% Android devices users. The number is likely to surge ahead with the recent drop in smartphone prices and availability of affordable mobile data packages to mobile internet users in Pakistan.

YouTube tops the list of most-used video streaming platform in Pakistan by millennials, registering an unprecedented digital consumption rate which grew by 60% in the last 3 years.

In layman terms, Pakistan’s status quo in e-commerce is a direct result of demand- and supply-led growth in internet technology. Although being a late entrant to the 4G technology, Pakistan’s Cabinet already approved the launch of 5G technology last year with the directive to the Pakistan Telecommunication Authority (PTA) to test the new technology before its commercial availability after 2020.

Moreover, one of the main projects in China’s benchmark economic corridor with Pakistan’s is to spread 820 kilometers of fiber-optic lines, supplying faster internet speeds to rural and far-flung areas of Gilgit-Baltistan, Khyber Pakhtunkhwa, and Baluchistan.

  1. Normalizing Micro-Financing Services

Despite 2015’s miscarried attempt to invite the Universal Payment giant Paypal, this time the new government is quite adamant in bringing the global transaction solution into Pakistan’s e-commerce landscape. Seeing this an opportunity, AliPay made a bold move by acquiring 45% shares of Telenor’s Easy Paisa in November 2018, a popular cashless payment method commonly used by local vendors and online shoppers.

With Paypal’s announcement, the government has also promised to introduce more welcoming rules to solicit with such electronic payment gateways such as PayPal and AliPay, further incentivizing their use in its e-commerce sectors. The initiative will allow e-commerce startups to maximize overseas product and services outreach and engage more prominent business avenues in the global market.

  1. Improved Online Shopping Experience

As the boundaries between e-commerce and physical commerce gradually close in, Pakistani shoppers have begun flocking to online shopping platforms that are offer versatile personalization features, rich in-store experience, and a streamlined checkout process.

According to report shared by State Bank of Pakistan (SBP), 2017’s e-commerce market witnessed phenomenal growth, registering a sound 260% increase in online merchants since 2016 while online payments increased by 230%.

In their transition to e-commerce, local brands in Pakistan are learning to leverage from specialized digital solutions by integrating attractive web design features, improving page loading speeds, introducing simpler navigation methods, developing minimalized content and using digital marketing practices to bring maximum exposure towards their online presence. With a better-looking website at its optimum functionality, e-commerce stores have significantly improved their traffic, online engagement and conversion rates in Pakistan.

At the same time, logistical infrastructure in Pakistan has immensely improved, eliminating traditional delays and tempered deliveries while providing item insurance, digitalized tracking and cash-on-delivery (COD) facility to online shoppers. According to one estimate, 85% of Pakistan’s online sales in 2017 occurred through COD.

About the Author

Zeeshan Khalid is the Founder & CEO of United Sol – A Leading IT Company in Pakistan. Under the umbrella of UnitedSol, he has established well known international brands like FMEExtensions, Extendons and FMEModules that serves over 30,000 customers with 250+ products and eCommerce solutions.

UnitedSol is also the only PrestaShop Partner in Pakistan and first in line to become a Premier Magento Extension Partner as well. The company is also credited with several digital marketing partnerships with renowned brands such as Shifa International Hospital, Tehzeeb Bakers, ICCI and more.

  • Ha ha ha…now how many profitable (or even revenue producing) ventures has Plan9 generated? How much public money was spent? How about those I/O and Planets N etc?

    Talk is cheap. While India has crossed the $60 billion mark in e-commerce we are struggling at the $600m+ stage …

    *” Rassi jal gai par bal nahi gaya !”*

    • Did you miss the “future” word in the title and in the article? We have a great E-commerce “Future” ahead of us, not “Present”.

      • Yeah right… everything is in the future *still* , why not?

        Btw, which top universities are you really proud of? What kind of peer research has actually come out of them? And I don’t mean copy-paste conference pubs or those funny media articles like yours.

        Please don’t cheaper yourselves by ignoring ground facts.

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