E-Commerce Comes to Pakistan
Guest Post by Monis Rahman
Founder, Chairman and CEO of Rozee.pk
Pakistan is late to the party. E-commerce is booming throughout our immediate region. India's leading e-commerce website, Flipkart, recently raised a record $1 Billion in new investment, handling 5 Million shipments each month. The website sees so much potential in mobile shopping that it has a stated goal of becoming "the mobile e-commerce company of the future".
This post reflects the author's assessment of the e-commerce scene he sees in Pakistan. The owner of this blog does not necessarily agree with the contents of this guest post.
Here's a couple of video clip on e-commerce company leaders in Pakistan:
https://www.youtube.com/watch?v=ehNY5GuY8Vw
http://www.dailymotion.com/video/x1aoyc7_daraz-pk-co-founder-farees-shah-on-ecommerce-in-pakistan-at-ptvworld-part-1-4_tech
Founder, Chairman and CEO of Rozee.pk
Pakistan is late to the party. E-commerce is booming throughout our immediate region. India's leading e-commerce website, Flipkart, recently raised a record $1 Billion in new investment, handling 5 Million shipments each month. The website sees so much potential in mobile shopping that it has a stated goal of becoming "the mobile e-commerce company of the future".
To our north, China's e-commerce leader, Alibaba, set a global record when it listed its shares on the New York Stock Exchange in September. Alibaba's Initial Public Offering raised a staggering $25 Billion, making its record-breaking IPO the biggest in the world. Today the Chinese e-commerce giant's market capitalization is over $250 Billion exceeding that of Wal-Mart, the world's largest old economy retailer. The market value of e-commerce companies in Pakistan's immediate vicinity including Turkey, the Middle East, India and China exceeds half of a trillion dollars.
But the party has indeed finally started in Pakistan as well. By 2017, the size of our e-commerce market is expected to reach over $600 Million from it's current size of $30 Million spent on online purchases annually. There are several factors driving this growth, which will dramatically change the way we buy things over the next several years.
Growth of Internet Penetration
Pakistan's Internet penetration rate historically exceeded that of India until 2009. In 2009, India launched 3G and its Internet penetration sky-rocketed. The same hockey stick growth took place in Sri Lanka's after its 3G launch in 2006. With Pakistan's long awaited entry into the 3G club a few months ago, there will be a similar burst of Internet accessibility which will further catapult online purchases.
Following the pattern of our neighbors, Pakistan's Internet enabled population will increase from 30 Million users today to 56 Million in 2019. Over the next five years, 28% of the country's citizens will have Internet access. This unprecedented reach will transform not just how consumers purchase goods, but will also significantly impact several other industries. My own online jobs classifieds site, ROZEE.PK, today processes 40,000 job applications a day and has helped over 1 Million people find jobs. Social media sites including Facebook and Twitter are transforming how we consume news and shape opinions.
Ubiquity of Access through Mobile
Along with the rise of Internet accessibility through 3G, Pakistan is simultaneously witnessing a surge in smartphone usage. There are an estimated 9 Million smartphone users in Pakistan, using handsets that are fully equipped with web browsers and online connectivity. Smartphones have become increasingly sophisticated, not only substituting many functions previously only capable through desktop and laptop computers, but also greatly increasing the ease of going online. Not only is the Internet becoming more accessible to consumers, consumers are also becoming more accessible to Internet merchants through the ubiquity of the smartphones in our pockets.
While the growth of smartphones in Pakistan is linked to the rise of Internet penetration, it is more so driven by the declining cost of increasingly sophisticated devices. Chinese companies which have traditionally manufactured devices for the world's leading mobile phone brands including Apple and Samsung, are now OEM'ing their own handsets for a fraction of the cost powered by Google's Android operating system. So significant is this trend that Samsung's third quarter profits fell by 50% as its mobile business continued to lose ground to low-cost Chinese smartphone makers.
The sub Rs. 5,000 price point of relatively powerful smartphones in Pakistan is enabling online accessibility to penetrate a lower untapped income strata of society. My cook now downloads recipes from the Internet on his smartphone.
India's Flipkart sees so much potential in mobile shopping that it has a stated goal of becoming "the mobile e-commerce company of the future".
Online Payment Initiatives Are Mushrooming
While over 95% of online purchases are fulfilled through Cash on Delivery (COD) in Pakistan, several promising initiatives are underway which will make it easier to pay directly online. Many banks and telcos alike have launched branchless banking and m-commerce initiatives ranging from MCB Banks's MCBLite, Telenor's Easy Paisa, Mobilink's Mobicash, Zong and Askari Bank's Timepay, UBL's Netbanking and others. The number of branchless banking agents which facilitate offline payments for online purchases tripled from 41,000 in 2012 to 125,000 in 2013, making it increasingly easier and more convenient to transfer money.
One of the most frequent complaints from Pakistan's online sellers of not being able to get merchant accounts that allow them to card payments online, has been abated. While Citibank Pakistan was once the only bank in the country to offer online merchant accounts, it was also notoriously difficult for businesses to get approved. When the bank wrapped up its consumer banking operations in 2012, it left its approximately paltry 14 approved merchants high and dry without an online card processing facility. However, UBL has since launched its Go Green Internet Merchant Account product for businesses which is far more reasonable in its on-boarding criteria. Online merchants can now potentially collect payments electronically from 12 Million debit cards in Pakistan.
Perhaps the most successful online payment solution currently available in the country is Inter Bank Fund Transfer (IBFT). A large volume of payments are made by consumers directly going to their bank's website to electronically transfer funds to online stores. Most banks are now offering their customers net banking IBFT payment facilities through their websites, bringing a majority of the country's banked population into the fold of electronic payments.
Maturing Logistics and Parcel Delivery Infrastructure
Currently 95% of online purchases are paid for through COD at the time the parcel is delivered to customer. TCS, BlueEX, Leopards and other couriers are providing COD delivery services across over 150 cities in the country. This becomes especially relevant when considering that approximately 35% of the the country's monthly 70,000 COD shipments are delivered to cities outside the three main urban centers of Karachi, Lahore and Islamabad. While urban shoppers are more online as a percentage of population, the value for rural shoppers is higher as many products are not available in their local markets. This implies a huge untapped segment of the population that will increasingly transition to online shopping.
Growing Trust in Online Storefronts
One of the main obstacles to the growth of e-commerce is the lack of consumer trust in purchasing from the "cloud". As a dotcom entrepreneur in Silicon Valley during the 1990's, I recall the prevailing conventional wisdom at the time: people would never give their credit card information on the Internet to buy items. Today, over 72% of Internet users in the US are digital shoppers. This contrasts sharply with less than 3% of Pakistani Internet users who have bought goods online. Although we have a long way to go, there is correspondingly huge upside potential as well.
After initial hesitation, an inflection point in consumer behavior was reached in the US during the late nineties with strong online storefront brands such as Amazon taking to mainstream media. The large amount of investment these sites were able to raise, coupled with highly professional teams, led to positive shopping experiences for the risk averse early adopters who ventured to buy online. We will see this same pattern in Pakistan.
For the first time in the country's history, we are seeing online brands deploying significant advertising budgets for mainstream media advertising. Deep pocketed general classifieds sites like OLX, funded by the South African mega media group Naspers, and Asani, a Schibsted funded company from Norway, have embarked in our online industry's first media war with ads competing for our eyeballs. Rocket Internet, which runs Daraz and Kaymu in Pakistan, recently completed an $8.2 Billion IPO in October of this year. Daraz and Kaymu are well funded and will be pouring capital into the Pakistani e-commerce market in a magnitude not seen here before. Several other Pakistani online players will be launching their TV ads in the coming months, giving new credibility to the online medium and e-commerce.
All of these developments will lead to a rapid increase in trust as first time online shoppers experience e-commerce and generate acceptance through word-of-mouth.
Pakistani E-Commerce Companies |
Big foreign investors are a swooping in to become first movers in key verticals in the world's sixth most populous country with the goal of claiming online thrones. Visionary local players like Home shopping, Shophive and Symbios are organically emerging from our ecosystem and bootstrapping to success. This is a winner-takes-all market: the largest marketplaces grow the fastest making it unviable for new entrants as the industry heats up. And this industry has a voracious appetite for capital. The e-commerce party has started.
The Author is Chairman and CEO of Naseeb Networks and is one of Pakistan's most prolific Internet entrepreneurs. He runs leading online job classifieds sites ROZEE.PK in Pakistan and Mihnati.com in Saudi Arabia.
This post reflects the author's assessment of the e-commerce scene he sees in Pakistan. The owner of this blog does not necessarily agree with the contents of this guest post.
Here's a couple of video clip on e-commerce company leaders in Pakistan:
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Foreign investors, keen to expand in other countries, have seen South Asia as a lucrative market with its bulging population and growth in internet penetration. Rocket Internet is one of the foreign companies that have made their presence felt in Pakistan, taking on local competition with its aggressive expansion strategy. Backed by heavy investments, the German based e-commerce focused venture capital firm and startup incubator has captured a share in the country’s growing market.
The company has given stiff competition to leading portals in various spheres including pakwheels.com, zameen.com and homeshopping.pk with clones including carmudi, lamudi and daraz.pk clones. Since the start of their operation in 2012, they have doubled the number of their ventures, pouring in millions of euros.
During his visit to Karachi, Asia Internet Holding co-Chief Executive Officer (CEO) Koeen Thijssen said that Pakistan has the most number of ventures opposed to the rest of the Asian countries Rocket Internet has invested in. Asia Internet Holding, a joint venture between Rocket Internet and Qatar-based Ooredoo, builds and funds startups across Asia, particularly focusing on ecommerce and mobile services. The core focus is emerging economies in Asia, particularly Pakistan, Myanmar, Thailand, Malaysia, Singapore, Indonesia, Vietnam and the Philippines.
He said Rocket Internet will pump €180 million during the next three to four years as investment in Asia, declining to quote even a ballpark figure for Pakistan’s share.
“But a major chunk will be invested in Pakistan,” he said.
Recently, Daraz.pk – based on the amazon model – included the electronics category on its online shopping store. “The response has been very good with almost 100 iphones sold in a matter of seven days.
“The profit margins in electronics are very low. The local sellers did not have the platform, skills or the delivery network to sell in high volumes, so they go through us.”
The co-CEO said Pakistan is an interesting case because most of the local ventures are headed by Pakistani nationals, while in the rest of the Asian countries, expats tend to head the ventures. “It’s very unique for Pakistan. It seems that the country naturally has the entrepreneurial gene,” he said, appreciating the country’s workforce. “It’s difficult for expats to recognize local market mechanics.”
When asked about the company’s market strategy, he said, “It is simple; it aims at transparency by providing comparable prices on its websites. We are also using market place strategy for all our ventures,” Thijssen added.
http://tribune.com.pk/story/803154/e-commerce-pakistan-very-much-on-investors-map/
Just two months ago, e-commerce company Markhor, which works with local artisans to produce high-quality men’s leather shoes, became Pakistan’s most successful Kickstarter campaign, raising seven times more than its intended goal, catching the attention of Seth Godin and GOOD Magazine.
