Chinese ECommerce Giant Alibaba Enters Pakistan Market
Alibaba Group (BABA.N) has bought the entire share capital of ecommerce platform Daraz, Rocket Internet said, according to Reuters. American ecommerce giant Amazon is already in Pakistan via its investment in another ecommerce platform Clicky.pk.
Daraz, founded in Pakistan in 2012, operates online marketplaces in Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal. The unit will continue to operate under the same brand following the sale to Alibaba, Rocket said.
Online sales in Pakistan's $152 billion retail market are doubling every year, according to Adam Dawood of Yayvo online portal. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast.
Media reports suggest global e-commerce behemoth Amazon.com could purchase substantial stake in Pakistan's e-commerce site Clicky.pk.
Amazon's Presence in Pakistan:
Amazon already owns about 33% stake in Clicky.pk through its acquisition in 2017 of Dubai-based online retailer Souq. Souq acquired this stake in the Pakistani company in late 2016.
Today, Alibaba Group (BABA.N) announced the purchase of the entire share capital of ecommerce platform Daraz, according to Reuters.
E-Commerce Market Growth:
Online sales in Pakistan's $152 billion retail market are growing much faster than the brick-and-mortar retail sales. Adam Dawood of Yayvo online portal estimates that e-tail sales are doubling every year. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast.
E-commerce in Pakistan is being enabled by increasing broadband penetration and new online payment options. Ant Financial, an Alibaba subsidiary, has just announced the purchase of 45% stake in Pakistan-based Telenor Microfinance Bank.
Payment Options:
Mobile wallets, also called m-wallets, are smartphone applications linked to bank accounts that allow users to make payments for transactions such as retail purchases. According to recent State Bank statistics on branchless banking (BB) sector, mobile wallets reached a high of 33 million as of September 2017, up 21% over the prior quarter. About 22 percent of these accounts – 7.4 million – are owned by women, up 29% seen in Jul-Sep 2017 over previous quarter. Share of active m-wallets has also seen significant growth from a low of 35% in June 2015 to 45% in September 2017.
Summary:
Online sales in Pakistan's $152 billion retail market are doubling every year, according to Adam Dawood of Yayvo online portal. The country's retail market is the fastest growing in the world, according to Euromonitor. Expanding middle class, particularly millennials with rising disposable incomes, is demanding branded and packaged consumer goods ranging from personal and baby care items to food and beverage products. Strong demand for fast moving consumer goods is drawing large new investments of hundreds of millions of dollars. Rapid growth in sales of consumer products and services is driving other sectors, including retail, e-commerce, paper and packaging, advertising, media, sports and entertainment. Potential downsides of soaring consumption include increased amount of solid waste and decline in domestic savings and investment rates.
Related Links:
Haq's Musings
Pakistan Retail Sales Growth
Advertising Revenue in Pakistan
Pakistan FMCG Market
The Other 99% of Pakistan Story
PSL Cricket League Revenue
E-Commerce in Pakistan
Fintech Revolution in Pakistan
Mobile Broadband Speed in Pakistan
Daraz, founded in Pakistan in 2012, operates online marketplaces in Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal. The unit will continue to operate under the same brand following the sale to Alibaba, Rocket said.
Online sales in Pakistan's $152 billion retail market are doubling every year, according to Adam Dawood of Yayvo online portal. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast.
Amazon's Presence in Pakistan:
Amazon already owns about 33% stake in Clicky.pk through its acquisition in 2017 of Dubai-based online retailer Souq. Souq acquired this stake in the Pakistani company in late 2016.
E-Commerce Market Growth:
Online sales in Pakistan's $152 billion retail market are growing much faster than the brick-and-mortar retail sales. Adam Dawood of Yayvo online portal estimates that e-tail sales are doubling every year. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast.
E-commerce in Pakistan is being enabled by increasing broadband penetration and new online payment options. Ant Financial, an Alibaba subsidiary, has just announced the purchase of 45% stake in Pakistan-based Telenor Microfinance Bank.
Payment Options:
Mobile wallets, also called m-wallets, are smartphone applications linked to bank accounts that allow users to make payments for transactions such as retail purchases. According to recent State Bank statistics on branchless banking (BB) sector, mobile wallets reached a high of 33 million as of September 2017, up 21% over the prior quarter. About 22 percent of these accounts – 7.4 million – are owned by women, up 29% seen in Jul-Sep 2017 over previous quarter. Share of active m-wallets has also seen significant growth from a low of 35% in June 2015 to 45% in September 2017.
Summary:
Online sales in Pakistan's $152 billion retail market are doubling every year, according to Adam Dawood of Yayvo online portal. The country's retail market is the fastest growing in the world, according to Euromonitor. Expanding middle class, particularly millennials with rising disposable incomes, is demanding branded and packaged consumer goods ranging from personal and baby care items to food and beverage products. Strong demand for fast moving consumer goods is drawing large new investments of hundreds of millions of dollars. Rapid growth in sales of consumer products and services is driving other sectors, including retail, e-commerce, paper and packaging, advertising, media, sports and entertainment. Potential downsides of soaring consumption include increased amount of solid waste and decline in domestic savings and investment rates.
Related Links:
Haq's Musings
Pakistan Retail Sales Growth
Advertising Revenue in Pakistan
Pakistan FMCG Market
The Other 99% of Pakistan Story
PSL Cricket League Revenue
E-Commerce in Pakistan
Fintech Revolution in Pakistan
Mobile Broadband Speed in Pakistan
Comments
It is ironical then that we may right now similarly be losing out on another revolution. This contemporary ‘Manchester moment’ is about digital technologies and digital economy. As industrial revolution automated mechanical power, digital revolution is about automation of intelligence. Both represent fundamental shifts in human affairs. The digital revolution will as thoroughly transform our economic, social and political organisation as did industrial revolution.
This tragedy is unfolding right in front of our eyes, in a nation supposed to be in good political and economic control of itself. It also has sufficient basic competencies in digital technologies and conducting modern business. As it was in 18th-19th centuries, India’s failure is primarily political.
Missing the digital revolution
A decade or so ago, China trailed India in terms of IT or software technologies. How has China then suddenly become a digital super-power, posing a challenge even to the US? Digital technologies build over and subsume traditional IT and software, but are centrally about next-generation data-based systems.
