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EditorialPakistan's e-commerce problems

Pakistan’s e-commerce problems

E-commerce is a fairly new concept in Pakistan. The biggest e-commerce marketplace in the country, daraz.pk, is merely 10 years old and has been a trendsetter. Others, although older, did not gain much fame. However, there is a lot of e-commerce activity from different brands that provide the online shopping experience. Founder and group chief executive officer of Daraz Bjarke Mikkelsen is of the view that in Pakistan, although the market is huge, there is low trust and seller education. He also said that Daraz has been facing losses for the past eight years and is nowhere near break-even for the next three to four years. However, since the future of e-commerce in the country seems bright, they will stay in business.  That is the only promising thing in his interview with an English daily.

Low trust is a huge issue in Pakistan and it is on the sellers to develop this. Although platforms like Daraz provide instant customer support and give refunds if the products received are not what was ordered, customers tend to become hesitant before ordering next time. Pakistanis are skeptical about shopping online due to the numerous frauds they have faced over the years. Before e-commerce websites, telemarketing was extremely popularand, usuallyly, the products ordered through those platforms turned out to be of low quality and quite different from what was advertised. This has led the older generation to believe that online shopping will also result in a waste of money. The younger generation, on the other hand, believes that online shopping is the future and they use e-commerce websites much more than those of the older generation. However, it is on the sellers to build trust and keep this young lot as a returning customer.

Seller education, as mentioned by CEO Daraz is also a huge problem. Most sellers send faulty or wrong products to the buyers, which also results in a lack of trust and halts future buying. Many times, sellers send the wrong colour or size, which makes the buyer think that they should instead buy from physical shops. Moreover, many items are advertised to be something else, but they turn out to be something else. Therefore, it is of utmost importance to educate the sellers in creating a solid customer base with high-quality products.

Another important aspect of e-commerce is also the customer’s buying style. Many people do not know how to shop online. Websites like Daraz provide the option of reviews. Buyers have reviewed many products and Daraz gives rewards to those who review products. Customers must look at reviews before buying products, as they give a fair idea of what the product is like. Since online shopping is a fairly new phenomenon, it will take time for either party to understand the whole experience.

Pakistan is the 46th largest market for eCommerce with a revenue of US$4 billion in 2020. This figure shows that there is a lot of potential in the market and if done right sellers, buyers and online marketplaces can benefit. If quality standards are maintained and sellers are vetted before being allowed to sell, this sector may reach new heights.

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