There is no greater evidence of this positive change than in Pakistan’s burgeoning technology ecosystem. In a new report released by my company, Invest2Innovate – which was commissioned by the World Bank’s Consultative Group to Assist the Poor (CGAP) – we mapped the number of startup competitions, incubators, university programs, coworking spaces and forums, and analyzed the gaps and challenges entrepreneurs continue to face in the country.
Three years ago, the ecosystem was relatively nascent, with just a handful of organizations. Today, the space is unrecognizable and brimming with constant energy and activity.
A closer look at Pakistan’s tech scene
Plan9, the country’s largest technology incubator launched by the Punjab Information Technology Board, recently announced PlanX, its new startup acceleration program. The Lahore University of Management Sciences (LUMS), one of Pakistan’s top universities, recently graduated the first class of incubatees from its Foundation program.
The IT trade association, Pakistan Software Houses Association for IT & ITES will soon launch Nest i/o, a Karachi-based technology incubator seeded by Google, Samsung and the US Department of State. Coworking spaces like Basecamp in Peshawar, DotZero and HQ in Karachi and TechHub in Lahore are sprouting all over the country – providing space to fledgling and growing companies.
Hackathons and Startup Weekends are producing startups like Savaree (a ride-sharing application similar to Lyft) and Groopic (a photo editing application), and online publications like TechJuice and PakWired also provide constant coverage of rising companies, events and other startup-related news.
While this phenomenon is not unique to Pakistan – we are watching startup communities sprout and thrive all over the world – there are several factors that make us hopeful about the growing ecosystem.
First, Pakistani entrepreneurs have largely led the growth of Pakistan’s ecosystem. In his book, Startup Communities, author and cofounder of TechStars Brad Feld noted that leaders of a growing startup community must be entrepreneurs who have a long-term commitment to growing the ecosystem and “must be inclusive of anyone who wants to engage with the community.”
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For example, DotZero, one of Pakistan’s first major coworking spaces, was cofounded by four successful technology entrepreneurs based in Karachi. The Karachi Institute of Technology & Entrepreneurship (KITE), established in by a Pakistani entrepreneur, is providing an alternative and innovative learning environment to students wishing to enter the technology sphere.
Second, though security issues, corruption, and political instability have increased the perceived risk for foreign investors, it has also in turn caused Pakistanis to look inward, build indigenous networks, and replicate models that have worked in other countries for the local market.
As a result, we’ve seen an ecosystem that is being built by Pakistanis for Pakistan. Moreover, given that 2/3 of Pakistan’s 180 million people are under 30 years old, we have a young population who are hungry and determined to change the environment around them. Young Pakistanis are launching local chapters of global brands like TEDx, Startup Weekend and Startup Grind, further fostering idea generation and the dialogue around innovation.
http://thenextweb.com/entrepreneur/2014/12/20/rise-pakistans-startup-ecosystem-shifting-traditions-inward-inspiration/
The company will offer a free LTE trial to its customers for seven days following the commercial launch and charge Rs5 per MB for data transactions afterwards.
The commercial launch of Warid’s LTE services came following a month of unlimited 4G LTE trials to its postpaid customers in the abovementioned six cities.
Company’s customers have been notified regarding the conclusion of unlimited trials and tariffs for data transaction through SMS, emails as well as automated calls.
“Over the years, Warid Telecom has developed a reputation for breaking new ground in Pakistan’s mobile landscape. We have always remained at the forefront of innovation: our decision to transform directly from 2G to LTE technology is a reflection of this spirit of innovation,” Chief Executive Officer (CEO) Warid Telecom, Mr. Muneer Farooqui, said while speaking on the launch.
Ericsson, a leading hardware provider for telecommunication services, is Warid Telecom’s partner for rollout of LTE network in Pakistan.
Farooqui said Warid has earmarked US 500 million dollars for the development of infrastructure to roll out 4G LTE in the country in next five years.
“Moving forward to 2015 and beyond, we will continue to invest in premium technologies and network infrastructure to ensure service excellence to our patrons who have always held us close to their hearts,” he said.
Warid was the only mobile company which had not participated in government’s 34/4G auction, held in April, and has directly switched from 2G services to 4G-LTE technology with its available spectrum that it had purchased in 2004.
Zong, the only company to have bagged the license of 4G spectrum in the auction, had launched its 4G LTE services in seven major cities in September.
- See more at: http://www.pakistantribune.com.pk/28870/warid-telecom-launches-4g-lte-services-pakistan.html
KARACHI: The country’s telecommunication revenue increased to Rs90 billion during fiscal year 2014, reflecting growth of 24.6 per cent, which is more than double of 11.66 per cent of FY2013.
According to Pakistan Telecommunication Authority, the cellular sector covered more than half of the telecom sector’s overall revenues and reached Rs47 billion during the year under review, translating to a year-on-year growth of 47.4%.
As of June 30, 2014 data revenues account for 19.3% of the telecom sector’s overall revenue, up from 16.4% at the end of FY13 – the number for cellular segment, too, increased from 7.3% to 10.1%.
According to PTA, the data revenue trend is likely to continue in the coming years with increased use of smart phones, tablets and laptops in the consumer market and an uptake of OTT services, such as WhatsApp, Viber and Facebook messenger, which will eventually replace traditional voice communication.
Import of mobile phones showed record growth in FY14 as handsets worth $544 million were imported during the period, a 21% year-on-year increase.
Although voice traffic continued to show impressive growth (40%) in FY2014, conventional text messages – one of the main revenue streams for cellular mobile segment – struggled against the more popular social media applications.
The total number of SMS exchanged over the cellular mobile networks dropped to 301.7 billion during FY2014, down 4% compared to 315.7 billion last year, statistics showed. The average SMS per cellular subscriber per month also reduced to 180 in FY14 compared to 214 of FY13.
The telecom regulator attributed the decline in conventional text based messages to the rising influx of smart phones and use of mobile internet, OTT and social media applications that have reduced the subscribers’ dependence on traditional mode of SMS.
Though these OTT services have triggered the growth of CMOs’ data revenues, free messaging and calling services also dented the sector’s average revenue per user (ARPU), a key economic indicator to measure the average revenue that service providers generate from a singlesubscriber.
In FY14, the cellular segment’s monthly ARPU decreased to Rs199 compared to Rs211 of the last fiscal year, according to statistics compiled by PTA. The regulator, however, clarified that the ARPU was calculated based on the number of SIMs sold till that time and the actual ARPU was higher.
Quoting a GSMA’s market analysis on Pakistan, the regulator said the cellular subscribers in the country possess 2.17 SIMs on average, which translates to an actual monthly ARPU of approximately Rs432.
http://customstoday.com.pk/telecom-revenue-up-by-24-6-to-rs90b-in-2014-cellular-sector-grows-47-4-to-rs47b/
Pakistan is slowly but surely joining the high-speed internet world as well. It was late to the game with 3G and 4G mobile services. The latter arrived only in April last year, but ended 2014 with close to 8 million subscribers – slightly more than Singapore, who first got 4G in early-2013. Meanwhile, another 15 million people access the internet from their mobile phones – that’s half of the total number of internet users in the country. It is expected that the number of broadband subscribers will rise to 45 million by 2020.
There are a number of local startups who have made a name for themselves on the world stage, too. Enterprise social network Convo, who raised US$5 million from a US-based VC firm Morgenthaler Ventures in 2013, is widely hailed as an example of Pakistani ingenuity. Morgenthaler Ventures has invested in big names such as Apple and Evernote.
Fashion-with-a-mission startup Popinjay has produced a series of high-end handbags that have received rave reviews from several national and international media platforms, and even in fashion shows. Online car portal PakWheels also recently grabbed US$3.5 million from Malaysia-based VC Frontier Digital Ventures.
See: Popinjay dreams of making poverty a thing of the past for Pakistani women
More importantly, the high-flying founders of these startups constantly mentor and give advice to the next generation in local startup programs and competitions, of which there are many.
The pieces are in place
Tech in Asia held its first meetup event in Lahore at Arfa Software Technology Park, a grey mass of buildings that we would end up spending most of our time in. Security here is tight – my colleagues and I passed through a grand total of four checks before getting the all-clear, and were asked where we were from multiple times.
Jazib Zahir, founder of games studio Tintash, tells us that it is generally the case for establishments that the government considers to be of national importance. Despite being a regular in the premises, Zahir himself had to show his identification card along for verification purposes, as did other locals.
Much like Singapore’s Block 71, these buildings are home to many local startups, many of which are housed in the resident accelerators and incubators. These organizations account for many of the current batch of budding Pakistani startups, and hence quite literally hold up the local startup ecosystem.
The Punjab Information Technology Board – a governmental body – is responsible for the development of two key programs located here: PlanX and Plan9. As the names suggest, the two are close relatives – PlanX is an accelerator born out of Plan9’s incubation program. While the latter focuses on idea-stage startups, only those who have a product and are looking to expand further can join the former.
A round of introductions at PlanX’s quaint working space reveals startups with raw but fascinating products. Several of them have in fact gone on show and won accolades at international startup events, such as Startup Turkey and Startup Asia – these trips are fully sponsored by the government. PlanX’s BookMe, for example, was one of the finalists at Tech in Asia’s Arena competition in Jakarta last year.
https://www.techinasia.com/pakistan-startup-ecosystem-perceived-violence-held-back/
Cash is king in Pakistan. But digital alternatives are finally emerging
This could finally disrupt the cash-only culture and local payments industry. It could even chart a course that emerging and future startups can take.
Ahson Saeed, head of marketing and business development at Monet, says the aim is to change the way both consumers and retailers focus on cash payments in Pakistan. “Complete digitization is our end goal,” Saeed says. This can give retailers “a data-centric system that is absolutely free from error,” he adds.
Useful for startup services
Saeed points to the ride-sharing app Savaree and the recently-launched contractual worker startup Labourforce.pk as examples of services that would benefit from the mPOS system that his firm has launched. “It is imperative for early-stage startups to have streamlined cash flows, and by employing mPOS the threat of pilferage as well as higher insurance costs are both removed.”
For startups to scale up in Pakistan, it is imperative for a larger proportion of the population to be comfortable in using their services. This means that smaller grocery stores, tobacconists, tea stalls, vegetable retailers, and even transport and communication services all need to be brought on board with digital payments. To do this, Monet is venturing into areas which private sector banks have traditionally ignored.
The first web company to deploy this new mPOS system is Daraz, the Amazon-esque ecommerce startup run by Rocket Internet that has been operating in Pakistan since July 2012. Amyn Ghazali, head of alternative payments at Daraz, is similarly optimistic about the impact that this will have on the business. “Over 90 percent of our existing orders are done on a cash-on-delivery basis,” he reveals to Tech in Asia. “This model is inefficient and restrictive, as insurance costs burgeon for big ticket items such as electronic goods, mobile phones, and home appliances, thereby impacting our bottom line [This]. mPOS is a workaround which benefits both the end consumer and Daraz.”
