Arsalan Ali
Pakistan can have a thriving ecommerce ecosystem by overcoming logistical challenges, building consumer confidence, enhancing digital payment solutions, and streamlining cross-border transactions, said Faisal Suhail Butt, Ecommerce Policy Expert at the Ministry of Commerce. Talking to WealthPK, he said the ecommerce market in Pakistan had emerged as a promising sector, positioning itself as the 37th largest market worldwide worth around USD5.9 billion in 2021.
He said ‘Khadija Program’ – an initiative under the Pakistan Single Window (PSW) framework – played a vital role in empowering women entrepreneurs in the ecommerce sector. “Leveraging women's purchasing power, overcoming mobility barriers, and providing knowledge about international trade, Khadija program has enabled women to thrive and contribute significantly to Pakistan's e-commerce ecosystem,” he added.
“It is crucial to tackle domestic hurdles in order to strengthen the e-commerce ecosystem. Consumer confidence can be strengthened by amending the consumer protection acts, ensuring consistent consumer protection measures across provinces, and encouraging online merchants to adopt return policies and international best practices’’. “Reliable and safe electronic payment service providers are critical for a thriving e-commerce ecosystem. Our financial institutions and commercial banks should continue educating the public about protecting their financial information,’’ he continued.
“Addressing compliance costs and taxation issues for micro-businesses and SMEs, particularly those owned by women and home workers, is necessary to foster financial inclusion and enable their participation in the e-commerce sector,’’ Faisal added. He said the e-commerce sector grew due to the increasing internet and smartphone accessibility, improved logistics services in urban areas, emergence of new players, enhanced access to digital financial solutions, and a tech-savvy young population.
Quoting the State Bank of Pakistan, he said 60% of e-commerce transactions in Pakistan were conducted through the cash-on-delivery (COD) method. “The private sector estimates suggest that an overwhelming 90% of e-commerce transactions are cash-based. Considering the presence of undocumented transactions, the current valuation of Pakistan's e-commerce market is estimated to range between Rs350 and 400 billion,” he added. According to Muhammad Shahrukh Khan, a creative content strategist at URTASKER (a leading marketing agency), Pakistan could learn from the experiences of leading e-commerce players such as China and the US to fully realise the potential of e-commerce.
“To increase the potential of e-commerce in Pakistan, the government should devise investment-friendly taxation policies and ensure intellectual property rights for the businesses operating in the sector,” he suggested. Additionally, he said, there was a need to develop a robust supply chain structure in the country. According to the Pakistan Business Council, global cross-border e-commerce trade in 2021 was estimated to be about $784.6 billion and expected to grow at a CAGR (compound annual growth rate) of 26.2% between 2022 and 2031, reaching $7.9 trillion by 2031. In 2022, global e-commerce sales were estimated at $5.5 trillion, accounting for about 19.7% of total global retail sales.
Credit: Independent News Pakistan-WealthPk
