E-Commerce Transactions Drop by 22% in Q1 2023

E-commerce transactions have decreased by 22 percent from January to March 2023 depicting the high inflationary trends eroding purchasing power of users.

According to the statistics published by the State Bank of Pakistan (SBP), the overall transactions carried out online and apps using payment cards have decreased to 6.4 million in the third quarter of the financial year 2022-23 (FY23) as compared to 8.2 million and 9 million reported in the second and the first quarter of the same financial year, respectively.

On the other hand, the e-commerce merchants registered with banks increased to 6,562 in the third quarter of FY23 as compared to 5,954 and 5,429, respectively.

Customers in Pakistan use e-commerce platforms for shopping for groceries online, through various Apps for ordering foods, medicines, rides, garments, and cosmetics. The inflation rate also grew harshly from 27.5 percent to 35.4 percent during the period.

Also, the e-commerce transactions for international payments decreased to 0.9 million as compared to 1.2 million and 1.4 million in the second and first quarters of FY23. Local payments also decreased to 5.5 million in the third quarter of FY23.

The consistent decline showed that a section of consumers has reduced its use for purchasing goods and services. The values of the quarter showed the stark contrast of 7 percent growth in values processed under e-commerce, which surged to Rs. 36.2 million during the said period. The increase in values also reflected the purchasing of high-end customers and their spending patterns.

  • Banks charging open market rate for international transactions but giving interbank rate on remittances. Govt should take notice on it and reverse the additional amount charged by the consumers. It is also a reality that e-commerce sites increased prices more than market as well which restrained the returning users.

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