It is still difficult to ascertain how quickly this would reach mass-acceptance. The positive indications are that this kind of smartphone-connected POS is low-cost technology to implement. The Monet gadget itself comes with the backing of one of Pakistan’s largest private-sector banks, and the founders are working aggressively to market it to segments that are not effectively covered by conventional POS systems. In time, this kind of phone-mounted payment system will certainly redefine how small and big businesses work and how consumers pay for things.
https://www.techinasia.com/pakistan-mpos-systems-replace-cash/
https://vimeo.com/121175832
Easypaisa is a joint venture between Telenor Pakistan, and Tameer Micro Finance Bank, the first bank to get a MFS license in Pakistan.
Of Pakistan's 180 million people, only 15 million have bank accounts and associated access to financial services. The domestic remittance market is estimated at nearly USD 7 billion through formal sources and a similar amount flowing through undocumented, informal channels like Hundi and Hawala.
At Easypaisa, we set out to empower every Pakistani through our broad portfolio of financial services. From sending and receiving money through paying bills to insurance and savings options, Easypaisa allows the customer to choose whichever service best suits him.
In Pakistan transferring funds through conventional formal channels required both the sender and receiver to have bank accounts which was possible for only 15% of the population. Low bank branch penetration and a focus on urban areas and the privileged left the masses without any feasible option for their financial needs.
Easypaisa offered its services as the first of their kind to allow funds transfer in a matter of seconds, requiring only basic KYC. Starting with money transfer, additional products like bill payments, salary disbursal, international remittance, loans, and more have been added over the years.
In 2014 Easypaisa continued its trend of innovation by launching a host of new services. The Inter-bank Funds Transfer facility links Easypaisa with the banking network via a local switch, allowing M-wallets to move funds to and from any account at any of the 35 1-link enabled banks in Pakistan, also allowing OTC customers to send funds to any bank account, enabling transactions between banked and unbanked customers. ATM cards were added to the portfolio to give customers easier access to funds via ATMs. ‘Sehat Sahara’ was launched as Pakistan’s first micro health insurance product, offering health insurance at very affordable rates to a segment that has never before seen such a service. E-payments enables payments through M-wallets via NFC and through OTC as well, specifically targeted towards enabling smaller merchants and micropayments. Handset financing has also been launched and provides customers easier access to handsets with credit scoring based on GSM usage.
The Money Transfer product was initially picked up by customers who did not have access to financial services and belonged to the bottom of the pyramid in rural areas. A study carried out by CGAP and Coffey International in 2011 discovered that the majority of these customers (69%) live on less than $3.75/day, while around two-fifths (41%) of these users live on less than $2.50/day. The majority of this segment was not targeted by banks either because they were not considered economically feasible or because the banks did not have a presence in these areas. Money Transfer was aimed at providing a safe, secure and instant service with minimal KYC requirements that could document and formalize all this money flowing within the country and has since proven itself by moving approximately 1% of the country’s GDP in 2013.
Inter-bank Funds Transfer was launched to bridge the gap between banked and unbanked, enabling payments from unbanked to banked which constitute a large part of the remittance market. The health insurance product is the first of its kind for the target market, and seeks to bridge the gap in healthcare. The e-payments domain suffered from limited uptake so we implemented new technology ( NFC) to bridge the usability concerns around payments. Finally handset financing offers customers without a credit history the ability purchase better phones with a new credit scoring model based on GSM activity.
In Pakistan, there are now over 30 million Internet users and 15 million smartphone users. In fact, recent statistics showed a staggering growth in Internet use of over 550 percent between September 2014 and April of this year, with the total number of 3G subscribers crossing 11 million. Pakistan’s tech device market is predicted to grow by 15 percent in 2015, according to market research firm GfK.
With the increasing availability of online portals, affordable smartphones, plus 3G and 4G services in Pakistan, house hunters are searching the Internet for properties. Consequently, real estate agents and developers are having to adapt their marketing efforts to keep up with the shift online.
In my experience, those in the real estate industry are still predominantly using offline marketing methods, such as newspaper advertisements, billboards and fliers to promote their properties. However, there has been a recognizable move online as the industry begins to see the potential of this medium.
You cannot ignore the benefits of online marketing, which is already a commonplace practice in developed countries. Online marketing leaps over traditional methods in this area because it provides a clear, accurate way to monitor campaign performance.
The real strength is in the ability to target users regardless of where they are, and then analyze their behavior onsite. Emerging markets, including Pakistan, have yet to embrace these new technologies fully. But change is coming, and it is coming fast.
Many Pakistani agents and developers have already found success via this online medium. For instance, Abdul Majeed, CEO of the Property Club agency, said that using online real estate portals has been very helpful for reaching a global audience. Where previously he was only able to target the local property market, now he can secure deals with overseas Pakistanis as well.
Similarly, Wafa Umer, director of Quality Builders Limited, which has developed several residential and commercial projects in Karachi, says that using a digital platform is just as important for a builder as it is for a real estate agent.
By using the services of these websites, Quality Builders has secured a huge number of leads for its ongoing projects from both local and international investors. Moreover, they consider the response from using these property portals to be on par with that of any leading newspaper.
Now, many in the real estate sector have acknowledged the importance of online tools. According to a survey of real estate agents conducted by Lamudi in 2014, 45 percent of agents surveyed reported that the Internet is frequently used in the house-hunting process. This number is expected to accelerate over the next decade as Pakistani house hunters increasingly embrace these modern tools.
By contrast, in the U.S., 84 percent of agents polled by the National Association of Realtors said they would use social media to promote themselves. Although online property platforms are widespread in developed countries, emerging countries are not far behind — and there are significant opportunities here for tech-savvy agents, brokers and developers to be ahead of the curve.
Real estate professionals in Pakistan are gaining access to a wider number of people, both domestically and internationally, by embracing online marketing and building a positive reputation along the way. This trend is the future for our industry, and agents who do not keep pace with these trends will soon be left behind.
http://www.inman.com/2015/05/27/real-estate-marketing-is-moving-online-in-pakistan/
Several factors have contributed to this new thinking on part of the older organized retail players in India. The long awaited FDI in multi brand retail in India has not yet fully materialized, coupled with huge debt that these companies have accumulated, the high operational costs these companies incur and most importantly, the spread of e commerce have all combined to force these companies to rethink their strategies. Online retail in India is at the cusp of a huge upward surge. Its convenience, better pricing, higher usage of debit and credit cards among consumers and the penetration of smart phones, all combine to help the ecommerce business in India grow at exponential rates for many years to come. E commerce has also been the flavour of the venture capitalists and private equity players who have invested substantial amount of money in these businesses in India in the last few years.
Not that the funding will keep coming for eternity. At some point, the Indian e-commerce players like Flipkart, Myntra, Snapdeal et al will have to pause and start thinking about profitability. Right now, they have forced the brick and mortar retailers on the defensive. The old retail businesses have realized their business models are not sustainable and feel vulnerable and threatened by the onslaught of e retailers. At present, the organized brick and retail companies account for approximately 17% of sales, the online retailers 2%, with the unorganized retail accounting for the rest. As per a recent study, by 2019, 11% of the retail sales will be contributed by the online retailers and the share of the brick and mortar retail companies will decline to 13%.
Given that the entry of global retail giants like Wall Mart, Tesco and Carrefour etc into India has been delayed, these old retail companies, most of whom expected to exit by offloading their business to these multinationals, have to survive longer and under difficult business environment. Not that the online retail companies are making any profits right now. Their complete focus right now is on customer acquisition and the easiest way of doing that has been to drop prices and give attractive discounts to the consumers.
http://www.kashmirobserver.net/news/opinion/changing-landscape-indian-retail
Retailing witnessed strong current value growth in 2014 as the economy strengthened. Despite continued energy crises and inflation, hopes of an improved situation due to steps taken by the new government significantly impacted the growth of foreign investment in the country. New entrants to retailing have created a more competitive environment, with companies investing heavily in marketing.
Traditional grocery remains significant but sees slower growth than modern
Traditional grocery retailers continue to represent the largest channel due to their widespread presence throughout the country. However, despite their dominance, their growth was inhibited by the rise of modern grocery retailing. The advent of supermarkets and hypermarkets has allowed consumers to do their shopping in bulk and with added convenience. The trend of consumers preferring a 1-stop solution for their shopping needs continues, as there was increased awareness and acceptability among the masses with regard to shopping in these outlets.
Non-grocery continues to outpace grocery sales
Despite inflation consumers continue to spend an increasing amount on non-grocery products compared with grocery products. Increasing income levels among consumers have allowed them to spend more on non-essentials. Foreign investment has also played a significant role in this growth, as retailers such as Debenhams and Next have opened their outlets in the country in order to capture this growing need among consumers. Moreover, huge marketing investment by retailers such as Gul Ahmed and Servis Shoes has spurred the growth of non-grocery retailing.
Companies spend big on mass advertising campaigns
Competition in retailing has become intense with the entry of several new players. Most marketing campaigns are observed in the non-grocery landscape. Gul Ahmed, Bata, Servis and Outfitters were some of the brands to launch marketing campaigns using TV, radio and print ads. Brands also remain active with social media marketing in order to engage with followers online.
Positive outlook for retailing
The outlook for retailing is positive as the new government has taken steps to solve the energy problem prevailing in the country. This will allow manufacturers and retailers to curb costs and shift focus in growing their business. Inflation is expected to rise moderately, but this rise is expected to be countered by rising income levels. Continued foreign investment is expected to give rise to an increased number of companies as they seek to reap the benefits of retailing growth.
http://www.euromonitor.com/retailing-in-pakistan/report
http://www.mobilepaymentstoday.com/news/centili-signs-direct-carrier-billing-deal-with-major-mnos-in-pakistan/#.VcJELYl2siI.twitter …
Direct carrier billing company Centili recently launched its service in Pakistan with the five largest mobile network operators in the country, according to a press release.
Centili will work with Mobilink, Telenor, Zong, Ufone, and Warid, which have a combined 136 million subscribers in Pakistan.
Centili cited research in the announcement suggesting that smartphone adoption in the country reached 31 percent in 2015, which means that feature phones still account for a large part of the market and play a significant role in the digital society.
Experts predict that by 2020 smartphone penetration in Pakistan will reach 51 percent based on 3G/4G expansion alone. At the moment, monthly smartphone sales are averaging 1.5 to 2 million, with 70 percent of all sales favoring Android-based devices. Centili said it believes this is opening the door for the widespread use of Android in-app payments and it believes it can help bridge the gap in digital purchases in a country where just 2.9 percent of the population owns a debit card.
The billionaire Samwer brothers want to help introduce Pakistan’s shoppers to a local version of Black Friday, the November sales binge that kicks off the year-end holiday retail season in the U.S.
It doesn’t matter that Black Friday is an American invention, said Bjarke Mikkelsen, co-chief executive officer of Daraz, the online retailer backed by the brothers’ incubator Rocket Internet SE. Daraz -- operating in Pakistan, Myanmar and Bangladesh -- will team with brands, wireless carriers and advertisers to offer “hundreds of deals” on Nov. 27, he said.
“It’s a shopping event that was created in the Western world,” Mikkelsen, a former Goldman Sachs Group Inc. investment banker, said in an interview. “It’s a way of attracting many people with great deals and big marketing.”
Daraz, a three-year-old company, is getting more funding to bankroll that effort. On Tuesday, Daraz said it raised 50 million euros ($56 million), including 20 million euros from CDC Group, a British government-owned investor trying to create jobs in Africa and South Asia. The rest came from Asia Pacific Internet Group, Rocket’s joint venture with Qatar mobile carrier Ooredoo QSC.