It is simple. Just examine where in China (or US) all the cutting edge development of digital technologies – like artificial intelligence (AI), Interent-of-Things and blockchain – takes place. It is within super-large domestically-owned digital ecosystems like Baidu, Alibaba, Tencent and Didi. (In the US, these are Google, Amazon, Facebook, Apple etc). Unlike industrial technologies, digital ones are socially-iterative technologies that develop in real-world social and business settings, and not so much in laboratories. Innovating start-ups too get routinely bought and integrated into these ecosystems.
Over the last decade, China created ideal conditions for development of such large domestically-owned digital ecosystems, which catapulted China to global digital leadership. Both Chinese and US governments devote considerable public funds to partner with their private digital ecosystems for digital R&D.
And India? It first allowed Amazon to dump billions of dollars to close in on the domestic e-commerce market leader Flipkart. Not only were many other Indian e-commerce platforms suffocated in the process, domestic leaders like Flipkart had to off-load considerable equity abroad to obtain capital for matching Amazon’s cash burn. And now, most unthinkably, India is ready to sell its top e-commerce platform Flipkart to Walmart. Very soon, India’s two largest digital ecosystems will be foreign-controlled.
It is difficult to understand why India is inviting foreign corporations to own its digital ecosystems that are epicentres both of digital economy and development and control of digital technologies. It is difficult to think of a quicker path to total digital dependency.
Despite what most people think, digital platforms aren’t just ‘more efficient’ marketplaces. They are monopolistic intelligent agents that reorganise and control whole sectors, as they form backward and forward linkages – from manufacturing, inventory management and logistics, to payment and delivery.
https://thewire.in/economy/does-flipkarts-sale-represent-a-manchester-moment-for-indias-digital-economy
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.
Internet Giants Amazon, Alibaba Heading For Consumer Battle In India
https://www.investors.com/news/technology/amazon-stock-alibaba-ecommerce/
Amazon.com (AMZN) and China internet giant Alibaba Group Holding (BABA) are heading for a grand battle in India as they pursue e-commerce growth outside their home markets, according to a report Tuesday from brokerage Morgan Stanley.
The U.S. e-commerce leader has a "larger long-term need for global expansion," said the Morgan Stanley note to clients, with India emerging as a new battleground.
"For now, we see Amazon ahead in India, Alibaba ahead in Southeast Asia, and both players planting seeds in Latin America and Australia," the note said
Walmart (WMT) recently beat out Amazon for Indian e-commerce heavyweight Flipkart. Walmart agreed to pay $16 billion for Flipkart, a firm founded by former Amazon employees.
Alibaba Paytm Stake
While Morgan Stanley says the U.S. e-commerce firm leads Alibaba in India, the Chinese internet giant has a strong presence. Alibaba supports Indian online shopping site Paytm Mall, a rival of Flipkart, with a 36% stake.
Alibaba also has a presence in India through investments in BigBasket, an online grocer, and logistics firm XpressBees, the note says.
In Latin America, both companies are focused on Brazil, it adds.
Amazon India Buildout
The U.S. e-commerce leader has built out 60 fulfillment and distribution centers in India. Amazon also is expanding local video content in India for its internet streaming service.
Morgan Stanley says Amazon and Alibaba will be battling over a $5 trillion market opportunity in India, Latin America, Southeast Asia and Australia.
Amazon edged up 0.3% to 1,615 on the stock market today. Its stock has gained 61% from a year ago and 35% in 2018.
Alibaba stock rose 0.8% to 200.93 on Tuesday. Shares are up 61% from a year ago and 8.5% in 2018.
https://www.urdupoint.com/en/technology/pakistan-to-have-100-mln-smartphones-in-next-388458.html
As per report of GSMA, by year 2020, a whopping 90 per cent of Pakistani population will have access to 3G networks while an impressive 80 per cent population will have access to 4G. Obviously, mobile broadband growth means flourishment of smartphone.
The mobile broadband users growth in pakistan is expected to touch 8 per cent mark in coming years as the country would have more than 100 million smartphones by 2020.
The third-generation (3G) and 4G mobile phone users stand at around 56 million and continue to grow, creating a huge demand for smartphones, which is the top selling category across all major e-commerce platforms.
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The Mobile Economy 2018
https://www.gsma.com/mobileeconomy/wp-content/uploads/2018/02/The-Mobile-Economy-Global-2018.pdf
Having surpassed 5 billion people connected
to mobile services in 2017, the global mobile
industry will reach further milestones
over the next eight years. The number of
unique mobile subscribers will reach 5.9
billion by 2025, equivalent to 71% of the
world’s population. Growth will be driven by
developing countries, particularly India, China,
Pakistan, Indonesia and Bangladesh, as well
as Sub-Saharan Africa and Latin America.
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While more than 3 billion people use mobile internet
globally (internet-connected consumers), their
digital engagement – measured by the GSMA
Global Mobile Engagement Index (GMEI) – varies
significantly between countries. On a scale of 0–10,
South Korea (6.8), Scandinavian countries (e.g.
Finland at 6.7, Sweden at 5.8), Australia (5.5) and
the US (5.3) have relatively high mobile engagement
scores (2017); many subscribers in these countries
use their phones on a regular basis to access not
only internet-based messaging and social media
but also entertainment content (such as movies,
music, games and sports), e-commerce and other
digitally delivered services and content (i.e. financial
services, health, education, government services).
Pakistan, India and Tanzania have the lowest scores
(at around 1.0).
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Telenor’s Easypaisa digitises payments for Nestlé dairy farmers in Pakistan
Pakistan is the third largest milk-producing nation in the world, behind the US and India, with dairy and
livestock accounting for around 12% of GDP. The local unit of multinational food business Nestlé works
with around 150,000 dairy farmers across the country. Every year, the company pays approximately
PKR22 billion ($208 million) for nearly 0.5 billion tons of milk through an extensive chain of more
than 2,500 milk collection centres. Most farmers receive their payments in cash from the supply agent
routed via the traditional banking channel.
