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

Published: December 27, 2015
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Time for investment is now, say pundits; rollout of 3G, 4G has helped. CREATIVE COMMONS

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

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.

In Pakistan, e-commerce entering a new era

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.

E-commerce market could be worth ‘several hundred million dollars’ by 2020: report

“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 27th, 2015.

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Reader Comments (5)

  • Dec 27, 2015 - 1:45PM

    Its mean, Rocket Internet share will be on hike in 2020. Recommend

  • PakPower
    Dec 27, 2015 - 4:54PM

    HomeShopping, instead of making tall claims, should work on improving its customer service. My experience with them was appalling. I ordered three items from them and they arrived separately over the course of one month – after numerous emails and calls. I won’t recommend them to anyone.Recommend

  • Atheist_Pakistani
    Dec 27, 2015 - 9:03PM

    Sponsored post. E-com is absolute failiure in Pakistan. It will never being mainstream until big brand start operating in Pakistan. I’ve been in e-com business for over eight years.Recommend

  • curious2
    Dec 27, 2015 - 9:47PM

    Govt extended overture to Google, Ebay and Amazon and got nothing but polite “thanks but not right now”. Pakistan needs to make fundamental changes in banking, distribution, judiciary etc. Xenophobic issues may also be a barrier – remember Pakistan doesn’t allow people to legally access You Tube.Recommend

  • Woz ahmed
    Dec 28, 2015 - 1:29AM

    @PakPower:

    My experience with homeshopping Is similar, avoid at all costs.

    A billion sounds a great deal , but with a population of 225-250 million in 2020, we are talking $4 a head Recommend

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