The ecommerce industry has been flourishing in Pakistan for the last many years as number of companies have registered a record growth in the sales of their products ahead of shopping season for Eid and post-Eid wedding season but unfortunately the sector growth is not supported by banking system despite the availability of various options to customers for online money transactions.
Leading E-commerce web-portals said that their businesses have been growing in Pakistan with every passing years, however, the use of online banking by the customers is very limited to stand at 2 percent of overall transactions.
These companies offer various options to customers for depositing their money against the order and goods supplied to them but the majority of customers give priority to cash on delivery which constitutes 98 percent of overall income.
There are many options given to customers for transfer of money to suppliers including credit card, online banking, IBFT, E-payment gateway like Easypay.
Sales through online shopping increased manifold this year but not through banking channel said, Kamran Shamim, founder of Buyon.pk. He said, "I think there is a reliability issue at the end of customers to transfer money online to supplier in advance, Kamran Shamim, founder of Buyon.pk. However banking channel will be utilized in the coming years once the trust is built between buyer and seller". The number of visitors and orders has increased by three times compared to the normal trading on renowned online shopping portals in the country showing the rising trend of technology in the lives of people, they said. It is because of arrival of 3G/4G technology coupled with rising awareness among customers but use of banking channel is pathetic.
There was a massive hike in visits on Daraz.pk during Ramadan because of Eid shopping as we see an average of 250,000 visitors on our shopping website on a regular day, during Ramadan, the figure shot up to 300,000 visitors, said Faress Shah, co-founder Daraz.pk.
New discount orders and availability of new designs also attracted scores of customers to use our online shopping website, he added. Interestingly, orders from women are definitely higher than men but the difference is less in clothes than it is in footwear. He also mentioned that customers prefer doing payment as the mode of cash on delivery compared with online banking options which are equipped by online shopping portals. However, the use of banking channel will improve in coming years, he added. According to industry players, the trend of online shopping improved this year significantly in the peak season of sales because of facilitation of services for the customers and increasing credibility of the hassle free shopping model.
There are two categories customers use various shopping portals; one from elite class living from posh localities but they are reluctant to visit shopping centers or having no time to visit bazaars, the other class is of those customers living in the sub-urban cities of the metropolis with no access of shopping centers or branded products. Some of the portals are busy in meeting the orders of sub-urban cities whereas some online shopping portals lay their focus on the markets of big cities. The business models also vary as some of them allow shopkeepers to set up their virtual stores on the websites and connect their customers through bridging them. On the other hand, some of the shopping web-portals maintain big inventories of the branded products to meet the customers' orders.
Moreover, the logistics network is the most important for all web portals to make the demand of the customer well on time within the period of three days. One of the factors is increasing awareness among the public and use of the internet on mobile phone which has given impetus to online shopping sales from 80 percent in the last couple of years mainly after arrival of 3G/4G technologies. Usually, people do shopping from this websites including clothing, footwear, cosmetic and fashion accessories in the month of Ramadan. Customers include both males and female who usually make payment on delivery of their orders at their places but few of the customers also use online mode of payments such as internet banking.
Experts said there is a need to incorporate technological and financial tools for providing greater easiness to the lives of people along with security of their money. In this regard, banks should create awareness of online banking in collaboration with online web portals, giving incentives like reward point system to give impetus to use of banking channels, which will bode well for financial inclusion in the emerging sector.