E-com­merce mar­ket in Pak­istan on the rise

The Pak Banker - - NATIONAL -

Pak­istan, al­though a late en­trant to world of e-com­merce, has emerged and recorded a rea­son­able rise in on­line shop­ping trends and other ecom­merce busi­nesses.

Such growth trends over past few years - with more than US$ 30 mil­lion be­ing spent on on­line pur­chases cur­rently - de­pict a highly pos­i­tive pic­ture for fu­ture and the size of Pak­istan's e-com­merce mar­ket is ex­pected to reach over US$ 600 mil­lion by 2017. No doubt e-com­merce in­dus­try is boom­ing through­out the re­gion in­clud­ing in China where Alibaba's e-com­merce mar­ket cap­i­tal­iza­tion es­ti­mated to be over US$ 250 bil­lion.

With many new on­line ven­tures spring­ing up rapidly and ex­ist­ing busi­nesses record­ing un­prece­dented growth rates, there is still a lot that needs to be done to reach the true e-com­merce po­ten­tial of the coun­try and com­pete with other big play­ers of the re­gion. Ex­perts on Wed­nes­day said one of the most im­por­tant fac­tors in equa­tion is rate of in­ter­net pen­e­tra­tion in Pak­istan. Pak­istan's in­ter­net en­abled pop­u­la­tion is lim­ited to around 30 mil­lion users to­day. This, how­ever, is ex­pected to rise up to 56 mil­lion users by 2019.

More­over, the ex­perts said Pak­istan's en­try into 3G and LTE ser­vices in 2014 has in­creased in­ter­net ac­ces­si­bil­ity and will also most likely pro­pel the growth of on­line pur­chases.

Sta­tis­tics from the Pak­istan Telecom­mu­ni­ca­tion Au­thor­ity (PTA) re­vealed that the to­tal num­ber of third-gen­er­a­tion (3G) and LTE mo­bile sub­scrip­tions have risen up to 24.8 mil­lion. Pak­istan has now moved in era of broad­band with 15 % tele-den­sity and it has great po­ten­tial for pro- lif­er­a­tion. Over the next 5 years, 28 per cent of the coun­try's pop­u­la­tion is es­ti­mated to have in­ter­net ac­cess. With in­creased ac­cess to the in­ter­net and so­cial me­dia sites such as Twit­ter and Face­book, mar­ket­ing trends are also rapidly chang­ing and trans­form­ing the way opin­ions are now be­ing shaped. This will not only trans­form shop­ping trends but also sig­nif­i­cantly im­pact sev­eral other e-com­merce are­nas, such as on­line job hunts, land, prop­erty and rental trans­ac­tions.

Sim­i­larly, along with in­creased in­ter­net pen­e­tra­tion, 67 per cent of the en­tire pop­u­la­tion also have ac­cess to mo­bile phones. There is also a re­cent surge in smart­phone us­age which is in­creas­ing day by day. In­ter­net-en­abled smart­phones have dra­mat­i­cally in­creased the ease of in­ter­net ac­cess and made on­line busi­nesses much more ac­ces­si­ble for all. Both the rise of in­ter­net pen­e­tra­tion and the de­clin­ing costs of smart­phones have ac­counted for this rapid rise in smart­phone us­age in Pak­istan. Many Chi­nese brands have launched so­phis­ti­cated devices at the frac­tion of the costs as­so­ci­ated with the world's lead­ing mo­bile phone brands, which has aug­mented mo­bile pen­e­tra­tion across the lower in­come strata of the coun­try.

With such easy ac­cess to the in­ter­net via af­ford­able smart­phones, e-com­merce trends in the coun­try are ex­pected to boom in the near fu­ture, the ex­perts main­tained. Even though Cash-on-De­liv­ery (COD) pay­ment meth­ods con­tinue to re­main widely pop­u­lar in Pak­istan and ac­count for more than 95 per cent of on­line pur­chases, other promis­ing ini­tia­tives such as branch­less bank­ing and In­ter Bank Fund Trans­fer (IBFT) are also un­der­way.

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