E commerce Industry in Pakistan
Internet Shopping is largely carried out throughout the globe. E-commerce has become well over 100 billion dollars market with a growth rate of almost seventy percent per year. However, and sadly, this segment is still struggling to kick a start in Pakistan due to various social problems and technical complexities
Online Shopping is very advantageous and easy to do practice that not only saves your money but time too. Organizations around the world keep looking for evolving ways and tricks to enhance users’ online shopping experience. For example, Electronics giant, LG developed a refrigerator which has its own built in computer assistant to help buying grocery from online stores.
Estimates predict that more than 75 percent of American internet users carry online transactions for either buying or selling online products/services. Your online presence equips your business with reach that extends beyond the regional boundaries. Hence, allowing more target audience and resultantly the sales.
There is no doubt in the potential that the e-commerce has got in it. Few voices also opine the saturation of online businesses, however, many of analysts don’t agree with this. They envision the expanding possibilities due to a remaining huge amount of world population that is yet to be linked with World Wide Web. Areas that are largely expected to grow include financial services, travel, entertainment, retailing and groceries.
As far as E-commerce in Pakistan is concerned, a research was carried out solely that found some hard realities. According to the result of research given in table below, it is obvious that considerable amount of Pakistani population do not have internet which is a basic ingredient of e-commerce. It was found that people don’t feel secure doing online transactions, they are mainly afraid of the fact that their credit card can be misused. Despite of all this, the research findings suggests that online stores are the best options for your shopping.
1) Do you use internet: 65 % people use internet, at least once a week
2) Are you satisfied with downloading speed of internet: 98% were not satisfied
3) Have you bought Online (if yes then what is frequency): 2% people have bought online out of which 99% people bought only once
4) Do you feel Secure Doing Online Transaction: 99% people feel insecure doing Transaction online
5) Are You satisfied with shipment: 100% were satisfied with shipment
6) Is it convenient to buy Online: 100 % were saying that purchasing online buying is convenient
There are very few Pakistani businesses that maintain or run their online stores. TCS, a Pakistani based courier and Carriage Company pioneered ecommerce business in Pakistan by offering gifts and other gadgets to be purchased from their online store and then shipped to destined address of purchaser. However, the idea could not get popular due to lack of awareness regarding the facility and discomfort, which Pakistani customers feel while giving away their credit card numbers to websites. This level of security concern is due to the overall corruption scenario in Pakistan, which make the website visitors not to easily trust agreement licenses provided by webmasters. Other reasons of low online purchasers include credit card culture, e-commerce awareness, illiteracy, limited access to internet, etc.
As seen, customer base is very narrow, due to which online stores tend to increase the delivery cost or even the actual product pricings for those who want to avail it or for those who are currently using it.
The culture comes with awareness, which can be developed by internet companies themselves through advertising their products and websites. On the other hands, literacy plays key role in this regard, along with access to internet, which is a basic element to use this facility. Above all, quality costumers’ service is what that reshapes the horizons of any domain.
Furthermore, a big hurdle in getting an online store is the inaccessibility of e-commerce support from Pakistani banks for merchants. None of Pakistani bank, except Citi Bank Pakistan, offers merchant accounts for e-commerce. Even setting up a merchant account for e-commerce with Citi Bank is virtually impossible for mid-sized and at times large sized companied due to their demanding pre-requisites including account size and security deposits. This situation leaves no option for Pakistani merchants to offer their products online through credit card.
Few alternate procedures are available through variety of options including Standard Chartered Bank, UBL and others. These banks offer transactions from and into their inbound debit accounts’ visa cards. That means you can only buy if you have a debit account with online stores’ supported banks. Obviously a very limited and odd solution!
Another alternate is to setup an account in some foreign bank that supports e-commerce. This way merchant will get the revenues/sales into a foreign account and then shifted to a local (Pakistani Bank)