Daraz is taking a page from Amazon.com Inc. and Alibaba Group Holding Ltd., which have demonstrated how hefty one-time discounts and exclusive merchandise can get American and Chinese bargain-hunters to spend billions of dollars. Daraz also plans its own version of Cyber Monday, the online shopping event held three days after Thanksgiving, which occurs in the U.S. on the fourth Thursday of November.
$20 Smartphones
The plans are in the making even though Pakistan currently has only about 30 million Internet users. Neighboring India has 10 times as many, according to the lobby group Internet and Mobile Association of India, yet Pakistan’s $232 billion economy is on track for its fastest pace of annual expansion since 2008.
Daraz draws 6 million visitors a month spending a combined 1 million euros on exclusive offers for Chinese-made smartphones, TVs and clothes, Mikkelsen said. It sells via websites and mobile apps and almost half its deliveries venture beyond major cities, with smartphones as cheap as $20 being a top seller.
Building buzz will be key for a company that started out as a fashion retailer before expanding its wares in November 2014. It partnered with Google Inc. to host Tech Mela, a 10-day online shopping event that preceded this month’s Islamic Eid al-Adha holiday.
There’s little point advertising online when Internet penetration is so low, Mikkelsen said. Instead, Daraz is recruiting taxi drivers and college students to become “brand ambassadors,” or a sales force paid on commission.
“By tapping into a global shopping phenomenon we will create a more powerful event than if we made up a new concept from scratch,” he said.
The company also refused to share country-wise breakdown of this financial injection but added, “Pakistan is our biggest market,” and the investment split between countries would also reflect that, hinting that a sizeable chunk of the $55 million may be invested in Pakistan. Daraz.pk estimates the current size of Pakistan’s e-commerce market to be somewhere between $55 million and $78 million.
“The e-commerce market in Pakistan is developing fast and Daraz is proud to be part of this journey,” Mikkelson said, “Internet penetration is growing fast, the transition to smartphones is overwhelming and the number of users on the Daraz shopping App is increasing exponentially.”
Starting in 2012 as an online fashion business, the home-grown tech startup later expanded its business model to a general marketplace dealing in electronics, home appliances, fashion and many other categories and became one of Pakistan’s leading e-commerce platforms. In 2014, it launched operations in Bangladesh as Daraz.bd and Myanmar as Shop.com.mm.
The company refused to disclose its revenues but added, “The business is multiple times bigger now and growing double digits on a monthly basis”.
The online shopping website is getting 6 million visitors a month and is spending over £1 million on Infinix Hot Note, a Chinese smartphone being sold on its website, according to TechJuice.
Read: E-commerce growth: Proving to be a steady breadwinner
Daraz is one of the most promising companies in APACIG’s portfolio, the company’s CEO Hanno Stegmann said in a press release. “The markets where Daraz is active are inspiring for entrepreneurs. We are looking forward to supporting Daraz in its ambition to become the number one shopping destination in Asian frontier markets.”
The company is also planning to introduce Black Friday Sales in the country to promote the culture of online shopping gain people’s trust in this segment.
With many new online ventures springing up rapidly and existing businesses recording unprecedented growth rates, there is still a lot that needs to be done to reach the true ecommerce potential of the country and compete with other big players of the region. Several factors are responsible for drastically changing shopping trends over time and driving the growth of ecommerce in Pakistan.
One of the most important factors in the equation is the rate of internet penetration in Pakistan. Pakistan’s internet enabled population is limited to around 30 million users today. This, however, is expected to rise up to 56 million users by 2019. Pakistan’s much-awaited entry into 3G and LTE services in 2014 has increased internet accessibility and will also most likely propel the growth of online purchases. Statistics from the Pakistan Telecommunication Authority (PTA) reveal that the total number of third-generation (3G) mobile subscriptions have risen up to 10.3 million in 2015. The number of 4G or Long Term Evolution (LTE) subscribers also increased to over 68,000.
Over the next 5 years, 28 percent of the country’s population is estimated to have internet access. With increased access to the internet and social media sites such as Twitter and Facebook, marketing trends are also rapidly changing and transforming the way opinions are now being shaped. This will not only transform shopping trends but also significantly impact several other ecommerce arenas, such as online job hunts through Rozee.pk which has facilitated job hunts for over 1 million people, and land, property and rental transactions via Zameen.pk, to name a few.
Even though Cash-on-Delivery (COD) payment methods continue to remain widely popular in Pakistan and account for more than 95 percent of online purchases, other promising initiatives such as branchless banking (Telenor’s Easy Paisa, Zong and Askari Bank’s Timepey, Mobilink’sMobicash etc.) and Inter Bank Fund Transfer (IBFT), are also underway.
Many banks and Telecom operators have introduced the concept of branchless banking, and the number of branchless banking agents facilitating offline payments for online purchases have recently tripled, making it much more convenient to transfer money in a secure environment.
Online merchants now have much greater access to merchant accounts that enable them to collect payments electronically via the 12 million debit cards in circulation in Pakistan. Moreover, with more and more banks now offering consumers internet banking payment facilities, a vast volume of payments are made through IBFT which enables consumers to electronically transfer funds directly from their online bank accounts to online stores.
https://www.techinasia.com/talk/late-emerge-rapid-rise-encouraging-future-ecommerce-pakistan/
A Sheikh from the UAE has invested $5.4 million in Pakistan’s fastest-growing mobile payments company, Inov8 Limited.
His Highness Sheikh Nahayan Mabarak Al Nahayan, is the sole investor in the company’s Series A round, investing $5.4 million in the company which has achieved a valuation in excess of $100 million.
“I have invested in multiple mobile payments and commerce initiatives, and I find the depth of the management, the product platform, and the vision of the founders to be the best I have come across. I look forward to being an integral part of their success story,” Al Nahayan said.
Inov8 Limited is the region’s fastest growing mobile payments company and a dominant player in Pakistan’s market. With its award winning products and services, the company is set to expand to Africa and the Middle East.
“Sheikh Al Nahayan is an avid investor in the industry and understands it quite well,” CEO and co-Founder of the company, Hasnain A Sheikh said while speaking to The Express Tribune, adding that “we are in a strong partnership with Wateen Telecom (owned by Al Nahayan) which is how the investment came about.”
“This round of funding is testament to the massive upsurge in the demand for Inov8 products and services across the region, which has been phenomenal over the last 18 months,” he said.
Meanwhile, co-founder and president, Bashir Sheikh said,”We will be utilising our funds for our growth across the Middle East and Africa region with an expectation to raise a much larger Series B round in the near future. We will be looking to grow organically and via acquisition, for businesses, products and teams.”
ommenting on the future goals of the company, Hasnain said there is one simple goal, adding that “the company aims to become the number one mobile payments company in the world by 2020.”
“Inov8 has been working to grow the mobile payments industry in Pakistan since 2004. Today we have one of the largest offerings of products and services as well as one of the biggest client portfolios in the region,” he said earlier.
With Sheikh Nahayan Mabarak being the sole investor in the company, Inov8′s headquarters have moved to the UAE, while maintaining some of its presence in the UK.
The region’s leading mobile commerce and payments provider has partnered with a leading aggregator operating in North America and the region, Monami, to offer internet payments in Pakistan. The funding received, along with the post money valuation should pave way for further investment in the country’s burgeoning technology industry.
This is the first time that leading names including Google Play Store, Apple, AppStore, iTunes and Skype, among 50 others, are being made available locally to Pakistani consumers; under this large portfolio of investments.
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".
http://www.warc.com/LatestNews/News/Pakistan_ecommerce_growing_up.news?ID=35892
Like consumers around the globe, Indians are flocking to the online marketplace in droves these days. But there's one unusual item flying off the virtual shelves: Online retailers say cow dung patties are selling like hot cakes.
The patties -- cow poop mixed with hay and dried in the sun, made mainly by women in rural areas and used to fuel fires -- have long been available in India's villages. But online retailers including Amazon and eBay are now reaching out to the country's ever-increasing urban population, feeding into the desire of older city folks to harken back to their childhood in the village.
Some retailers say they're offering discounts for large orders. Some customers are asking for gift wrapping.
"Cow dung cakes have been listed by multiple sellers on our platform since October and we have received several customer orders" since then, said Madhavi Kochar, an Amazon India spokeswoman.
The orders come mostly from cities where it would be difficult to buy dung cakes, she said.
In India, where Hindus have long worshipped cows as sacred, cow dung cakes have been used for centuries for fires, whether for heating, cooking or Hindu rituals. Across rural India, piles of drying cow dung are ubiquitous.
Radhika Agarwal of ShopClues, a major online retailer in India, said demand for the cow dung cakes spiked during the recent Diwali festival season, a time when Hindus conduct prayer ceremonies at their homes, factories and offices. On a recent day, ShopClues' website showed that the patties had sold out.
"Around Diwali, when people do a lot of pujas in their homes and workplaces, there is a lot of demand for cow dung cakes," said Agarwal, referring to rituals performed during the popular festival.
"Increasingly, in the cold weather, people are keeping themselves warm by lighting fires" at outdoor events, she said, adding that people who grew up in rural areas find the peaty smell of dung fires pleasant.
"It reminds them of the old days," she said.
Online retailers said people were also buying the dung cakes to light fires for ritual ceremonies to mark the beginning of the new year and for the winter festival known as Lohri, celebrated in northern India.
The cakes are sold in packages that contain two to eight pieces weighing 200 grams (7 ounces) each. Prices range from 100 to 400 rupees ($1.50 to $6) per package.
Dung cakes are also used as organic manure, and some sellers are marketing them for use in kitchen gardens.
Smartphones with internet connectivity are deployed to solve some of the inherent problems related to the conventional auto trade. For example, buying a used car from a dealer meant several visits to find the right car or sifting through hundreds of newspaper classifieds, with limited information and no pictures. With online portals, people can sift through tens of thousands of cars listed for sale across Pakistan, look at pictures and then decide which ones they want to investigate further.
Similarly, sellers faced challenges with the traditional system because they either had to leave their car at the dealer’s for a long period of time or sell it to the dealer instantly at a price lower than the market value. With online services, they can now list their cars and wait until they find a buyer willing to offer the right price.
Plenty of auto related services such as classifieds, car brokerage, dealerships and sales are quickly moving online to websites such as Apni Gari, Carmudi, OLX, PakWheels, Sasti Gari and countless others.
According to World Bank data, there are three million cars on the road in Pakistan today. This number is increasing rapidly as more than 170,000 new cars are sold every year and about 35,000 to 40,000 cars are imported every year as well. Yet these numbers pale in comparison to other developing countries, given that the car ownership per capita in Pakistan is very low.
There is already a trade of about 750,000 used cars taking place every year in Pakistan and more than 50% of this used car inventory has already come online through auto buying/selling portals. Given that trade is moving online, used car dealerships have realised the power of the internet and according to the All Pakistan Motor Dealers Association (APDMA), 4,500 dealerships in Pakistan are putting all of their inventory online on auto sites and other mediums like their own websites, social media, etc.
