E-commerce can aid PM Imran's job creation plan

Entrepreneurship culture will give a boost to many ancillary industries

Usman Hanif March 31, 2019

KARACHI: Prime Minister Imran Khan has set a mammoth challenge for his government as he intends to create 10 million jobs over the five-year tenure of his government.

Though many are sceptical, the goal may be achieved if the potential of e-commerce is exploited.

Pakistan has a 6% unemployment rate and experts estimate the jobless rate can surge up to 30% if the unregulated sector is included.

“The plan of creating a large number of jobs seems a distant possibility due to the overall economic slowdown in the country,” remarked Elixir Securities’ Investment Banking Director Hamad Aslam.

However, the government is doing well by framing policies for the manufacturing and agriculture sectors - the areas which will create many jobs in Pakistan. “In fact, the production sector is suffering the most from the economic slowdown,” he said.

A couple of days ago, Daraz Pakistan Managing Director Ehsan Saya claimed that the online portal would create one million, direct and indirect, jobs by 2022.

Talking about the probability of job creation by e-commerce, Aslam said e-commerce first created entrepreneurs by providing a level playing field for everyone.

“If we look at the scenario five years ago, when e-commerce was not there, people could not start a business as they first needed a huge investment,” Hamad said, adding that manufacturing in Pakistan was impossible for the new comers.

However, with the arrival of e-commerce, “any individual can become a trader from the confines of his home and there is no need for physical presence,” he added. “You can just buy a product and display it online for reselling it.”

He was of the view that the sector itself could not create jobs directly, but it gave a boost to the culture of entrepreneurship, which in turn created jobs.

“It provides an avenue for small and medium businesses, home-based businesses and individuals to sell their products to a vast market - a facility, which was not available before the arrival of e-commerce,” said Aslam.

Without e-commerce, the small businesses could not have been able to compete with large multinationals and business empires, he said. E-commerce provides a uniform platform for all businesses. “Everybody has got a level playing field now,” said the analyst.

There are also many ancillary industries like fintechs, which offer mobile payments which is an important part of financial inclusion. E-commerce has a diverse supply chain from the procurement of a product to its delivery. Later, it can also help give a boost to customer feedback.

Daraz managing director said every seller added to its portal created a further five to 10 jobs. “Digitalisation is bringing a new industrial revolution in Pakistan,” he said.

This proves that the sector has immense potential if the entrepreneurship culture is encouraged.

Presenting another side of the story, ICT expert Parvez Iftikhar said the overall situation of Pakistan’s e-commerce was not very bright. “Every business activity is going to be online, but we have a long way to get there.”

“For e-commerce, we need at least smartphones in the hands of the public if not computers and laptops,” he said, adding that to come online “we need internet, and its speed should be faster if we want efficiency.”

“We have relatively much lower smartphone penetration and the internet speed is very low across Pakistan,” he said. The government has aggravated the situation by putting high taxes on smartphones, internet and associated areas.

“Internet helps countries solve their every problem so the government should work on increasing the penetration of internet to earn revenue when people operate their business online,” Iftikhar added.

Published in The Express Tribune, March 31st, 2019.

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