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Pakistan ecommerce growing up

News, 15 December 2015

KARACHI: E-commerce in Pakistan is growing fast, as the spread of 3G mobile technology has made it an attractive option for an increasing number of younger and rural consumers.

Following the recent Black Friday event, businesses have expressed confidence that the sector is no longer in its infancy and is entering a new era, as people were observed buying a wider range of goods, from more locations, than ever before.

Up until now, e-commerce in the country has tended to centre around a few categories – mobile phones, laptops, fashion – and to be focused on the major cities of Karachi, Lahore and Islamabad.

But the industry said that on Black Friday people were buying washing machines and televisions online. And one site reported a 50-fold increase in orders from one smaller rural town.

"Absolutely, Pakistan's ecommerce is entering the second phase," Saman Javed, Head of Communications and PR at online marketplace Daraz, told the Express Tribune.

Referring to Black Friday sales, she revealed that "One-third of the payments were online, which indicates a shift in consumers' attitude who now trust online payment system". That said, cash-on-delivery remains the dominant payment method.

Growing mobile broadband penetration is seen as the major driver of this development. "Third-generation (3G) mobile internet technology is reaching remote areas and adding new internet users thus boosting our traffic," explained Shayaan Tahir, CEO of online retailer Homeshopping.

The speed of the change taking place became evident, as he indicated that eight months ago around 20% of site traffic came from mobile but that has now leapt to 50%.

More generally, the number of broadband users in the country has grown almost fivefold to 23m in the course of the past 12 months; around two-thirds of those users are aged between 18 and 34 and are shopping online.

But e-commerce is only starting to grow up in Paksitan; Tahir pointed out that "The country's overall retail market is worth $40bn but we are still 0.2% of that".

Data sourced from The Express Tribune; additional content by Warc staff