The online boom

Pakistan is a country that is rapidly developing as an online market. There is a rise in e-commerce that is linked to the explosion of mobile phone and smart device ownership, and the increasing availability of the internet even in remote areas. With a growing number of customers that rely on the numerous courier services to deliver their orders there is an increasing awareness also of the quality of the delivery service. A poor customer experience at the delivery end of the transaction loses business for the vendor, as customers rarely repeat if they have been let down or disappointed.

The market has matured with remarkable swiftness, and as recently as five years ago it barely existed. There are now delivery companies that employ as many as 12,000 people, and some have diversified as the courier and logistics business grew. The e-retailers want a quick turnaround, they are agile traders that do not carry large stocks and ‘re-load’ on a daily basis. If the distribution service is not up to the mark they are hurting quickly, with narrow margins and tight delivery timelines. The cost of office rents and storage is going up all the time and it makes economic sense for retailers to move to an e-commerce platform.

E-commerce is here to stay and it is only going to get bigger, this is not a bubble that is about to burst. People, and women in particular, are opting to shop online. For the retailers, there is now no need to have multiple outlets across the country, they can operate from a single service base with small numbers of staff and proportionate to what they used to spend, minimal outlay on bricks and mortar. Predictors of growth vary wildly but it is not unreasonable to expect that 15-25 per cent per annum is possible. The e-commerce sector as a fraction of the market overall is tiny with 0.05 per cent of total retail sales, but with a population of 200 million that are increasingly smart-dependant the courier services can only get bigger. A revolution happened under our noses, and we barely noticed.

 

Published in The Express Tribune, December 29^th, 2017.

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