Retailers struggle to iron out e-commerce wrinkles

Hurdles like logistics, product supply and payment methods still a concern

Shahram Haq February 11, 2017

LAHORE: The rapid shift of Pakistan’s booming retail paradigm towards e-commerce platforms may be succeeding in urban and rural areas, but the entire supply-chain mechanism itself is facing some hurdles.

Issues such as logistics, product supply and payment methods still are a concern for both retailer and the end-customer, which often end in delivery delay or incorrect product distribution.

Though big retailers and online groups are working to fix these issues, some loopholes and lack of sound mechanism are making the task difficult.

As per retail experts, many medium- and large-scale retailers after entering and analysing system loopholes put the online sales of their products under a secondary option and keep focusing on their physical presence.

“Vendors customer support service and product delivery is weak even for some big groups, many times the end customer observes a price difference and huge delays in product delivery especially on special days like Black Friday,” said Yousuf Jamshed, Chief Executive Officer of Retail Leaders Conference.

The online shopping craze in Pakistan has increased manifolds since the last two years especially when big groups started focusing on cultural, local and international events. Yet the end customers often receive wrong or pirated products and that too after the promised timeframe.

As pre retail industry statistics, the online shopping market has yet to surpass 1% of the total retail market of Pakistan, and is just under $100 million out of $152 billion retail market as calculated by Planet Retail.

Daraz Asia’s Chief Executive Officer Jonathan Doerr also told The Express Tribune that regarding the supply-chain issue, logistic support and relationship with vendors is the area that needs most attention.

While customers are complaining, some mid-size retailers working on product delivery are facing additional charges from logistic companies. “We are satisfied with our product delivery mechanism but logistic companies divide the county in to different zones and charge us accordingly,” said Danish Haq, a fashion apparel retailer.

Additionally, logistic companies have made price slabs, and charge collection and insurance fee for products worth more than Rs5,000.

Nextbridge Private Limited general manager Fahad Shakeel told The Express Tribune that time has come to introduce online payment solution for this industry as cash on delivery poses some threats.

“Normally, vendors don’t have insurance on their products and cash-on-delivery has several issues,” Shakeel said, adding that besides this many medium and small scale logistic companies do not have the expertise to ship, fragile products and in case of any mishandling of the product the vendor has to bear the loss.

Published in The Express Tribune, February 12th, 2017.

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