In the second half of 2015, as Pakistans 30 millionth internet user logged on, it

became clear that the foundation for an ecommerce revolution had been laid.
According to the report, internet penetration in the country has reached 16%, while
broadband subscribers have more than doubled in the last two years.
The internet is already changing the way connected Pakistans shop. Not only has it
opened up a new world of lower prices and choices, it has also emerged as a
wealth-creating tool for entrepreneurs.
Given the size of the Pakistan market and growing consumerism, industry sources
arent surprised that ecommerce companies are reporting double-digit growth.
Most e-commerce ventures, particularly online retail, are experiencing phenomenal
growth with online transactions growing by leaps and bounds every month. said
Muneeb Maayr, CEO Daraz.pk
Tariq Ahmed Saeedi business journalist, said: Ecommerce is a force multiplier for
retail. Whatever retail does for the economy, e-commerce improves and enhances.
The primary advantages are reducing the cost of intermediation, enhancing
consumer information and choice and democratising retail. All of these would go
towards increasing choice and lowering cost for consumer.
Online ticketing and banking services are already popular, but Pakistanis are only
just dipping their feet in the e-commerce pool. Slowly, the comfort level is extending
to other products and services.
Pakistan e-commerce revenues grew to $15.8 billion in 2015, from $12.1 billion in
2014 and $10.5 billion in 2013. The study estimated that online retailing would
catch up with online travel by 2015, each contributing $12 billion in revenues.
The benefits are clear to consumers convenience, lower prices and price
comparisons. As Pankaj Jain, consultant at Tlabs and lead organiser at Startup
Weekend said: Customer service is the key. If you can build a customer-centric
ecommerce company in India that provides a Zappos-like experience, you will have
a major edge over other ecommerce businesses.
The rise of smartphones, secure transaction gateways, banks going online with a
vengeance and the easy issue of credit and debit cards have aided ecommerce.
All this has attracted investors in a big way; in 2011, the sector received
investments of more than $1 billion.
In January 2011, Snapdeal.com, an online deal shop, raised $12 million and another
$40 million at a valuation of $100 million six months later. Meanwhile, online
retailers Fashionandyou.com and Myntra.com raised $40 million each.
Flipkart, the books retailer which has now diversified into various products, raised
$150 million from Accel Partners and Tiger Global Management, putting its valuation
at $850 million.
While the opportunities are myriad, so are the challenges. Foremost among them is
finding a way to grow the customer base. What is needed, said industry sources, is

a quantum leap - getting at least 25% of internet users to start transacting online
from the present 6%-8%.
Logistics timely deliveries, ensuring against damage during shipments, return of
products and reversal of faulty transactions are a problem too, as is the poor
bandwidth and unreliable internet connections.
English is the dominant language of e-commerce, but only 35% (estimated) of the
population speaks it. As the internet adapts and assimilates different languages, the
industry will have to follow suit to ensure its customer base expands.
The sizeable investments, however, are allowing Indian firms to build delivery
channels and devise payment systems. Cash on delivery, for instance, is the
preferred payment option in India and will remain so until consumers feel secure
about parting with their credit card numbers online. All leading players have
introduced this option. The industry is now betting on Indias young consumers
more than half the population is under 25 years of age and more than 65% under
35 years to push growth.