Not only has the car trade moved online, so has the research part, whereby people decide what to buy. Rather than relying on an auto expert, a relative or a friend, anyone can go online, find out the pros and cons of the different makes and decide what to buy. In a study conducted by Nielsen, Pakistanis spend about three weeks deciding on what their next car will be and the majority of this time is spent online thanks to the abundance of information.
Services such as car financing and maintenance have also moved online. With over 10 banks offering car financing, the internet is an excellent means for people to compare rates and terms and conditions. In terms of maintenance, services such as AutoGenie allow people to book an appointment with an experienced mechanic who will come to their home and make the necessary repairs. Similarly, Insta Lube, a service launched by Total this April, enables people to call a helpline to have their automobile’s oil changed at their home.
While all the above feels like disruption in the traditional way of doing things, in my view we are only just getting started in Pakistan and all the businesses that are disrupting today will be disrupted in turn unless they innovate. In more mature markets like the US, used car sales are even more disrupted and are almost like buying diapers on Amazon.
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So imagine being driven around in driverless cars owned by Uber! Disrupt or be disrupted!
http://aurora.dawn.com/news/1141310
http://www.euronews.com/2016/05/18/e-commerce-booming-in-pakistan/
Inside the small manufacturing unit of Sam’s Cake Factory, employees are busy baking cakes and producing other gourmet delights.
Sam’s Cake Factory has experienced huge growth since it was launched a few years ago by Sumaira Waseem, a housewife who wanted an outlet for her talents.
“We started Sam’s Cake Factory through Facebook four years ago,” explained Sumaira Waseem. “Back then, I did all the work myself. We used to make around four cakes weekly, but now we get orders for around 50 cakes per week. All our marketing is done through Facebook and our website.”
The success of this project has been achieved through e-commerce.
This trading system offers Pakistani women the opportunity to start businesses without the constraints they may have previously encountered in a conservative society.
Sheops is a marketplace website for women, founded by Nadia Patel Gangjee.
“Sheops is enabling women to sell online using technology,” she said. “And reach out to a much bigger audience. We started off with a group of five women and now we are community of over 26,000 and growing daily.”
With more and more Pakistanis now online and reaping the benefits of online shopping, the growth of
e-commerce looks set to continue and to open up more business opportunities for women living in Pakistan.
The 2014 Pakistan Startup Report insisted it was the right time to build startups and invest in entrepreneurs. Even some of the estimated 12,500 Pakistanis in Silicon Valley were returning home to float their own ventures. The report concluded, “Pakistan will grow, the only uncertainty is the speed at which it does.”
Well, one sector where rapid growth has become a certainty is e-commerce.
Yusuf Hussain, Director of the Islamabad Founder Institute, believes multiple factors are converging to create the right condition for e-commerce in Pakistan — the tech-savvy middle class now numbers around 100 million; investments in the tech sector grew an impressive 800 per cent YoY in 2015, spurred by improved security environment and an expanding tech ecosystem; and buying online is becoming easier with the emergence of mobile payment platforms like Easypaisa, Innov8, and Finja.
“Funding is critical for investment-hungry e-commerce,” Hussain tells GN Focus. “Also, there is greater focus on product and service quality and reliability, with growing competition and the emergence of ratings sites like JustPrice.pk.”
Of mobile payment platforms, he says, “With growing maturity, they are poised to make inroads into the cash on delivery models and expand the pie.”
Jamil Goheer, Co-founder of Virtual Force, which provides technology platforms to startups, attributes the impressive rise of e-commerce to massive infrastructure development, GDP growth, strategic geolocation, the China-Pakistan Economic Corridor and technology upgrades. “Businesses are reaching out to their consumers over various digital platforms and advocating for economic activity over the Internet due to lower costs,” he says.
He says a survey they conducted recently reveals apparel and fashion are the booming sectors, with almost all major brands selling their products online. The electronics, food, beauty, footwear and furniture categories are also picking up steam online.
Game changer
Moeez Javed, founder of online fashion store Virgin Teez, says e-commerce has progressed at an “astonishing speed” and has been “profoundly impacted” by the rise of social networks in Pakistan. He estimates more than 1,000 brands are going online every month, and the pace is only picking up. “Some 73.2 per cent of the entire population now has access to mobile phones, and smartphone users recently surged to 9 million. These internet-enabled smartphones have dramatically increased the ease of internet access and made online businesses much more accessible for all.”
The introduction of 3G/4G services in 2014 was a game-changer, says Arzish Azam, founder and CEO of Just Price, taking Internet penetration from 10.9 in 2013 to 13.8 in 2014. He estimates Pakistan currently has more than 2,000 online stores.
Dr Umar Saif, Founder of Plan9, Pakistan’s largest technology incubator, agrees, highlighting the importance of younger users in urban areas.
Research by the shopping portal Kaymu.pk shows that people aged 25-34 account for the highest number of e-commerce user
https://tribune.com.pk/story/1384831/hong-kong-firm-move-rd-department-pakistan/
LAHORE: Octo3, a Hong Kong-based financial technology company, has announced to move its entire Research and Development (R&D) wing to Pakistan.
The company, which specialises in development and provision of modern payment and other transactional solutions, further announced that it will invest in the Pakistani market in order to transform its ICT landscape.
The announcements were made based on the robust developments in Pakistan’s Information Technology sector and a rising need of digital payment solutions due to the growing e-commerce segment in the country.
“We have decided to shift our entire R&D department and other core function to Pakistan from Hong Kong as the country offers a lot of talent in the IT sector,” said Group’s Chief Executive Officer Tyrone Lynch.
“Few years ago, we outsourced our R&D wing to India, but after working a while we realised that things didn’t work as per our expectation, and we once again moved back to Hong Kong.
“After analysing the Pakistani market and the rapid developments and upcoming scope of ICT and digital payment solutions, on the back of China-Pakistan Economic Corridor (CPEC), we decided to shift our R&D wing to Pakistan,” Lynch added.
The company, which started its operations in 2009, has its presence in Hong Kong, Singapore, Bangkok and now Pakistan with its clientele expanding in almost entire modern economies.
Since its founding chairman is a Pakistani, it aims to add a lot of value in CPEC-related and other projects by building database centres and other such ICT infrastructure both with government as well as with private and multinational companies.
The management is already in talks with local banks and financial institutions for provision of backend support to locally available payment solutions, which can be accepted globally as well.
“We are a solution provider company but in Pakistan we will work both on ICT as well as digital payment solutions,” said Ajmal Samuel, ,hairman and Co-founder Octo3 Group Holdings Limited while talking with The Express Tribune.
“I have access to foreign players who are willing to invest in emerging economies, however, due to the negative perception of the country they hesitate to visit,” he added.
Talking about payment solutions, Samuel said that existing players offering different wallets have already paved their way and have established the market and “the next step for us is how we can transfer this existing customer base and wallets to e-commerce payment solutions, which can simultaneously be accepted in global markets”.
“The e-commerce growth is so huge in Pakistan that some global players like Amazon have asked us whether our company can provide any digital payment solutions from Pakistan,” he claimed.
https://tribune.com.pk/story/1394016/bricks-bytes-impressive-growth-e-commerce-pakistan/
Every minute, 26 Pakistanis access the internet for the first time. By 2020, more than 65 million of them will be using 3G and 4G/LTE on their phones. There will also be 163 million mobile subscribers by then – roughly 89 per cent of the population of Pakistan. Add to this mix the fact that around 60 per cent of our population is below 30 and the rising trend of start-up businesses in Pakistan – and it’s clear that Pakistan has a bright future online.
E-commerce in Pakistan has had a slow start and is still finding its legs but pushed by 3G and 4G/LTE, it is set to cross $1 billion by 2020. This may seem quite low, given that the country’s overall retail market is worth $152 billion but Pakistan’s e-commerce is not faltering. Take the example of Black Friday 2016; it was a massive success for almost every participating e-retailer in Pakistan. Adam Dawood, head of Yayvo.com, agrees with the assessment. “There have been massive strides in e-commerce in the last two years, especially in the online retail market sector. Yayvo has exceeded its revenues of the previous year in the first five months of this financial year,” he says.
Pakistan’s explosive online growth has not gone unnoticed. This year on the sidelines of the World Economic Forum in Davos, Alibaba Group chairperson Jack Ma met with Prime Minister Nawaz Sharif to express his interest in investing in Pakistan’s e-commerce sector. Barely two months later, a delegation from Alibaba landed in Islamabad and held meetings with Finance Minister Ishaq Dar and other officials. Just last week, a delegation headed by Alibaba President and Director Michael Evans met with PM Sharif.
Farees Shah, the general manager of video-on-demand service iflix, says there are very few countries in the world which have as impressive figures of internet growth as Pakistan does. “Pakistan is one of the fastest growing markets in the world and the 3G and 4G technologies are playing a significant role in that. Right now, depending on who you ask, there are roughly about 37 million mobile broadband users in Pakistan. We are adding a million 3G and 4G users every month for the last 3 years,” he shares.
https://www.dawn.com/news/1281787
Foodpanda, Pakistan’s leading food delivery app, estimates that it has generated a staggering one billion rupees in additional sales for the restaurant industry in the last 12 months.
Along with growing adaptation of online service offerings in Pakistan, Foodpanda has accelerated the switch from offline food ordering to online ordering through its website and mobile app, benefiting both its customers and restaurant partners.
Nauman Sikandar, CEO of foodpanda Pakistan notes:
"Over the last three years we have helped customers to realise that they can spend their valuable time pursuing what they love, rather than preparing food at home. We have partnered with thousands of professional chefs at restaurants who prepare the most delicious meals of your choice for you, along with the convenience of having it delivered right to your doorstep."
He further adds:
“I am a foodie at heart and order from my favorite restaurants almost every day.I used to make tons of telephone calls each month to restaurants and the overall process was extremely painful! Finding the correct telephone number, reading out my order from a leaflet, communicating my address, and then the frustrating moment when I realise that they misunderstood my order through the phone."
"With Foodpanda, you simply log on to our app, select or discover your favourite restaurant and place your order with a few clicks. The app remembers all your details, so you only enter them the first time. Now I can place an order at my favorite restaurant within 30 seconds."
Foodpanda estimates over 7500+ restaurants established all across Pakistan, which it aims to add to its portfolio over the next few years.
Last year, the company grew its restaurant inventory to over 1,000 restaurants which is a 360 per cent increase compared to the previous 12 months.
Next to the local neighbourhood favourites, Foodpanda signed partnerships with national restaurant chains, such as Nando’s, McDonald’s, Sarpino’s and Ginsoy.
Over the last few years, Foodpanda has accelerated the growth of the food delivery market to around 20pc year on year, compared to original growth levels of around 7pc.
Raza Pirbhai, CEO of KFC remarks, "Foodpanda as a concept has taken Pakistanis into the future, not only from the customer point of view but also from the business end. With delivery being the fastest growing channel, KFC Pakistan has seen a rapid growth pattern in its online sales which is doubling over time."
"Together with foodpanda we plan to take KFC to every household in Pakistan over the next few months."