Telenor’s Easypaisa mobile money service collaborated with Nestlé Pakistan to make disbursement of
milk collection payments swift, easy and transparent. Easypaisa provided Telenor SIMs and registered
Easypaisa mobile accounts for around 15,000 farmers across Pakistan for the transfer of funds into
their accounts on a weekly basis. Easypaisa processed payments totalling more than PKR1 billion to
dairy farmers annually.
Two technology groups in Pakistan have collaborated to develop a local online payment gateway system to take a share in the growing e-commerce market of Pakistan.
Avanza Group and Premier Systems announced to invest over $5 million in the gateway which is aimed to connect individuals with merchants and banks. According to sources, the two companies will set up the joint venture as Avanza Premier Payment Services (APPS).
Mahmood Kapurwala, CEO of Avanza Group said, “the size of Pakistan’s e-commerce market is estimated to be $1 billion, which should be $30-$40 billion in a country with a population of 207 million.’ He also partnered with NCR, Avaya, Microsoft, and IBM. He added, “We are looking at this gap as an opportunity.”
APPS claims to be the first Financial Technology (fintech) in the country to obtain payment system provider (PSP) and payment system operator (PSO) licenses from the State Bank of Pakistan (SBP). According to McKinsey and Company, a worldwide management consulting firm, Fintech will add about 4 million jobs, 93 million bank accounts and $36 billion annually to the gross national product (GNP), and $7 billion to the government’s net revenue by 2025.
The newly-founded company plans to incentivize brick and mortar businesses with free online services, like building websites and digital marketing. It will only take a certain share in the profit that comes through online businesses. Adnan Ali, CEO, APPS said: “It will move Pakistan towards digitizing major institutions, such as merchants, schools, billing industries, mutual funds and other corporate entities by providing a digital gateway.”
Avanza Group CEO said, Increase in e-commerce acceptance will also help grow the overall retail market when people will have the choice to buy products present in other cities, He said, “If everything remains on track, earning a revenue of Rs400 million will not be a big deal.”
The State Bank of Pakistan (SBP) in its ‘Payment Systems Review’ for the financial year 2017-2018 has provided a statistical snapshot of the payment systems in the country, showing growth in various traditional and modern payment systems.
During the financial year 2018, the country’s core payment systems infrastructure remained operationally resilient. All the channels of payment systems showed significant growth compared to the previous year. The large-value payment system i.e. Pakistan Real Time Interbank Settlement Mechanism (PRISM) processed 1.7 million transactions amounting Rs361 trillion.
There were 1,094 locally registered e-Commerce Merchants having their merchant accounts in 8 banks as of the end of June 2018 showing limited boarding of e-Commerce merchants in the country
These transactions showed significant growth of 54.5 percent and 29.2 percent in both volume and value of transactions compared to the previous financial year. In these transactions, the transactions with regards to third-party customers’ transfers have the highest share of 1.3 million transactions (i.e. 79 percent of the overall recorded transactions) whereas Government securities settlement transactions have the highest share of Rs256 trillion in a value of transactions.
There were 1,094 locally registered e-Commerce Merchants having their merchant accounts in 8 banks as of the end of June 2018 showing limited boarding of e-Commerce merchants in the country. Consumers carried out 3.4 million online transactions of worth Rs18.7 billion on these locally registered e-Commerce Merchants during the year FY18.
These transactions showed a significant YoY growth of 183.3 percent and 98.9 percent compared to the previous year. In addition to the above, domestically issued Debit, Credit and Pre-paid cards processed 6.8 million transactions of Rs. 39.7 billion on local and International e-Commerce merchants. In these e-Commerce transactions, Credit Cards has the highest share both in volume and value of transactions.
While no specific information has been provided on the number of users of these cards, the number of transactions processed through these cards has increased by 37.3 percent with total transactions, as on June 2018, having been reported at 34.4 million, at a value of Rs201.5 billion during the fiscal year 2018.
Agriculture loans in 2017/18 were 38.1 percent higher than the previous year’s disbursements of Rs704.5 billion, the State Bank of Pakistan (SBP)
Having grown at a pace of 21.8 percent and 23.4 percent in the volume and value of transactions respectively, during the year under review, debit cards processed a total of 441.1 million transactions worth Rs5.1 trillion, far greater than the size and value of transactions conducted using credit cards.
However, the bulk of this usage has been on transactions concerning ATM withdrawals whereas the share of transactions with respect to Point of Sale usage has been merely 8.6 percent in volume and 2.9 percent in the value of transactions.
Credit cards, on the other hand, has been the predominant medium for Point of Sale usage, with the 87.2 percent of the total volume of credit card transactions being made on Point of Sale payments and 10.2 percent in e-Commerce transactions.
Meanwhile, Banks disbursed agriculture credit of Rs972.6 billion during the last fiscal year of 2017/18, falling short of Rs1 trillion target set by the Agriculture Credit Advisory Committee (ACAC), the central bank said on Thursday.
https://profit.pakistantoday.com.pk/2018/11/20/82-of-pakistani-urban-consumers-made-a-online-purchase-in-2018-nielsen/
A report released by Nielsen “2018 Connected Commerce” has revealed 82% of consumers having access to the internet in urban areas have made an online purchase, up by 6% from 2017.
According to Nielsen, the growth of e-commerce in the last few years because of the rise in internet and smartphone penetration, especially in the country’s urban areas has contributed to the online sale of particular categories.
Fashion accounted for the largest slice of online transactions of 40%, followed by travel 31% and IT 29% respectively.
The report outlines consumers’ online purchasing habits and it disclosed categories which posted significant growth in e-commerce activity included restaurant deliveries 24%, 22% in beauty and personal care products, books and music 28% respectively.
The report determined that consumers are more conducive to making online purchases when offered a couple of purchasing options and quality assurances.
Furthermore, the report highlighted approximately 55% of the consumers stated that a money back guarantee for products not matching what was ordered would encourage them to buy online.
Also, 49% of consumers shared that free delivery for purchases above a minimum spend would contribute positively impact their buying decision.
Managing Director Nielsen Pakistan, Quratulain Ibrahim said, “Travel, fashion and IT are typical categories for first-time online shoppers, but as their familiarization, comfort and trust levels increase, their category range expands.
They start looking into areas like beauty, personal care and baby products, and then move even wider afield to restaurant deliveries or meal-kit delivery service categories.”
