We are all aware of how the Internet has changed the entire world in every aspect and Pakistan’s retail sector is no different. E-Commerce has altered and transformed the shopping experience and the business environment. Providing the society a sophisticated way to shop, putting endless opportunities for businesses, allowing for development and growth, E-commerce has proved to be fruitful. In this article, we shall go through the distinct phases of the shopping experience that will be unlocked through e-commerce in Pakistan’s retail sector and what will be in store for its future.
Diversified E- Commerce in Retail in Pakistan:
The last decade has seen an unprecedented increase in ecommerce in Pakistan. The total number of subscribers in Pakistan is greater than 100 million according to the Pakistan Telecom Authority hence increasing the number of potential customers for the shopping portals. The likes of Daraz, OLX and other Pakistani online stores have helped in the proliferation of this digital marketplace. Shopping portals such as al-fatah , shophive and many others are providing opportunities and options to online shoppers.
The Pandemic played a large role in further propelling this process, since restrictive measures and instructions to maintain social distance prompted a lot of customers to seek alternatives via online shopping. For many businesses, this was a strong message that showed the necessity of being online, otherwise there was a risk of not being in demand at all as the world was entering the digital domain.
E-Commerce and Its Impact on Retail:
Pakistan’s retail industry has been challenged by e-commerce to such an extent that its functioning can no longer be viewed in isolation. Let’s see how:
1. The change in consumers’ behavior:
One of the notable transformations can be noticed in the change in the consumer behavior. E-commerce is gaining popularity in Pakistan by virtue of people being able to shop from the comfort of their homes. Due to online credit card payments, mobile shopping applications, and logistic companies offering next-day delivery, consumers are now more willing to shop online rather than physically visit a store.
Key contributors to the growth of e-commerce include the ability to compare prices, product variety, and the reading of product reviews before buying. For the youth in Pakistan, however, once they became well-versed in technology, using it for online shopping easily became a part of their lives.
2. Increased Market Area Coverage for Retailers:
E-commerce enables the majority of Pakistan’s retail outlets to expand their market area beyond the limitations of a single physical location. Customers in urban, suburban, as well as rural areas can access a wider range of products offered by different brands irrespective of their size.
Today, e-commerce has revolutionized the retail business, and they don’t have to depend on only foot traffic or clients from a specific locality. This has enabled retailers to have access to the entire Pakistan, thus widening their contact base greatly. Moreover, the digital marketing options available today enable businesses to tailor their advertising to select certain aspects of the population and ensure that their products get to the right people.
3. Increased Competition and Innovation:
The increased growth of e-commerce has raised the level of competition in retail businesses in Pakistan. Now, online stores do not have geographical barriers and people are compelled to limit their online shopping to the constraints of the brick and mortar stores. This has triggered enhanced creativity leading to a wider range of products as marketers seek to meet the requirements of consumer class.
Now, even small businesses can get more exposure through marketplaces like Daraz, where they can post their products and find many sellers. So along with the enhanced variety of products, there is an increased customer focus with businesses seeking to improve customer satisfaction through better service, reduced delivery times and easy returns policies in order to win over clients.
4. Streamlining Retail:
Understandably, e-commerce is noticeably altering the retail world and its effectiveness for retailers developing a clear competitive advantage. They are able to deal with replenishment, sales and address information in one system, thus optimizing performance and reducing costs. This has made it easier for companies to manage their inventory to coordinate and evaluate performance. In addition, e-commerce has enabled the use of proper supply chains, lowering the lead time in the order cycle. This further enhances customers’ satisfaction as retailers are now able to minimize their lead time to about one to three business days.
5. Retail Sector Transformation:
As e Commerce expands there is an evolution in the jobs that are available within the retail sector in Pakistan. These are said to include, digital marketing, customer service, logistics and e-commerce retailing as opposed to brick and mortar retailing which is slowly becoming obsolete. Apart from that, companies are looking into tech and automated solutions that will enable them to hire employees in such fields as web developers, data analysts, and in IT support. This means that fewer manual retail roles will be available for these people, but there will be new ones, especially those related to information technology and tasks associated with logistics.
Difficulties Faced by Pakistan’s E-Commerce Industry:
Despite the fierce expansion, the e-commerce industry in Pakistan continues to grapple with several difficulties.
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Lacking Payment Gateways
One of the chief concerns is the absence of sufficient and trustworthy payment methods. It is true that in Pakistan JazzCash, Easypaisa and bank wire transfers are gaining traction, but a lot of consumers are still comfortable using COD (Cash on Delivery) because of online scams. It may sound funny, but due to the popularity of COD, the cost of delivery skyrockets and just like that the return rate goes through the roof as well, customers delay to pay for their purchase.
Supply Chain Management
Delivery services have gotten better, but supply chain logistics kicks in for certain regions of Pakistan which are predominantly covered in rural areas. Companies involved in the e-commerce sector need to develop supplier chains and work with distribution companies in order to meet the higher demand for the reliable and swift delivery of items.
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Lack of Trust By The People
Fraud, poor quality of products and delayed product delivery still further resent a major portion of the Pakistan online shoppers. earning the trust of the consumers is the most vital objective in order for the company to flourish in the ecommerce market. These concerns can be addressed to some extent through well articulated guidelines, having a range of feedback and positive review from customers, and incorporation of secure payment methods.
The Future of E-Commerce in Pakistan: A Revolutionary Change
The future of e-commerce in Pakistan appears to be very optimistic, taking into consideration the growing population of internet users, increased mobile phone usage, and an up and coming ecosystem of digital payment. The government’s initiatives, such as the Digitization of Pakistan Policy, are set up in a way to provide more opportunities to the online business sphere.
Furthermore, automation through modern technological advances such as AI and machine learning will also allow retailers to enhance the shopping experience along with both reverse and forward logistics. Also, the persistent mushrooming of social commerce that is the use of social media as a store will also be another factor which will determine the growth of e-commerce in the country.
Conclusion:
With E-commerce replacing traditional commerce, it has now become mandatory for retailers to go online as the world evolves with each passing day. The nature of the market is dynamic and the evolution of the market presents new challenges. The challenges that the market presents are not unbeatable, all that is required is relentlessness in innovation, investment and state intervention. And following these and only these will e-commerce be able to establish itself in Pakistan, and attaining this level target guarantees prosperity for the economy as a whole.
As the trend of shopping online becomes more apparent the retail sector of Pakistan will keep pace with the diversification and in doing so will set the templates for the future of commerce in this country.
