By 2020: Pakistan’s e-commerce market to surpass $1 billion

Time for investment is now, say pundits; rollout of 3G, 4G has helped

KARACHI: Pakistan’s e-commerce market is expected to surpass $1 billion in five years, say local tech gurus who believe “now” is the time to invest in this growing segment and demonstrate leadership to succeed in this industry.

“Pakistan is expected to see a boom in e-commerce in the next five years. This represents a huge opportunity for both start-ups and investors,” said a press release quoting Shayaan Tahir, Founder and CEO of local e-commerce giant Homeshopping.pk, which has partnered with digital agency Creative Chaos to form HSN Ventures.



Currently valued at over $60 million, the country’s e-commerce sector is doubling in size every year - that is, it is growing at a compound annual growth rate (CAGR) of over 100%. The industry analysts predict this trend (rate) will continue during the next three to five years and help the sector surpass the $1 billion milestone in 2020.

Now a fully-owned subsidiary of HSN Ventures, Hompeshopping.pk is looking to fully capitalise on these growth projections. “HSN Ventures provides us the platform to scale our business and operations for the growth that Pakistan is expected to see in the next five years,” Tahir said.

Though still in the 12% range, the broadband penetration (number of internet connections per population size) is the real driver for the recent growth in e-commerce.

Since the rollout of 3G, which started in mid-2014, Pakistan has been adding more than one million new users to its mobile Internet base every month. The number of broadband users in the country skyrocketed to 23 million at the end of October, 2015, up from less than 4.7 million a year ago.

“Third-generation (3G) [mobile Internet technology] is reaching remote areas and adding new Internet users thus, boosting our traffic,” Tahir of Homeshopping.pk told The Express Tribune recently, adding 50% of their traffic is now coming from mobile phone platform.



“Pakistan is at a turning point in terms of internet and mobile penetration,” Creative Chaos’ chief Shakir Husain said. “The time to invest in e-commerce in Pakistan is now.

Elaborating his point on leadership, Husain said, “It is how one plans, innovates and finances their growth that will ultimately determine success in this industry.”

Given the country’s overall retail market is worth $40 billion, the industry experts believe e-commerce in Pakistan is still in its infancy - it is barely 0.2% of the overall market.

Published in The Express Tribune, December 27^th, 2015.

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