“This is evident in the significant jump we have seen in online purchasing within food delivery in recent years, especially in urban areas and city centres,” she added.
Global online sales in 2017 totalled $2.3 trillion or 10.2% of total retail sales and is expected to reach 17.5% by 2021.
“Online retail development correlates strongly with constantly improving internet access, especially in mobile-first communities.
With connectivity and digital development exploding in Asia, it is no surprise that the fastest growing e-commerce markets are located there,” said Nielsen.
The global online sales of fast-moving consumer goods (FMCG) products are growing four times faster than offline sales, and Pakistan, despite facing infrastructural impediments, is expected to follow the same route but at a varied pace, according to “Nielsen Future Opportunities in FMCG E-commerce” report.
As per the aforementioned report, it surveyed the current growth drivers of FMCG e-commerce in 34 markets and projected that the global online sales will touch as high as $400 billion by 2022.
Nielsen said, “Pakistan being a developing country with the largest youth population (which is more tech-savvy compared to older generations) is also expected to adopt the emerging e-commerce trends.”
“Some of the regions in Pakistan, especially rural areas have been fairly isolated and may explain why 24% of consumers strongly agree that internet connectivity is a barrier to online shopping while 37% somewhat agree,” it added.
According to the State Bank of Pakistan’s “Annual Performance Review 2017-18” report released last month, the volume of transactions in FY18 processed via retail e-Banking channels i.e. real-time online banking (RTOB), ATMs, POS, mobile phone banking, internet banking etc touched 756.5 million valued at Rs47.4 trillion.
The number of local e-commerce merchants registered with banks reached 1,094 and consumers carried out 3.4 million online e-commerce transactions valued at Rs 18.7 billion.
The digital power of China’s Belt & Road Initiative (BRI) is slowly unfolding and shaping into a whole new area of opportunity.
When the BRI took global centre stage in 2013, most conversations revolved around traditional infrastructure: building roads, railways, power sources and linking borders. However, the digital awakening that BRI brings, and the associated development of human capital and innovation, is much more powerful.
The global map is being altered at a much faster rate than anticipated due to the disruption created by digital infrastructure, artificial intelligence, the Internet of Things, and blockchain. Further digital and technological disruption is now set to mend fractures in society – leading to improved living conditions and enhanced economic empowerment.
This disruption has given new life to e-commerce and the start-up scene in BRI countries. In light of the Global Competitiveness Index 4.0, it is extremely important that economies grow in all areas, overcoming challenges and making investment in human capital and innovation. Resilience and agility are key.
Looking at the South Asian region, some of the traditional deterrents to growth have been inadequate transport facilities, patchy power supplies and lack of financial inclusion. As we have seen in the past, industrial revolutions take their time to reach developing countries but the Fourth Industrial Revolution has been quick to reach all corners of the world.
Billions of dollars of investment are bridging the infrastructure and power supply gap while improving technology – the goal is to look past the problems that have hindered the road to progress in countries along the BRI.
The flagship project of the BRI, the China-Pakistan Economic Corridor (CPEC), which is a major collaboration between China and Pakistan, has been rapidly progressing and the impact of the project can be seen in the lives of Pakistani people, as reflected in an improving human development index.
Pakistan, which is emerging from many years of the war on terror, is now on a decent path to progress, with economic growth of 5.8% and improved investor confidence. At the World Economic Forum in 2017, Ebay’s chief executive, Devin Wenig, highlighted Pakistan as one of the fastest growing e-commerce markets in the world. In 2018, Alibaba bought Pakistan’s largest e-commerce platform, Daraz.pk.
..... Ant Financial Services, China’s biggest online payment service provider, recently bought a 45% stake in Telenor Microfinance Bank, in a deal that valued the Pakistani bank at $410 million.
Irfan Wahab, chief executive of Telenor Pakistan, called the deal a “game changer”; while Eric Jing, chief executive of Ant Financial, said it would provide “inclusive financial services in a transparent, safe, low-cost and efficient way to a largely unbanked and underbanked population in Pakistan”.
This kind of investment will benefit from the significant demographic dividend in Pakistan, targeting the largely unbanked young population, and providing not only financial inclusion but also a base on which to build digital businesses.
What the country needs now is to improve its position on the innovation and financial inclusion indices, currently at 89 and 75 respectively, on the World Economic Forum’s Competitiveness Index 2018.
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The rapid completion of CPEC projects and the use of digital technology in the process is disrupting the economy and the lives of people at the same time. The question is whether Pakistan’s leadership will choose to embrace these technologies and take advantage of the biggest project on the road to progress. The future is full of opportunities and promise.
Alipay, a subsidiary of Hangzhou-based Ant Financial, has been cleared by the Competition Commission of Pakistan (CCP) to acquire a 45 percent stake in Pakistan's Telenor Microfinance Bank.
The investment of over US$184 million will expedite widespread adoption of digital payments in Pakistan. With internet penetration continuously on the rise, there are an estimated 60 million subscribers of 3G and 4G in the country that can become potential users of the service.
Several mobile payment services are presently operating in Pakistan. Primarily, these have been offered by telecom operators with a large number of cellular subscribers. However, limited international application has kept the penetration rate of the payment portals relatively low. Entry of Alipay, the world's largest mobile payment platform, will intensify competition higher, improve the quality of service and reinvigorate the entire landscape of the industry.
Pakistan's growing young population makes it suitable for embracing cashless payments on a large scale. People under the age of 30 form 64 percent of the population who are always the most likely to take up any new technology. On top of that, high cellular phone use will be a facilitative factor, since the mobile-first strategy for internet-based businesses is very valid in Pakistan.
Commencement of Alipay's operations in Pakistan will also provide a major push to e-commerce. eBay CEO Devin Wenig recently identified emerging economies like Pakistan as the fastest growing e-commerce hubs of the world. The trend is spreading like wildfire across the country with new online shops emerging constantly. A reliable e-payment gateway with worldwide collaborators is all that Pakistanis need to streamline their online transactions.
Alibaba had already acquired Pakistan's leading e-commerce platform Daraz. Utilizing the reach of Alibaba, Pakistani sellers will now be able to connect with global buyer.