The figures in the following infographic represent Pakistan’s enriched and rapidly growing food ordering market and shows that foodpanda is the pioneer leading explosive growth and improvements in the industry.
https://www.dawn.com/news/1333495
Pakistan on Tuesday signed a Memorandum of Understanding with Alibaba Group Holdings Limited to promote Pakistan's worldwide exports by Small and Medium Enterprises (SMEs) through e-commerce.
Alibaba Group's Executive Chairman, Jack Ma and Prime Minister Nawaz Sharif witnessed the signing ceremony.
Speaking at the headquarters of the e-commerce giant, the prime minister appreciated the success and performance of the Alibaba group.
"I am glad my meeting with Jack Ma at the World Economic Forum in January has come to fruition in the shape of the MoU we have just signed," the premier said.
"My appreciation of Ma's dynamism and performance of [the Alibaba] group comes not only from its success as a e-commerce giant but more so from the focus of the group on job creation and livelihood generation," he added.
"Indeed, the Alibaba group is a business with strong humanistic dimension. These are the values that are the pivot of the policies my government has pursued with determination and commitment since taking office in 2013."
"E-commerce is a powerful tool to stimulate economic activity, effort, innovation and entrepreneurship across all sectors of the economy," the prime minister added.
"When Jack Ma shared with me his interest in establishing an e-platform in Pakistan, i instructed my office to facilitate Alibaba's initiative in every manner and in the shortest possilbe time frame," he the prime minister said, adding that the MoU had been signed within four months of when the initiative was first conceived.
The agreement between Alibaba and Trade Development Authority of Pakistan (TDAP) was signed by Commerce Minister Khurram Dastgir and Michael Evans, President of Alibaba Group, and Douglas Feagin, Senior Vice President of Global Business of Ant Financial, on behalf of Alibaba, during the visit of Prime Minister Muhammad Nawaz Sharif to the headquarters of the company.
Explore: PM Sharif, Alibaba president discuss e-commerce giant's prospects in Pakistan
Under the terms of the MoU, Alibaba, Ant Financial, and TDAP agreed to foster growth of worldwide exports of products by small and medium sized enterprises (SMEs) in Pakistan through e-commerce.
Online and offline training programs for the SMEs would also be conducted by Alibaba in a bid to assist SMEs with on-boarding on to Alibaba's platforms and optimizing exports through e-commerce.
TDAP will help identify suitable SMEs to participate in the training programs while Alibaba will be responsible for providing industry analysis to TDAP to assist them in their selection process.
In addition, Alibaba, Ant Financial and TDAP have agreed to promote the growth of financial services in Pakistan in areas such as mobile and online payment services.
The parties have also agreed to adopt cloud computing services to support the online and mobile e-commerce businesses of SMEs in Pakistan.
The Alibaba group has in recent years been aggressively courting foreign brands to set up Tmall stores to sell to China's vast and growing middle class by offering to smoothen out Chinese sales, payment and shipping processes.
http://www.thehindu.com/news/international/alibaba-inks-deal-with-pakistan-to-promote-exports/article18465694.ece
Pakistan today signed a deal with Chinese tech giant Alibaba to promote the export of products by small and medium enterprises through its e-commerce platform globally.
Online and offline training programmes for the Small and Medium Enterprises (SMEs) would also be conducted by Alibaba in a bid to assist them with the company’s platforms.
A Memorandum of Understanding (MoU) between Alibaba and Trade Development Authority of Pakistan (TDAP) was signed by Commerce Minister Khurram Dastgir and President of Alibaba Group Michael Evans and Douglas Feagin, Senior Vice President of Global Business of Ant Financial.
The development occurred during Prime Minister Nawaz Sharif’s visit to the company’s headquarters in China, where Mr. Sharif with Alibaba Group’s Executive Chairman Jack Ma witnessed the signing ceremony, the Associated Press of Pakistan reported.
Alibaba, Ant Financial and TDAP agreed to foster growth of worldwide export of products by SMEs in Pakistan through e-commerce.
TDAP will help identify suitable SMEs to participate in the training programmes while Alibaba will be responsible for providing industry analysis to TDAP to assist them in their selection process.
In addition, Alibaba, Ant Financial and TDAP have also agreed to promote the growth of financial services in Pakistan in areas such as mobile and online payment services.
The parties have agreed to adopt cloud computing services to support the online and mobile e-commerce businesses of SMEs in the country.
http://www.thehindu.com/news/international/alibaba-inks-deal-with-pakistan-to-promote-exports/article18465694.ece
Minister of Information and Technology Anusha Rehman has today announced that Alipay will be working in Pakistan very soon. She was speaking at the National Competition of Final Year Projects at Islamabad. The event was organized by National ICT R&D Fund.
While speaking with the winners and participants of the event at the closing ceremony, Anusha Rehman reiterated the mission of Pakistan’s Government to connect the unconnected population of Pakistan with Internet and technology. She mentioned that Prime Minister of Pakistan has recently signed a MoU with Alibaba, the ecommerce giant of China. She added that Alipay, another venture of Alibaba, for online payments will soon be available in Pakistan.
For the uninitiated, Alipay is a third-party online payment solution. The platform has the biggest share in China’s market and most of the online payments in China are processed by Alipay.
Alipay is a venture of AliBaba Group which means that the recent collaboration between Government and AliBaba will finally pave the way for an online payment platform in Pakistan.
An online payment solution will mean huge growth and transactions influx in the ecommerce industry of Pakistan. Previously, Anusha Rehman has been quoted as saying that the government is working hard to bring Paypal and Amazon to the country but nothing could materialize on that end.
With the ever growing friendship between Pakistan and China, it seems that if not Paypal, Alipay will be available in the country very soon.
https://tribune.com.pk/story/1420372/pakistan-launch-state-art-e-payment-gateway/
Finance Minister Ishaq Dar announced on Friday that Pakistan would open international electronic payment gateways ahead of the likely arrival of PayPal and Alipay in the country.
While presenting the budget for 2017-18 in the National Assembly, the finance minister said the State Bank of Pakistan (SBP) was developing a state-of-the-art e-gateway at a cost of Rs200 million.
“The system will facilitate transactions through mobile banking,” he said. “The Rs200-million investment is being undertaken by the SBP.”
Even though PayPal is a world-renowned international e-payment system, Alipay is not as common across the globe. However, recently, Prime Minister Nawaz Sharif developed an understanding with Alibaba Group Founder and Executive Chairman Jack Ma, who also owns Alipay, to open its office in Pakistan. Alipay will enable Chinese and Pakistani traders to make easy e-payments between the two countries.
Meanwhile, information and communications technology expert Parvez Iftikhar said the establishment of the e-gateway system at the highest regulatory level – the SBP – was an effort towards replacing the existing manual trade payment system by opening Letters of Credit.
Digital Pakistan
The finance minister said the telecommunication sector was one of the important pillars of the country’s economic development. Hence, in order to further incentivise the sector, customs duties at the rates of 11% and 16% were being withdrawn and a uniform rate of 9% regulatory duty was being levied on telecom equipment in the coming fiscal year.
Additionally, Dar said start-up software houses would be exempted from income tax for the first three years. Similarly, exports of information technology (IT) services from Islamabad and other federal territories will be exempted from sales tax.
Mobile phone industry – another important element in the IT sector – received a further relief as withholding income tax on mobile calls was reduced from 14% to 12.5% and federal excise duty was reduced from 18.5% to 17%.
“We hope that provincial governments will also reduce the rate of sales tax on mobile industry,” he said. “In order to encourage the use of smartphones, the customs duty will be reduced from Rs1,000 to Rs650.”
Iftikhar commended the incentives and tax relief for the IT sector, which were meant to enable industrial players to invest more in the sector. “Digitalising Pakistan is the way forward. This is how we will cope with the developed countries,” he said.
Nevertheless, he added more could have been done to achieve a faster growth in the sector. “Reduction of withholding tax on phone calls and duty on smartphones is an encouraging development. However, calls and phones should have been made tax-free in the larger interest of digitalising the economy.”
Branchless banking
Dar announced exemption from withholding tax on cash withdrawals by branchless banking agents.
The move has been undertaken to realise the government’s dream of providing 50% adult population of Pakistan access to banks under its Financial Inclusion Strategy 2020. At present, 25% adult population has access to formal banking channels.
E-commerce and IT need to watch out for the budget
Iftikhar said the exemption from withholding tax on cash withdrawals under branchless banking would enable the government to document the economy, which would be one of the great efforts towards minimising the size of undocumented economy.
“Progress in almost every sector of the economy – like banking, agriculture, education, health and governance – is now linked with adoption of telecommunication,” he said.
Meanwhile, Jazz Director Communications Anjum Rahman said the government was supporting the agenda of ‘Digital Pakistan’, which was in line with the company’s vision and aspirations.
https://en.dailypakistan.com.pk/technology/simsim-pakistans-first-free-mobile-wallet-gets-sbp-approval/
LAHORE – Pakistan’s first free mobile wallet, SimSim, has received regulatory approval from the State Bank of Pakistan.
The approval was granted, earlier this month, under the Branchless Banking Regulation framework formulated by SBP.
SimSim is collaboration between FINCA Microfinance Bank Limited and FINJA Pvt. Limited. This is the first time a bank and a fintech, acting as the super-agent of the bank, have partnered to create a digital financial product.
“SimSim’s pioneering instant mobile account will go a long way in boosting financial inclusion in the country and digitising the economy,” stated Mudassar Aqil, CEO of FINCA Microfinance Bank Limited.
Discussing future plans for SimSim, Qasif Shahid, CEO of FINJA, said that SimSim is not simply a product or an app, rather it is a movement to free digital commerce in Pakistan.
Monis Rahman, tech veteran and co-founder of FINJA, added that the ease of becoming part of the SimSim network positions it as a platform, which users can spread and grow without any friction.
SimSim successfully completed a beta pilot prior to the formal approval from SBP, and recorded PKR 600 Million in transactions, 30,000 in self-registered mobile wallet accounts and a retail network of 500 participating merchants.
The mobile wallet is a highly innovative, automated process which relies on NADRA integration and machine learning. Anyone with a valid CNIC can create a SimSim branchless bank account, in under one minute, using their internet-enabled mobile phones.
SimSim is connected to other banks through 1-Link for instant transfers, while ATM cards are available for cash withdrawals. Payments through SimSim are free for the receiving and sending users with their mobile numbers acting as bank account numbers.
To be a part of the SimSim network, all anyone has to do is download the app from the Apple App Store or Google Play Store and set up their wallet.
FINCA Microfinance Bank
FINCA, one of the fastest growing microfinance bank with a global presence in 21 countries and a network of 105 branches in 94 cities across Pakistan. It is the pioneer microfinance bank in Pakistan which truly introduced the first complete digital mobile wallet – SIMSIM.
For Sana Safinaz, Pakistan’s leading fashion brand, March is the start of the summer season, and the fashion industry’s hectic ‘lawn season.’ According to the Hindustan Times: “Lawn is the name Pakistanis use to refer to the brightly colored cotton fabric sold in stitched and unstitched form in a myriad of hues, to an eager set of buyers who will sometimes go to great lengths to get their favourite suit pieces.” During this peak season, shopping malls are overwhelmed with customers. “Compared to normal trading days at our brick and mortar stores, the footfall during collection launches increases 600 percent,” reveals Sana Safinaz’s Haris Ahmed, their Head of Retail Business. You can only imagine the impact of traffic on the brand’s website.
