Trends in e-commerce in Pakistan – DAWN.com
Summary
One of the major winners from Covid-19 globally has been e-commerce companies. Based on data published by InsiderIntelligence, global online sales in 2021 are expected to be 19.5 per cent, compared to 13.9pc in 2019, a 45pc increase in 2 years. Pakistan has not been excluded from this trend; based on data published by the State Bank, the number of registered e-commerce merchants in Pakistan increased from 1,707 in 2019-20, to 3,003 in 2020-21, a 76pc increase.
In Pakistan, e-commerce…….
More On RSS Feeds
- Behind the Terrorist Attack on Brazil’s Government
- Why Brazil’s Coup Was Doomed To Fail
- Minnesota Republican votes against free school meals bill because 'I have yet to meet a person in Minnesota that is hungry'
- El Salvador: 2,000 more to prison, vows will 'never return'
- Travis Kelce's Dating History: Here's a Rundown - Distractify
One of the major winners from Covid-19 globally has been e-commerce companies. Based on data published by InsiderIntelligence, global online sales in 2021 are expected to be 19.5 per cent, compared to 13.9pc in 2019, a 45pc increase in 2 years. Pakistan has not been excluded from this trend; based on data published by the State Bank, the number of registered e-commerce merchants in Pakistan increased from 1,707 in 2019-20, to 3,003 in 2020-21, a 76pc increase.
In Pakistan, e-commerce tends to be dominated by business to consumer (B2C) companies. There are three main sectors, general e-commerce, groceries/quick(q)-commerce and fashion.
The most fiercely contested current sector in Pakistan is quick commerce/groceries, where Foodpanda and Airlift are the two big companies battling it out for market supremacy. Both have adopted the dark store model which requires a limited number of stock keeping units (SKUs) being stocked in different strategic locations spread across different neighbourhoods, allowing both companies to promise a sub-30-minute delivery in major cities. Another start-up, Munchies has raised $2.5 million to follow the dark store model and have launched operations in Karachi recently.
The reason for such big raises is that the dark store model requires heavy capital investment upfront to get operations up and running. Further, other big brand retailers (Carrefour, Al-Fatah, Metro etc) and start-ups (Grocer app, Hum mart, Cheetah, Bykea amongst others) are trying to compete in this space using different models.
Most people do not trust e-commerce in Pakistan which is why cash on delivery is still the preferred method for payment for the majority of online orders
Despite all the funding being raised by q-commerce companies, a fundamental question remains. Is q-commerce a model that will work in Pakistan? Pakistan has a lifestyle where the pace of life is slower compared to the US/Europe. The affluent have employed paid help and people tend to use shopping as an excuse to get out of the house as there are fewer leisure activities available. Right now, customers are using the services since there are multiple discounts doing the rounds as start-ups are fully funded and focused on obtaining customers. The question this raises is, how sticky and loyal will such customers be?
Fashion is an interesting sub-market as all the major retail brands have a significant presence online, and a few of them do limited stock drops online, which get sold in a matter of hours. Further, there is a variety of direct-to-consumer brands which exist based on social media targeting, particular categories (eg Fitted for men’s polos, Genie for Jeans), companies that buy stock from local factories and sell online (ExportLeftovers as a prime example). There is room for a bigger multibrand store/aggregator and clicky.pk and Buraqstore are vying for that space.
Global trends in fashion that have started in Pakistan but haven’t picked up are re-commerce (selling/renting of used clothes) and personal styling. Secret Stash is one …….