The digital payment boom will be most beneficial for small and medium-sized enterprises that form the backbone of the national economy. Many of these businesses face difficulties in financial transactions due to being located in rural areas. Alipay might prefer to focus on them as the Pakistani government wants to reduce their business costs and difficulties.
Across the border in China, a new policy is on the cards to increase e-commerce purchases from overseas. Around 63 additional categories are being added to a product list of what can be imported duty-free through online platforms. Moreover, 22 cities, such as Beijing, Nanjing and Shenyang, are also being included in e-commerce pilot zones.
With several food items in the revised e-commerce import list, there is much potential for Pakistani farm produce. Fruits like mango and the mandarin hybrid kinnow can gain extended reach in the Chinese food market and the recent push to increase meat and poultry production could further boost Pakistan's exports.
The targeted online shoppers in China are increasingly focusing on foreign brands. Large businesses and premium brands from Pakistan can reach out to these buyers through Tmall Global – another Alibaba operated e-commerce platform allowing Chinese consumers to purchase products from abroad. Pakistan's small to medium businesses might not have the logistic prerequisites for this platform, but international-standard large companies certainly can.
Ant Financial is coming to Pakistan at a time when trade between Pakistan and China is touching new heights through the flagship project of Belt and Road Initiative (BRI) known as China Pakistan Economic Corridor (CPEC).
Jayadevan PK Shadma Shaikh December 11, 2018
https://factordaily.com/chinese-fintech-goes-global/
A company document that FactorDaily reviewed lists eight major mobile wallet players in South and Southeast Asia among Ant Financial’s investee companies. These are Easypaisa in Pakistan, BCash in Bangladesh, TouchnGo in Malaysia, Kakaopay in South Korea, GCash in the Philippines, Ascend in Thailand and Emtek in Indonesia. And, of course, Paytm in India.
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“Many of these people are either geographically remote, live in rural areas that are not served by banks, or that are not covered by branches and ATMs. The traditional banking services are not adequate or too expensive for these people,” says Konstantin Peric, Deputy Director, Level One Digital Payment Systems, Financial Services for the Poor (FSP) at the Bill & Melinda Gates Foundation.
To that end, Peric and a few other partner companies have built MojaLoop, an open-source software that can be used to build national digital payments platforms. In Swahili, Moja means One. Projects that use Moja Loop are underway in Kenya, Uganda, Tanzania, and Nigeria in Africa, and in Indonesia, India, Bangladesh and Pakistan in Asia.
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urugan is the owner of a small cloud kitchen in Shanghai. He speaks fluent Tamil, passable Mandarin, and a bit of English. The 41-year-old small time entrepreneur supplies Indian food to universities and office establishments in the city.
“I do it all on WeChat,” says Murugan, explaining how he runs a WeChat group called Murugan’s Kitchen where he posts a daily menu, takes orders and receives payments. “Most of my expenses are managed through WeChat,” he says. He serves between 100 and 200 customers daily.
If you want to gallivant about the galaxy, the Hitchhiker’s Guide to the Galaxy recommends getting a towel. But if you ever go to Beijing, a smartphone will do just fine.
Besides the ability to help you with obvious things, what makes the smartphone truly powerful here is that you can pay for everything using the phone. Not just in China’s large cities like Shanghai or football field sized shopping destinations such as China Mall in capital Beijing, but also in small towns and villages and tiny establishments.
Millions of entrepreneurs like Murugan, do business on mega platforms run by Alibaba and WeChat. China’s fintech growth, on the back of these platforms, has been unprecedented. With a record $12.8 trillion in mobile payment transactions in the 10 months to October last year, China even surpassed the United States, at only $49.3 billion during that period.
Mainly two apps – WeChat and Alipay – make all this possible. These apps owned by Chinese internet giants Tencent and Alibaba, respectively, control 93% of the country’s mobile payments market. As China pursued an industrial policy that made it the factory of the world and millions of Chinese came out of poverty, these apps played a big role in making their lives easier in the mainland.
Both Tencent and Alibaba, have reaped economic benefits of this growth. Tencent, which became China’s first company to cross $500 billion in market cap, is now valued at $374 billion. Alibaba has a market cap of $377 billion. Founders of these companies have also become immensely wealthy. Pony Ma, the founder of Tencent, is the world’s 14th richest person with a net worth of over $50 billion. Jack Ma is worth over $34.7 billion. Both are also members of the Communist party in China.
Next, they, along with dozens of hyper-funded upstarts, have designs on the world. They are quietly taking over the global fintech market at a scale that’s unheard of before. “If you said in 2010 that software is eating the world, in 2018, you should say Chinese software is eating the world,” says Nikhil Kumar, a volunteer with Indian software products think-tank iSpirt who was recently in China to learn more about the fintech ecosystem there.
https://www.ccn.com/pakistans-first-blockchain-based-remittance-service-launched-using-alipays-technology/
A Pakistani financial institution has rolled out a cross-border remittance service based on blockchain technology developed by Alibaba affiliate, Alipay.
Telenor Microfinance Bank and Malaysian fintech firm Valyou have partnered to offer the service to that will operate between Malaysia and Pakistan. The service is expected to enhance the efficiency and speed of remittances from the former to the latter.
Additionally, Pakistan’s first blockchain-based remittance service will eliminate intermediary costs making it cheaper to send money. Users will also be able to track the remittances at ‘every step of the way’, according to a statement.
Lucrative Remittance Market
At the moment, it is estimated that Pakistanis living and working in Malaysia send around $1 billion annually. This is about 5% of the estimated $20 billion in remittances that is sent by the combined Pakistani diaspora spread across the globe. The State Bank of Pakistan’s governor, Tariq Bajwa, noted during the launch of the service that remittances contribute significantly to the country’s economy.
At around USD 20 billion per year, international remittances are important from the perspective of overall macroeconomic stability and their positive spillover in improving lives of millions of families. Home remittances contributed to over 6% in GDP, equivalent to over 50% of our trade deficit, 85% of exports and over one-third of imports during FY 2017-18.
This is not the first time that Alipay is involved in a blockchain-based remittance solution in Asia. Mid last year, Hong Kong-based AlipayHK announced a blockchain-based money transfer service between Hong Kong and the Philippines.
https://twitter.com/CryptoCoinsNews/status/101157117132065177
During the launch of the service the founder of Alibaba, Jack Ma, indicated that he had long wanted to reduce remittance costs between China and Pakistan:
This comes from a promise I made a long time ago when Alipay was just launched. I have friends who are Filipino and they asked me when they could use Alipay to send money home because it was too expensive through banks, which charge too much.