“Our website goes crazy,” says Moeed Ahmed of the Sana Safinaz Digital Business team. “Brand collection launches during the lawn season are met with an abnormal spike in traffic,” adds Tariq Siddiqui, the brand’s Manager of Digital Business. “Across the whole industry it’s rare to find a site that has the infrastructure to successfully handle a surge without affecting customer experience.” Adding to their traffic is the company’s regular investment in highly-optimized Google search/adwords campaigns, that generates almost 35 percent of their total traffic. With the spotlight on Sana Safinaz this summer season, and the eCommerce business becoming a high percentage of the company’s total inventory, their site had to perform. Oh, and they only had a month before launch. Naturally, they chose Magento Commerce.
Sana Safinaz got to work straight away with their local development partner, Webwork Solution (Pvt.) Ltd. They chose Magento Commerce (formerly Magento Enterprise Cloud Edition), so they would never have to worry about servers and traffic spikes again. They also wanted to beat their competition by capitalizing on the rich core functionalities of Magento Commerce, and its highly effective marketing/segmentation modules. The team broke the project into two phases: Phase one included the “must have” features like order fulfillment and integration with their Point of Sale system. Phase two focused on additional capabilities like social media extensions to generate additional sales through social platforms, along with other site feature deployments.
With Magento, the Sana Safinaz team spent their time improving site structure and user experience, rather than panicking about IT and site crashes. With a cloud solution built on AWS, they knew their new Magento Commerce site could handle the crazy traffic that was about to hit.
The moment of truth arrived on March 3, 2017. Across Pakistan, the lawn season had begun, and millions of Pakistani women were hustling to buy their ultimate summer outfit. The Sana Safinaz site went live, and on the first day it processed more than 5,000 orders. Before Magento Commerce, the most orders ever processed on a single day was 1,000. As page views increased by 87 percent, their customers were raving on social media: “We were able to place orders so smoothly,” wrote one customer, “Never had this with other brands.”
Published in Sep-Oct 2017
By Nabeel A. Qadeer
The pros and cons of Alibaba’s entry into Pakistan.
http://aurora.dawn.com/news/1142379
Pakistan’s IT industry has massive growth potential and even greater investment prospects. In light of this, e-commerce giant Alibaba, one of the world’s largest online retailers, with a total market value of $380 billion, has recently signed an MoU with our Ministry of Commerce. This development is aimed at promoting exports from SMEs and may potentially lead to an investment of approximately $400 million in Pakistan’s e-commerce sector – investment at the moment stands at well north of $120 million. Furthermore, this agreement entails the provision of training for SMEs with respect to using e-commerce platforms, along with promoting mobile financial services and online payment services.
On the face of it, Alibaba’s entry seems full of benefits. However, it would be wise to consider both the potential benefits, as well as the drawbacks which may arise as a result of the company’s entry into Pakistan.
We know that investors often label Pakistan as unsafe for investment purposes and for a long time no major e-commerce company has dared to set foot in Pakistan. However, there has been a drastic change in this perception. Large e-commerce portals, such as PakWheels.com, Zameen.com and Rozee.pk have changed the landscape of the e-commerce industry. This change may be rightly attributed to the emergence of 3G and 4G, which constitute 90% of Pakistan’s broadband base. With the entry of Alibaba, other tech giants will follow, with the result that SME exports will be encouraged, an issue which was previously not addressed.
The promotion of the SME sector will have a trickledown effect that will spearhead the development of local manufacturing. In addition to this, an investment of $400 million will prove to be beneficial to the e-commerce sector. Foreign competition will lead to better standards in this sector and force local e-commerce companies such as Daraz.pk and Homeshopping.pk to become more efficient or risk being wiped out. Consequently, not only more jobs will be generated, but HR and relevant skill-sets will also be developed. Alibaba’s partnerships with local vendors could also boost the economy. Good examples here are Careem and Uber; owing to their success, many local start-ups have done well – many have worked on the same model and brought motorbikes and rickshaws to similar businesses. Thanks to these developments, Pakistan’s GDP grew by 5.3% – a 10-year high, and according to Ishaq Dar, the former Federal Finance Minister, for the first time the size of the economy surpassed $300 billion.
However, there is a negative side to this. As a foreign firm with resources equivalent to that of the world’s 22nd largest economy, the entry of Alibaba poses major threats to the e-commerce industry. Firstly, there is the possibility of the monopolisation of the e-commerce industry, as local players will not have the means to compete with Alibaba’s resources and as a result, some of these ventures may die out. This fear is even more realistic when seen in the light of Alibaba’s track record of acquiring local businesses. Furthermore, the presence of the Alibaba platform could potentially increase the dumping of Chinese goods in the market. As a result, local manufacturers will be unable to match the low prices Chinese manufacturers offer. More importantly, the Alibaba Group has been influencing China’s economic and foreign policies, something which may also happen in Pakistan.
https://www.bloomberg.com/news/articles/2018-03-20/alibaba-is-said-to-mull-buying-rocket-internet-s-pakistan-unit
Group entered Pakistan last week with microfinance bank stake
Nation’s e-commerce, retail stores growing: Euromonitor
Alibaba Group Holding Ltd. is considering acquiring Rocket Internet’s online retail unit in Pakistan to help China’s biggest e-commerce company expand its reach in the South Asian, a person with knowledge of the matter said.
The companies are negotiating a price for Rocket’s retail unit Daraz, according to the person, who asked not to be identified since the discussions are private. The deliberations are an early state and no decisions have been made, the person said. Alibaba’s spokesman declined to comment, while Daraz didn’t immediately respond to requests for comment.
The development comes after Alibaba’s Ant Financial decided to purchase a 45 percent stake in Telenor Microfinance Bank, a subsidiary of Telenor Group, for $184.5 million last week to further develop mobile payment and digital financial services in the nation of more than 200 million people. Elsewhere in Asia, Alibaba is gearing up for an intense battle in Singapore, where Amazon.com Inc. has started operations and Sea Ltd.’s Shopee is expanding to win consumers.
Pakistan’s burgeoning youth has turned the nation into the world’s fastest growing retail market with stores and e-commerce both growing together, bucking the trend in many developing nations. Pakistan’s market may expand 8.2 percent a year through 2016-2021 as disposable income rises, according to research group Euromonitor International.
Pakistan has 30 million active Internet users, and brands are redoubling their attention to e-commerce, Daraz said in a statement last month. Alibaba’s interest in Pakistan comes on the back of Beijing’s financing of about $60 billion in infrastructure projects across the country as part of President Xi Jinping’s Belt and Road trade initiative.
--------------------------
http://www.euromonitor.com/non-store-retailing-in-pakistan/report
TRENDS
The accessibility of the internet to the growing number of young and urban consumers resulted in an internet retailing boom. The rapid growth in mobile internet usage and increased awareness of internet retailing encouraged multiple internet retailers to enter, which resulted in a sizeable increase in e-commerce.
COMPETITIVE LANDSCAPE
Jade-E-Services Pakistan Pvt Ltd (Daraz.pk) led non-store retailing channel with 13% of value sales in 2016. The first ever online Black Friday Sale SAS by daraz.pk in November 2015 was a major success with record-breaking sales. Daraz.pk also established successful partnerships with some renowned international brands and earned exclusive distribution rights. All this, along with impactful marketing campaigns, huge product assortments and good customer service resulted in massive growth for daraz.pk.
PROSPECTS
A fast-growing young population and a rise in the number of middle class consumers coupled with high penetration of low-cost smartphones from China and rapid growth in broadband and mobile internet use will be the main driving forces of non-store retailing in the long term. The increasing confidence of consumers in online shopping will continue the rapid transformation of consumer buying habits which, along with easy access to the internet, will continue to grow non-store retailing in Pakistan.
#Alibaba's entry in #Pakistan hailed as boost for #DigitalEconomy. Experts predict #Islamabad likely to lower high taxes after #Chinese e-retailer's investment. #ecommerce #fintech #Daraz #AliPay #Telenor #Telecom #payments
https://asia.nikkei.com/Business/Companies/Alibaba-s-entry-in-Pakistan-hailed-as-boost-for-digital-economy
KARACHI -- Alibaba Group Holding's recent purchase of a Pakistan-based online retailer has positioned the Chinese technology conglomerate to make inroads in e-commerce across South Asia, but the acquisition has raised expectations of robust growth in an industry that many experts say performs well below its potential.
Gaps such as the absence of a global online payments system can now be filled through Alibaba's Alipay service, said Shuja Rizvi, a Karachi based senior stock market analyst at Al-Hoqani Securities. "With the entry of a major player like Alibaba, Pakistan's policies will be molded to face global competition and our environment will hopefully improve," Rizvi said in an interview with the Nikkei Asian Review, citing one of the most commonly discussed benefits of Alibaba's arrival in the country.
Alibaba announced earlier this month a deal to buy Daraz Group, a Pakistani digital marketplace company, for an undisclosed amount. Since it was founded in 2012, Daraz has steadily expanded its services to Myanmar, Bangladesh, Sri Lanka and Nepal, say analysts who regularly track the e-commerce sector.
The acquisition comes as Pakistan prepares to receive more than $60 billion in Chinese investment under the China-Pakistan Economic Corridor -- a cornerstone of Chinese President Xi Jinping's Belt and Road Initiative. Alibaba's arrival in Pakistan also has been preceded by significant growth in cellular phone services and high-speed internet across the country in recent years, analysts say.
According to the Pakistan Telecommunication Authority, or PTA, the official regulator of the telecom sector, more than 73% of Pakistan's population, or roughly 149 million people, have cellular phone subscriptions. Especially important for the growth of digital businesses is the estimate of 56 million people, or more than 27% of the population, who subscribe to broadband services -- a key figure indicating the number of internet users, many of whom will be potential future online customers.
"Today, the number of internet users in Pakistan are more than the entire population of many countries around the world," a senior official with the Ministry of Information Technology and Telecommunication in Islamabad who requested anonymity because he was not allowed to speak to journalists, told Nikkei. "For investors like Alibaba, there is fertile ground for a strong future expansion."
Other PTA officials said that online retail businesses in Pakistan have much room to grow as they have an advantage over traditional retail outlets that have to invest heavily in commercial real estate to sell their products to consumers.
"In the most prized commercial markets of Pakistan -- in big cities like Karachi, Lahore or Islamabad -- rents have more than doubled for the top-end premises just in the last 10 years," said the Ministry of Information Technology official. "And the overhead costs -- especially rents -- continue to rise."
Barkan Saeed, chairman of the Pakistan Software Houses Association, the main representative body of the country's software industry, welcomed Alibaba's purchase of Daraz and entry into the country "as a major milestone" for Pakistan's e-commerce sector. Saeed said that while the government estimates the annual value of e-commerce transactions in Pakistan at approximately $600million, the actual figure could be five times that amount.
#Amazon, #Flipkart have till end of Jan to comply with new restrictions, that sharply restrict the use of their hefty balance sheets to boost sales on their websites. #FDI https://www.ft.com/content/6dd8188a-14c2-11e9-a581-4ff78404524e via @financialtimes
Saifuddin Bhanpurawala is one of dozens of shopkeepers on a dusty Mumbai back street that bustles with customers buying everything from tobacco to perfume.
