Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.
Pakistan is still largely a cash-based, informal economy. The majority of transactions are conducted in cash, except for those that are very large and require a bank draft or pay order. Several studies suggest that up to 60 percent of the economy is informal, with the majority of local companies, particularly SMEs, undocumented and outside the tax net.
A number of government departments have started to offer services via the Internet. In the private sector, four Pakistani airlines now offer e-ticketing and almost all local banks offer online banking services. This segment of the economy is expected to grow steadily as there are approximately 44.6 million Internet subscribers in Pakistan and this figure is expected double during the next five years.
There are also more than 32 million Facebook users in Pakistan and several local companies now use social media to promote their products and services. Pakistan has one of the highest rates of smartphone penetration in South Asia at nearly 34 percent, and mobile banking is an area with some promise.
Current Market Trends
The e-commerce sector has focused mainly on consumer products. Online customers in Pakistan search for and purchase consumer electronics and mobile phones, employment queries, online education and counseling, sale/purchase and information gathering about vehicles, computers and accessories, financial services, laptops and notebooks, motor vehicles by brand, test preparation and tutoring, and apparel and accessories. Consumer choices and the records they generate also produce a trove of data.
There are no banned browsers in Pakistan. Google Chrome is the most popular browser with 56 percent of total visitors, followed by Microsoft Internet Explorer with 21 percent. The remaining 23 percent of searches are through Android, Safari, Opera, Opera Mini, UC Browser, Safariand Maxthon respectively. Google Chrome, Internet Explorer, and Android account for the longest session durations.
Popular eCommerce Sites
Some leading eCommerce sites in Pakistan are;
According to reports, 95 percent of e-companies get payments for their online orders by cash-on-delivery. This increases the liquidity requirements for e-commerce companies and also forces them to have dedicated teams that manage cash receipts for the company, thereby raising operational costs. The larger players in the e-commerce space have started to utilize digital payments, and are optimistic that the industry will come together to coax consumers into moving away from cash-on-delivery to online payments. Digital payments also represent a hurdle for Pakistan’s e-commerce sector. While a number of products like EasyPaisa, JazzCash, and uPaisa – which are mobile banks - are available today, none of them has high market penetration. This, coupled with the fact that only 24 percent of the country’s population has a bank account, vastly raises the cost of doing business for e-commerce companies.
With the introduction of 3G/4G services, internet penetration has risen rapidly. Internet subscriber growth in Pakistan is averaging over 22 percent per year and total subscribers crossed the 44.6 million mark in 2018. Cheap smartphones, low cost of 3G/4G services and a consumer-goods obsessed middle class has meant that Pakistan’s e-commerce sector is “mobile first”: some e-commerce start-ups claim that over 75 percent of their total business is online.
Major Buying Holidays
E-commerce entrepreneurs enjoy heavy traffic on Pakistani holidays and event season such as Eid-ul-Fitr (June), Eid-ul-Adha (September), Black Friday, New Year and Wedding Season (October through April). Major sporting events can also drive purchases of related equipment and apparel.
The introduction of mobile broadband coupled with affordable smartphones has driven the social media use and the popularity of Facebook, Twitter, Skype and Instagram. Facebook leads social media with more than three billion connections per day and more than 17.2 million user accounts. Twitter is also fast becoming the preferred social media portal with more than 280 million connections per day. Google, You Tube and Instagram are also popular.