Filipino Remittance Market
Currently, the Philippines is the world’s third-largest remittance market. In 2017, inflows into the Southeast Asian country amounted to approximately $3 billion. A significant proportion of the expatriate community in Hong Kong hails from the Philippines. In 2016, Filipinos in the city-state are estimated to have remitted $561 million to their home country.
Another Chinese firm that recently announced plans to launch a remittance service in the Philippines is Huaren Capital. Unlike Alipay, Huaren Capital will launch a stablecoin pegged to the Filipino Peso and partner with local banks.
BR Research: It has been ten years since Carrefour came to Pakistan. Please walk us through the journey so far.
Gyu Taeg Kim: I’d like to start off with an introduction of our group Majid Al Futtaim which is the leading shopping mall, communities, retail and leisure pioneer across the Middle East, Africa and Asia. Majid Al Futtaim holds the exclusive franchise rights to operate Carrefour in 37 countries and currently operates over 270 Carrefour stores in 15 countries. The recently announced Uganda market will be its 16th country.
Majid Al Futtaim opened its doors in Pakistan in 2009 by starting the first of its kind hypermarkets in the country called Hyperstar. Pakistan has immense potential and has a young dynamic population with an average age that is amongst the lowest in the world. The adaptation of the younger generation is much faster when it comes to embracing new retail channels. When I started off as Country Manager in January 2016, we were operating only two stores with one in Lahore and the other in Karachi. Since then it has grown to 7 hypermarkets and one supermarket with presence in Islamabad and Faisalabad as well.
In December 2018, Hyperstar was re-branded to Carrefour by Majid Al Futtaim across Pakistan. This year marks our tenth anniversary in Pakistan and since then, Majid Al Futtaim has invested Rs8 billion in Pakistan and has created 7000 jobs both directly and indirectly. We plan on providing employment to an additional 2000 people every year on the back of our expansion plans.
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BRR: What about future expansion plans?
GTK: Generally, we remain open to opportunities that will enable us to grow our footprint. We will focus on tier-2 cities in the next phase and plan to open stores in Gujranwala, Hyderabad and Multan within the next two years.
BRR: The footprint of Imtiaz Supermarket and the Al-Fatah group is growing rapidly in the supermarket segment. How do you view this competition?
GTK: The retail space in Pakistan enjoys healthy competition, which we embrace. While other retailers focus on very specific customer segments, i.e. mainly high-end customers or customers with lower spending power, categorized as C&D customers, Carrefour is able to cater to a wide variety of customer segments by offering an unbeatable choice, quality and value at the best price. At our hypermarkets we deliver a best in class shopping experience to our customers and create great moments for them every day. Our main business is consumer goods and fresh produce and in fact more than 70 percent of our total turnover is generated by these two categories.
BRR: How much is Carrefour’s market share in the modern trade space in Pakistan compared to its competitors?
GTK: In Pakistan, 20 percent of the total retail sector is modern trade, which was roughly 12 percent back in 2013. In the modern trade space, we have one of the top market shares. But if I consider it from the end consumer perspective, then we are number one followed by our local competition. We are occupying 30 percent and the remaining percentage is divided amongst our local competitors and other medium sized players.
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BRR: You mentioned that the majority of Carrefour’s revenue comes from consumer goods and fresh produce. Are you investing in the local value chain for these items?
GTK: We have increased direct purchasing from farmers and are ensuring guaranteed procurement in order to sustain prices for basic items throughout the year. The impact of Carrefour extends beyond millions of customers, to more than 700 suppliers and partners across Pakistan. This includes local farmers, manufacturers and producers.
In 2019, Pakistan's e-commerce industry remained resilient; Daraz, a leading e-commerce platform in the country, witnessed exceptional growth as the number of users visiting the platform increased by 100 percent.
According to Daraz here on Wednesday, the number of customers shopping on its platform increased by 140 percent and the number of orders placed in the year rose by 200 percent despite inflationary pressures and currency fluctuations. Through the year, the platform pushed the boundaries of innovation to find solutions and drive growth.
As per a Karachi Chamber of Commerce and Industry (KCCI)'s 2019 ecommerce report says that two factors highly-critical for the growth of the ecommerce landscape in Pakistan are financial inclusion and the country's literacy rate. With the launch of the Daraz Wallet in March, Daraz has not only contributed to financial inclusion but encouraged a shift towards digital payments.
Figures provided by Daraz, more than 1 million wallets were activated over the year and digital payments contributed to 40 percent of the overall share of orders. With the launch of Daraz University, the platform has focused on educating a growing seller base on ecommerce operations to ensure the growth of their online ventures. Extensive free-of-cost tutorials available to new and existing sellers focus on product pricing, packaging and customer service and have helped empower 30,000 sellers this year.
In the out-going year, Daraz also empowered sellers to reach a larger, global customer base with the launch of DExports. The platform provides complete support to local exporters to help them capitalise this opportunity in the form of free-of-cost trainings, knowledge sharing and offering a full ecosystem of payments and logistics support.
Exports carries the potential to boost Pakistan's exports in the coming years and open up more opportunities for local manufacturers.
Logistics in Pakistan has remained a challenge because the landscape in Pakistan is not digitized. “Daraz Express (DEX) was launched as a solution to the logistics challenge and is a cornerstone of the growth Daraz has witnessed in the past year. The company employs more than 1,500 DEX heroes and conducts more than 60 percent of all Daraz orders. As a result, the delivery time for orders has been reduced by 1-2 days and customer experience has been enhanced," said Daraz.
According to it, a number of initiatives Daraz has taken in the past year have ensured the platform's growth despite economic difficulties in the country. By developing a strong logistics infrastructure and a payments infrastructure that encourages digital transactions, Daraz has created fundamental changes in the country's ecommerce landscape. The platform stands in a unique position to alter the landscape, create opportunities for Pakistanis and lead the country in the digital era.
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.