But Mr Bhanpurawala’s mobile phone shop is going through hard times, selling as few as two handsets in a bad week. He says the reason is obvious: the huge discounts available online at Amazon and Walmart-owned Flipkart, the two biggest players in India’s fast-growing ecommerce sector.
“If we sell something at Rs5,000 [$70], they might sell it at Rs2,500 — we don’t understand how it’s possible,” said Mr Bhanpurawala, 28. He argued that the Indian government’s tolerance of such practices has demonstrated its lack of concern for small businesses: “The rich are getting richer and the poor are getting poorer.”
With a general election just four months away, prime minister Narendra Modi is moving to address such complaints. Amazon and Flipkart have been given until the end of this month to comply with new restrictions, announced in late December, that sharply restrict the use of their hefty balance sheets to boost sales on their virtual marketplaces.
But while the move is intended to strengthen the government’s credentials among India’s millions of small retailers, it has sparked alarm for two of the country’s biggest outside investors. Walmart’s $16bn buyout of Flipkart last year was the biggest foreign direct investment in Indian history, while Amazon has committed $5bn in capital to its Indian operation.
“A sudden change in rules is not helpful,” said Mukesh Aghi, president of the US-India Strategic Partnership Forum, which works to build economic ties between the countries. “It sends a message to groups that the environment is not transparent.”
‘Behave like a marketplace’
When India opened its economy to foreign capital in the 1990s, it was careful to maintain protection for small retailers. Foreign investment was allowed in single-brand but not multi-brand retail — allowing clothing labels, for example, to open stores but keeping out the foreign supermarket chains that were feared by many shopkeepers.
As ecommerce took off, New Delhi updated these rules for the internet age. Foreign-backed companies would be allowed to run virtual “marketplaces” — platforms enabling independent sellers to connect with customers. But they were barred from selling goods themselves, stopping them from functioning as online supermarkets.
The vague wording of the rules, however, meant that Amazon and Flipkart — backed with billions in capital from foreign investors led by US fund Tiger Global — quickly found ways to use their balance sheets to turbo-charge growth, outraging peers in the industry.
“We were flabbergasted all the while at the blatant violations of the FDI policy,” said Sanjay Sethi, chief executive of ShopClues, one of the largest rivals to the dominant duo. “We started doubting ourselves — are we not interpreting these rules correctly?”
Flipkart pursued a different tack. Instead of forming directly controlled sellers, it supplied many of them through a huge wholesale distributor, named Flipkart India. The distributor’s revenue has far outstripped that of the online marketplace entity, while incurring heavy losses.
In the last financial year, Flipkart India made a net loss of $293m on sales of $3bn. That dwarfed the revenue of Flipkart Internet, the marketplace business, which booked sales of $398m, mostly on commissions charged to sellers.
From 2016, Amazon also dramatically increased the scale of its wholesale operation. In the last financial year, that business had revenue of $1.7bn, up from $458,000 two years before.
Pakistan is in the process of registering the country’s goods sellers with US e-commerce giant Amazon and has sent a list of 38 exporters for registration.
The initial list of 38 exporters comprises surgical and sports goods, and home textile sectors and the list will be expanded to other sectors in the near future, after successful trial of the shortlisted companies, announced Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood while chairing second meeting of the National e-Commerce Council on Thursday.
A video message of the World Trade Organisation (WTO) director general, who appreciated Pakistan’s e-commerce policy as a step in the right direction, was also shared with meeting participants. The adviser spoke about the progress made in the recent past on the e-commerce policy, since its approval on October 1, 2019. He appreciated coordinated efforts of public and private sectors for effective implementation of the policy.
Dawood emphasised that the trend of e-commerce had accelerated in recent years with the development and easy accessibility of internet. He added that due to the Covid-19 pandemic, the importance of e-commerce had increased manifold, making it an extremely vital sector of the economy.
He underscored the importance of directing resources towards digital adoption and connecting small and medium enterprises (SMEs) with e-platforms across the globe while exploring new market access opportunities for them.
Sharing progress, a State Bank of Pakistan (SBP) official said the regulatory framework for the facilitation of cross-border B2C (e-commerce) had been developed, which would be adopted after integration with the e-commerce module to be developed by the Federal Board of Revenue (FBR) in the Web-based One Customs (WeBOC) system. Punjab and Khyber-Pakhtunkhwa revenue authorities apprised meeting participants of the incentives being announced for the digital and e-commerce sector in provincial budgets to support it during these challenging circumstances.
Representatives of the Consumer Protection Councils of Punjab and Lahore and of the Consumer Rights Commission of Pakistan informed meeting participants that, in line with the e-commerce policy, the federal and provincial consumer laws were being amended to include e-commerce and the disputes arising from the sector.
They added that webinars were being planned to educate the academia and train judicial officers in consumer protection. Meanwhile, the Securities and Exchange Commission of Pakistan (SECP) revealed that several new initiatives were being planned to promote e-commerce, including a separate sector classification for e-commerce.
So far, 152 businesses have registered on its portal, which has reduced the time required for company registration to four hours.
Speaking on the occasion, the commerce secretary said the Ministry of Commerce was continuously engaged with Pakistan’s foreign trade missions for promoting trade and exploring new markets for exporters. In this regard, a new development is the registration of Pakistani sellers with Amazon.
1. Increase inbound funds transfer limit of $5000 to $25000 for FreeLancers.
2. Government will support Digital TX of Pakistan Post to bring xBorder delivery cost down.
Digital Transformation Pakistan" focused on eCommerce Infrastructure.
https://twitter.com/AhmedWJanjua/status/1274132091194703873?s=20
Sellers get excited! Buyers, don’t warm your credit cards up just yet!
Pakistan has finally bagged a position in the Amazon approved selling countries. Accounts can be made using Pakistani details.
Standing ovation to the efforts of the people behind this incredible achievement, Aisha Moriani (Joint Secretary, Ministry of Commerce), Omer Gajial (Ex Amazon Category Development Head for Amazon North America division), and Shoaib Sarwar (deputy Consul General, Consulate General Pakistan, Los Angeles) along with the team members of NECC (National Ecommerce Council) and Badar Khushnood from Pakistan Software Houses Association, just to name a few.
They have been working day and night in getting Pakistan added in Amazon’s approved sellers list, and their hard work has paid off!
This milestone will drastically change the game and result in a new era of economic growth as more sellers will visit the platform than ever before.
Previously, Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood emphasised that the trend of e-commerce had accelerated in recent years with the development and easy accessibility of internet. He added that due to the Covid-19 pandemic, the importance of e-commerce had increased manifold, making it an extremely vital sector of the economy.
Now that Pakistan has been added to the approved sellers list of Amazon, one can only pray and hope for this to steer in the positive direction for the development of the country!
https://ohionewstime.com/amazon-adds-pakistan-to-the-seller-list-allowing-pakistani-businessmen-to-sell-globally/161621/
E-commerce giant Amazon has added Pakistan to the list of sellers and qualified Pakistani entrepreneurs to sell on the platform, the Commerce Department announced Friday. The ministry said it will give Pakistani manufacturers access to a global e-commerce platform on Amazon, opening up a new chapter in the supply chain that Pakistani manufacturers can sell directly to their customers. “This marks the achievement of the national e-commerce policy milestone, Amazon This listing will enable manufacturers to respond to customer needs, design new products, deliver high quality at competitive prices, and access new market segments.
“It created a great opportunity for Pakistani entrepreneurs,” said Eric Broussard, vice president of Amazon International Seller Services, in a message by connecting to and forming part of a global e-commerce network. I did. As of today, Pakistani entrepreneurs have announced that they are eligible to sell on Amazon. We want to work with Pakistan’s dynamic business community, including small and medium-sized sellers, to help connect with customers around the world. Commerce Advisor Investment Abdul Razak Dawood said the Commerce Department will continue discussions with Amazon’s focus groups to further guide Pakistan’s business community to take full advantage of this opportunity.
He said that to get the most out of it, you need to do a lot of hard work in training, quality assurance, logistics improvements, payment systems, customer relationship management, and more. Pakistan remains off Amazon’s seller list despite its presence in neighboring India, and Pakistani retailers who want to sell their products on the market will have to register themselves from other countries. I will. After being added to the list, Pakistani merchants will be able to easily sell their products on the platform. However, it is reportedly time consuming to take full advantage of it. The Commerce Department initially shared the names of only 38 exporters with Amazon for registration.
https://www.app.com.pk/global/chinese-company-rolls-out-nationwide-logistics-services-in-pakistan/
The Chinese company which has rolled out nationwide logistics services across Pakistan was likely to cover about half of its population in February, Sun Chao, head of Speedaf Pakistan said on Friday.
“Moreover, we also provide China-Pakistan cross-border logistics services and warehouse and delivery services in Pakistan,” he said in an interview with China Economic Net (CEN).
As a leading logistics services provider plowing emerging markets, Speedaf initiated its business layout in Pakistan in September 2021.
Up to now, express delivery covering all the four provinces of Pakistan has become available.
“When a Pakistani buyer puts an order of a certain Chinese product online, which can be bought in Pakistani Rupees, what he needs to do next is only to wait for the parcel to be delivered to his doorstep. On the other hand, we collect cargo at Chinese ports, transport them with our own customs solutions, sort them out in Pakistan, and carry each parcel to the customer’s home”, Sun Chao explained.
To support logistic demand from cross-border trade and local online consumption, high-standard warehouses with a total area of over 7000 square meters have been set up in Islamabad, Karachi, Lahore, and Multan. This figure is still expected to rise.
“The warehouse management system allows receipt of cargo by container and delivery by piece, providing convenient options for e-commerce businesses and offline wholesale clients’, said Sun Chao.
Following the domestic delivery model in China, Speedaf Pakistan offers both economical and standard express delivery options in Pakistan. For parcels to be delivered within a city, customers can choose to receive on the very day or on the next day; for inter-city delivery within a province, packages can arrive on the next morning or later on the next day; for inter-province demand, there are overnight delivery and Third Day Delivery.
Speedaf has established close cooperation with major e-commerce platforms in Pakistan with a special focus on electronic communication equipment, intelligent security products, and 3C products (computer, communication, and consumer digital products). In addition, customized services are also available such as the return, examination, and replacement of goods, less-than-truck-load, and cash on delivery.
“Pakistan is a populous country with over 200 million people, 3.94 percent increase of GDP even amid the ravaging pandemic, booming e-commerce industry, favorable polices for investment, and sound road network linking major cities which provides convenience for logistic transport. Underpinning our business is the deep attachment between the two peoples and the two economies, Sun said.
“With an expected 200 service stations in over 50 cities in Pakistan, we will provide at least 2000 employment opportunities for local people. They will be trained to become professional talents.”
The e-commerce sector in Pakistan is progressing in leaps and bounds. The Special Assistant to the Prime Minister (SAPM) on e-commerce Aon Abbas Buppi has said that Pakistan is aiming to increase e-commerce trade volume up to $9 billion by June Building on the e-commerce boom, we will expand coverage and shorten the delivery time to bring further convenience to Pakistani people, said Sun Chao.