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Online Shopping in Pakistan: Trends , Factors & Prospects

Online Shopping in Pakistan

We are living in a technological world and internet is a present day marvel that has changed the way we view the world, literally it has revolutionized almost all the aspects of life including the way we shop. The trend of online shopping in Pakistan is ever increasing and it’s growing everyday like a wildfire.

The act of purchasing products or services over the internet is commonly known as Online Shopping, the vogue of Online Shopping in Pakistan is gaining popularity mainly because people find it convenient and easy, plus shop from the comfort of their home or office.

Global online retail sales are growing steeply and is estimated to reach a whopping 9% of the total retail spending, in some countries E-Commerce sales is nearly 16% of total retail sales.

One of most enticing factor of such increasing trend are sales promotions, religious events, seasonal offers etc. which affects the online shopping positively, and that alleviates the need to stroll in busy and rushy malls, or search from shop to shop for a particular item.

The trend of online shopping in Pakistan which was unheard in the country a few years back, has increased many folds quite rapidly and the country has witnessed a massive increase in e-commerce businesses and in just half a decade it has changed the way we go shopping, from being virtually non-existent to becoming a multi million rupees of revenue stream.

 

Factors Stimulating the Growth of Online Shopping in Pakistan – The Bar is Rising

Internet Penetration:

The key factor behind the growth of online shopping is the rate of internet penetration to the masses & declining cost of smart phones. Pakistan has approximately 30 million active internet users today, however it is expected to rise up to 55 million users by 2019.

Introduction of 3G/4G and LTE services by Telecom companies in Pakistan, gave internet access to almost every person who has a little knowledge about using internet enabled mobile devices, which became a catalyst for the growth of online shopping business in Pakistan. Various Statistics from Pakistan Telecommunication Authority (PTA) reveals that 3G, 4G and LTE mobile subscriptions are increasing exponentially signalling the positive prospects for  E-commerce industry.

Also read : Tips to remain safe while shopping online

Foreign Direct Investments

Foreign investors played an important role in sparking the e-commerce growth in the region, a country with more than 180 million people has enormous potential for the tremendous growth of online retail business, kaymu.pk which is one of most well known online platform is a venture of Rocket Internet which is funded by Germany and Qatar. Although Pakistan needs more such ventures but prospects of growth are there and it is expected to swell more in future.

Social Media:

Social media sites such as Twitter & Facebook are expeditiously changing and transforming the way opinions are being shaped, with improved access to the internet and social media the trend of online shopping in Pakistan is gaining momentum, and the pace is anticipated to rise over the next 5 years when nearly 28% of the country’s population will have access to internet.

Payment & Delivery

In Pakistan where people tend to avoid plastic money , Cash-On-Delivery remains the payment method of choice, and account for more than 95% of all online purchases, but other promising alternatives such as Easy Paisa, Timepey , branchless banking, MobiCash etc. are also supporting the surge of online shopping in Pakistan.

Payment and delivery go side by side, various delivery giants like courier companies offer door to door Cash-On Delivery services across all the major cities nationwide. These payment and delivery trends provide ample growth opportunities for the emerging online shopping trend.

Mobile Applications

Most of the online retailers in the market do realize the importance of having a mobile application, as without a mobile app the customer interaction is futile, on the contrary it is relatively straight forward and simple to shop using mobile apps.

The best part is that the majority of apps are free to use and masses can take great benefit from their use. Due to increased visual appeal and excellent user experience, more brands are realizing the dire need of having one.

Key Players in Market – Room for Growth.

Brands like OLX, Daraz & Kaymu have already established themselves as accomplished online marketplace, through a consumer-to-consumer (C2C) or business-to-consumer (B2C) model or both. But the future of online shopping in Pakistan lies in the ability of online businesses to gain their foothold and establish trust in online shopping and e-commerce initiatives.

There is still a long way to go, start is good but it’s not the best, there is much room for growth and a lot needs to be done, with just 3% of country’s population indulging in online shopping several initiatives has to be taken to target this potential market, businesses have to use this opportunity by building up credibility and garner consumer trust to draw those risk-averse shoppers to the world of online shopping.

Rising Stars – Making their marks

The signs are positive and potential is very high, many local and international visionaries are investing in online shopping , local players such as Rozee, Shophive, Pakwheels along with international players like Jovago, Tripda and Foodpanda are all plunging in to establish their market share in emerging E-commerce sector of Pakistan.Facebook pages are playing an important role for other local, small businesses, allowing them to keep the business rolling without having to invest in big infrastructure and physical setup.

Future – Where do we go from here ?

The burgeoning e-commerce industry throughout the region, with India’s leading e-commerce website, Flipkart, raising a record US$1 billion in investment and Alibaba China’s e-commerce giant with market capitalisation estimated to be over US$250 billion, these countries have already taken a huge lead in the industry, but Pakistan also recently recorded a massive rise in online shopping trends, despite being late entrant to the world of e-commerce and other e-commerce businesses.  Altogether, internet shopping industry in Pakistan is blooming briskly, breaking the barrier of people’s traditional shopping habits. Figures for online shopping trends in Pakistan as depicted by Google, are really encouraging, in the span of next five years, it is estimated that 25% of local businesses will adapt to internet business, forming a new abode in the internet marketplace for Pakistani trade and industry.
Despite of the fact that many new online ventures are springing up rapidly and those who are already there in the market for quite some time are experiencing unprecedented growth rates, there is still a lot needs to be done to fully exploit the true potential of e-commerce in the country and compete with the regional giants , then only we will be able to drastically change the shopping trends and drive the growth of E-commerce industry in Pakistan.