Talha Ansari, Muhammad Nowkhaiz, and Wahaj Ahmed; who previously worked with Careem, Rocket Internet, Daraz, and McKinsey, Retailo wants to empower over 10 million SMEs in the retail sector of the Middle East, North Africa & Pakistan with the use of technology and real-time data. Its marketplace enables will enable the retailer to procure inventory for their stores.
Retailo is starting with small grocery stores in Saudi Arabia and Pakistan which it says is a $100 billion opportunity. It had apparently launched in Pakistan’s largest city Karachi a few months ago and has recently launched in Riyadh too. The startup said that it will focus on Saudi as its home market.
“Retailo’s technology and operations combine to deliver a strong value proposition to retailers, manufacturers, distributors, and wholesalers. It is focused on offering SMEs competitive pricing; a one-stop-shop to discover products and the ability to order whatever they need, whenever they need,” said the startup in a statement.
The biggest highlight of the startup is its team. Talha Ansari, according to the statement was the youngest CEO at Foodpanda (Pakistan), at the age of 25. He later worked with Careem as Senior Director Operations helping the company scale its last-mile delivery business in Saudi. Mohammad Nowkhaiz, prior to founding Retailo was Head of Strategy at Careem and spearheaded company’s super app strategy post-Uber acquisition. Wahaj Ahmed is a former McKinsey consultant who was the youngest Careem GM at 25 and grew company’s business in Karachi by 10x in eight months, claims the statement.
The three founders commenting on the occasion, said, “We strongly believe in creating impact in the lives of people by giving them opportunities to improve their earning potential. The MENAP region has a significant opportunity to increase its economic prosperity by unlocking the productivity delta that exists between the region and global benchmarks. MENAP is home to 700 million individuals & 10 million SMEs; and its unorganized retail sector presents the perfect opportunity to increase the efficiency of supply chain by utilizing technology and real-time data.”
Interestingly, their competition in both Saudi and Pakistan includes startups founded by Careem alumni. Sary, the leading Saudi player in the space is co-founded and led by Mohammed Aldossary, a former Careem general manager. It closed a $6.6 million Series A earlier this year. Bazaar, the Pakistani B2B ecommerce platform that raised $1.3 million pre-seed earlier this year is co-founded by Saad Jangda, who was one of the founding members of Careem Now. Dastgyr, another Pakistani startup going after the same market also has Careem alumni as its co-founders.
Shane Shin, the Founding Partner of Shorooq Partners thinks that Retailo is led by exceptional founders, “Seed stage investing is all about backing the right people. We have looked at this space deeply and are proud to invest in the dream team behind Retailo who we believe can successfully build a strong, regional and international business.”
Khailee Ng, Managing Partner, 500 Durian, said, “While they operate one of the fastest-scaling business models in the world, their success means millions of SMEs and rural populations are more productive and have more stability and food security. Technology can
impact the next billion, and we’re already seeing it here with what Retailo had been doing.”
https://www.brecorder.com/news/40091975
An important milestone, now Pakistani merchants will be able to sell their products on the platform with ease. It will mostly benefit Pakistan-based merchants who want to sell their products abroad. Amazon has a huge network. The potential of the marketplace on Amazon is three times bigger than any other e-Commerce platforms.
There are over 2 million people selling on Amazon worldwide. Almost anyone can list an item for sale on Amazon, whether it’s something you’ve purchased wholesale, made yourself or simply a product you no longer want.
Fulfilment by Amazon (FBA) is a business model that Amazon offers, which really is a game-changer for online businesses. Through the FBA programme you send your product inventory in bulk to an Amazon warehouse and when a customer purchases your product, Amazon packs up the product and sends it to the respective customers.
When you are selling products via FBA you do not have to fulfil individual orders, manage returns, or deal with customer service on issues regarding deliveries. You can send in hundreds or thousands of items to Amazon warehouse at the same time instead of running to the post office every day to ship your orders.
One is advised to start with ordering small inventory at first. This approach enables you to test a product market and check whether the products you intend to sell belongs to an interesting niche and has the potential to get sold.
Targeted keywords are said to make a difference and these are so important in Amazon listings. With the right keywords in titles and descriptions of your products, you will, it said, quickly see your product searches relatively on the top and they will start getting sold well. It is recommended by Amazon experts that you get key insights, clear directions and a complete walk-through on how to sell well on Amazon FBA from Pakistan right now with Enabler’s training courses.
Firstly, you are expected to have to look at your competitors and find the profitable products relating to your product niche. Also you are recommended to do your research and look at Amazon’s best sellers as well. Moreover, you can use tools and services like AMZ Scout or Smasher to get all the related data of the products you are interested in like their competitor Intel, monthly sales and more.
It is also recommended that you photograph your product from different angles, including close ups, in operation mode, and its scaling size picture too. Also, you can add 3D images and videos of the product to make it more engaging. Amazon allows up to 250 characters to be used for product titles, but that does not mean that you have to use all the 250 characters. Optimize your bullet points about the description of the product, so that when the customer lands on your product page, they should see all the details regarding the product. Publish reviews: If 200 people are saying product 1 is great and very few people are saying anything about product 2, then guess which one of the products you are going to get?
Pakistan’s e-Commerce industry is emerging rapidly and has the potential to strengthen country’s economy. The existing ICT infrastructure is linking remote areas to mainstream.
At the National e-Commerce Council, a policy framework discusses the views and concerns of all stakeholders and makes recommendations based on them. The proposed policy framework tends to facilitate freelance service providers, existing e-Commerce businesses and encourage entities involved in traditional commerce to venture into e-Commerce, thereby improving prospects of productivity, generation of new employment opportunities and enhanced levels of consumer protection.
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.bloomberg.com/news/articles/2021-12-01/alibaba-s-south-asian-partner-aims-to-double-orders-every-year
Daraz has invested more than $100 million in Pakistan and Bangladesh over the past couple of years. Some of that has gone into building its own delivery network. It now handles about 70% of its deliveries and has delivered more than 150 million packages since it started. It plans to offer logistics as a separate service as well, and is testing buy-now-pay-later services in Sri Lanka before a wider rollout.
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Daraz Group, the e-commerce retailer backed by Alibaba Group Holding Ltd., expects to continue doubling retail volume over the next 5 years thanks to its lead in emergent South Asian markets.
Daraz should maintain a compound annual growth rate of about 100% in e-commerce deliveries, sustaining the pace of the past four years, Chief Executive Officer Bjarke Mikkelsen said in an interview. Revenue growth has also doubled on average in the same period, he said.
South Asia’s e-commerce markets are picking up as venture capital firms ramp up investment. Online retail accounts for just about 2% of the gross domestic product in the five countries in which Daraz operates -- Pakistan, Bangladesh, Sri Lanka, Myanmar and Nepal -- compared with 20% in Indonesia, the former Goldman Sachs Group Inc. banker said.
“We really see the digital economy take off,” Mikkelsen said at his Karachi office overseeing the Arabian Sea. “There’s plenty of runway.”
Daraz has amassed 35 million users in the five countries and expects to hit 100 million active customers well before 2030, he said. They will feed into Alibaba’s target of reaching 2 billion global consumers by 2036, about a quarter of the world’s current population. The Chinese e-commerce leader has built a portfolio of companies from Turkey to Russia and Asia to help achieve the target.
There is no active plan but “it’s a possibility” that more investors may be brought into the company in the future, said Mikkelsen. Alibaba-backed Trendyol drew capital from SoftBank Group Corp. and two Gulf wealth funds in August.
Daraz was the largest player in South Asia excluding India, said Ali Farid Khawaja, chairman at KTrade KASB Securities Ltd. “In Pakistan, there is no e-commerce company that even comes close to them,” he said. “Besides the scale, they are the only one which has made supporting infrastructure, including warehouses and logistics.”
Daraz has invested more than $100 million in Pakistan and Bangladesh over the past couple of years. Some of that has gone into building its own delivery network. It now handles about 70% of its deliveries and has delivered more than 150 million packages since it started. It plans to offer logistics as a separate service as well, and is testing buy-now-pay-later services in Sri Lanka before a wider rollout.
But competition is intensifying. Pakistan’s startup industry has drawn more than $300 million of funding this year, most of that going to potential rivals in e-commerce.
“Even though there are competitors coming up in different verticals, our biggest growth opportunity is from the digital economy to grow,” Mikkelsen said. The industry is “still at an early stage.”
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.
https://techcrunch.com/2022/06/17/alibaba-logistics-arm-pakistan-daraz/
Cainiao, the logistics service operated by Alibaba, is launching two automated distribution centers in Karachi and Lahore as its first entry into Pakistan, it announced on Friday.
Alibaba’s overseas expansion has manifested in a mix of investment and integration over the past decade. In 2018, the e-commerce titan boughtPakistan’s e-commerce platform Daraz for an undisclosed amount. It controls the online shopping service Lazada, which is neck to neck with Shopee in Southeast Asia, and owns a stake in Turkey’s Trendyol as well as Indonesia’s Tokopedia.
Founded in 2012, Daraz was born out of the internet venture builder Rocket Internet like its sibling Lazada. It delivers to Pakistan, Bangladesh, Sri Lanka, Nepal, Myanmar and other countries in the region. Daraz declined to disclose how many active users it has, only saying it has “served a potential user base of 500 million people” and grew 85% in gross merchandise volume (rough metric for sales in e-commerce) over the last two years.
The smart distribution centers will come with a suite of Cainiao’s in-house tech like electric control units, software-based programmable logic controllers (PLC is critical for warehouse automation but traditionally is hardware-powered, Caniao told TechCrunch) and a computing solution that promises to combine the capabilities of cloud and the speedy runtime on the edge.
The suite of warehousing solutions, said Cainiao, could reduce manual labor by half and increase human productivity by 100%.
Given Alibaba’s far-reaching footstep worldwide, it won’t be surprising to see Cainiao following the parent into more countries. Cainiao already operates nine large overseas distribution centers across Europe, Asia and the Americas and has plans to ramp up operations in Southeast Asia, South Asia and Europe, the company’s vice president of technology Ding Hongwei said in a statement.
Integrating Cainiao into Alibaba’s sprawling e-commerce portfolio indeed looks to be the plan.
“Logistic network development is a priority in our globalization strategy as logistics is the fundamental infrastructure supporting a high-quality consumer experience based on integrated product supply from cross-border and locally,” Daniel Zhang, CEO of Alibaba, said on the firm’s December earnings call.
“Cainiao has been developing logistic network in Southeast Asia and Europe, leveraging the commerce use cases presented by Lazada, AliExpress, and the Trendyol.”
AliExpress is Alibaba’s cross-border e-commerce platform that mostly connects Chinese sellers to global consumers.
Over 1.2m vendors of country registered with marketplace
https://tribune.com.pk/story/2363968/pakistan-a-popular-seller-on-amazon
ISLAMABAD:
Pakistan has now become the third largest popular new seller on the Amazon marketplace, after the United States and China, with over 1.2 million registered vendors.
Pakistan was allowed to enter the Amazon marketplace in May 2021, a year after talks began in 2020, following the implementation of Pakistan’s first e-commerce policy, Marketplace
Pulse reported.
There are more sellers in Pakistan as compared to India, Vietnam, the UK
and Canada.
The country, which has just registered itself with the marketplace, is home to the world’s three largest Amazon seller groups. These vendors are expected to contribute to Pakistan’s exports of over
$28 billion.
Young entrepreneurs and small and medium-sized enterprises across the country will be able to avail the benefits offered by the platform, which will widen and diversify Pakistan’s export basket.
This will not only enhance their revenues but will also help the government in improving the macroeconomic outlook of the country,
it added.
The expansion of the e-commerce industry is important to support the medium and small-sized businesses to operate and make profit with the rising cost of
doing business.
Pakistan’s e-commerce policy is part of the overall Digital Pakistan vision aimed at paving the way for a holistic growth of e-commerce by creating an enabling environment in which enterprises have equal opportunity to grow steadily.
Major exports of Pakistan that contribute to the national economy include textiles, leather and sports goods, chemicals, carpets and rugs. Pakistan also exports significant quantities of rice, sugar, cotton, fish, fruits
and vegetables.
According to eCommerce analysis, Pakistan is the 37th largest market for eCommerce with revenue of $5.9 billion in 2021, placing it ahead of Iran.
With an increase of 45%, the Pakistani eCommerce market contributed to the worldwide growth rate of 15% in 2021.