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A road away from traditional brick and mortar stores has opened up in Pakistan’s major cities

By YUSRA SALIM
PUBLISHED April 11, 2021
KARACHI:

Like most everyone around the world, the past year has taken most Pakistanis for a ride. Forced to take drastic measures to control the pandemic, the country’s already ailing economy took a massive hit.

When a nationwide lockdown was imposed in March 2020, people were forced to reevaluate their daily practices, including those that applied to work or consumption habits such as spending on necessities like groceries. While the corporate world was compelled to reexamine work practices, Pakistanis, who had previously been on the fence bout online shopping, were now faced with either the choice of exposing themselves to the potentially life-threatening virus by stepping inside grocery stores or taking the road less travelled and giving online shopping a try.

As a result, the country saw a boom in online grocery shopping and changed the dimensions for many. Right now, there are dozens of businesses that are providing such services with most having their supermarkets as well as an online store and some specifically providing purely online services. Few new ventures also hit the market during this time and managed to use to pandemic in their favour to cash out.

Customer response

“I was so scared to step out and buy groceries as I have my parents at home who are above 50 and younger siblings as well. I didn’t want to be the carrier of the Covid-19 for my parents,” shared Asim Khan who started looking for options to order online grocery items to avoid going to supermarkets.

He also said that after being skeptical at first, using a phone app for the very first time, to be on the safe side he ordered just a few items for his first order. “I obviously can’t order everything but the major chunk of my monthly grocery is now covered by these services. I order via different platforms; few have a website, some are mobile application based and some of them just have a call centre or social media-based ordering techniques.”

Just like Khan, Muhammad Saleem, a senior citizen, has also opted to order online and prefers ordering his monthly groceries via mobile applications now. “People of my age were at high risk so my family stopped me from going out to buy groceries despite many markets implementing very strict of the SOPs. So I started ordering a few items of need and now I keep ordering everything. The service is easier as I don’t have to go out and don’t even have to carry huge heavy bags myself.”

However, while ordering grocery items such as flour, sugar, cooking oil, pulses etc is still very common, ordering fresh products such as meat, milk, fruits, and vegetables are still a far-fetched thing in the Pakistani household. Shaheen Naz shared how she can never rely on online services for fresh products. “How can I buy fruits and vegetables without checking how fresh they are? Same goes with meat too. I can’t believe how clean and fresh it is until I go and buy [the products] myself”.

Naz also added that the exchange policies offered by online services are not good in Pakistan. “Customers have to keep making calls and complaints, which is additional added stress and can be completely avoided if one sidesteps online ordering altogether,” she said.

Another customer who started using online ordering last year when the lockdown was imposed, was of the view that people in the country have trust issues for the past few years they have been facing different kinds of frauds through online scams. “I ordered a dress for myself worth Rs8000 and it was nowhere what was posted on the social media, so I guess with food items, expiration date, local copied products and all such issues are the reason why it is difficult to trust buying something without seeing it,” said Kiran Najeeb who has stopped buying her groceries online since the lockdown has been lifted.

 

Platforms in vogue

When the country was closed last year, the need was felt for a retail shop that can provide groceries to custumers on their doorstep. One such initiative is OctoberNow, which is a mobile application for online grocery shopping that provides household items at the lowest prices from nearby local stores.

CEO of the company, Hunain Ahmed while talking to The Express Tribune, said how Pakistan properly started investing and understanding the retail industry in 2018 while our neighboring countries were on it since 2012. For example, India started implementing these changes way back when Pakistan’s economic structure was still realising it. Sharing the whole idea behind the OctoberNow application, he said that it was to provide a platform where the economy can be documented and make the efficiency of products and services better since it is not in good shape in Pakistan.

The idea to launch OctoberNow, as the name suggests, came about in October 2020 as a result of the March lockdown, the whole country came to a standstill due to the Covid-19 pandemic. “We decided it was the best time to launch,” said Ahmed.

And how are people responding to his business model? “People are accepting this new way of grocery shopping. Initially, they had trust issues which is very much understandable, as online shopping in Pakistan is not upto the mark and many people have experienced fraud but with time and through maintaining a good standard of services, the customers started trusting us.”

Sharing how in lockdown their sales were the highest, Ahmed said that last year the sales kept increasing which was due to multiple factors. The main reason was engaging with customers, hearing their complaints and resolving them at earliest. “We also offered different programmes and discounts to build trust with the products. It is unfortunate to say it this way but the pandemic has helped a lot in establishing our market. Last year, in July, which was the peak of of the Covid-19 pandemic in Pakistan, was also the peak of our sales,” the CEO claimed.

OctoberNow uses two types of delivery riders: One, who are paid a fixed amount of salary, while the others get commission on several orders that they deliver.

A vast majority and a comparatively older generation are not as comfortable with such services yet however the trend is changing. Sharing how they cater to such customers, he said that orders for items such as meat, fruits, vegetables, milk, or yogurt are not very common but a specific number of customers do consider ordering fresh items.

“It has pros and cons, such as a lot of standard meat providers help in delivering fresh meat but the product rate changes in local area shops and that can sometimes cause problems as the amount changes on a daily basis. Customers can be very sensitive; when they demand fresh items they want at the lowest rate so what we do is we keep uploading recent pictures and rates, as well as offer exchanes, so the delivery can be as hassle-free as possible,” he said adding that with such changes, the whole perspective of shopping will change. “Even the lifting of lockdown has not affected our business and loyal customers are still availing ourr services.”

When Covid-19 hit the country, not only did it lead to the emergence of new businesses but older ones also amended their ways to provide services. People were scared of going out but at the same time, they wanted to make sure that they wouldn't run out of essentials so some started stocking up. With the lockdown, daily wagers were the highest affected amongst others. However, businesses, which were quick to adapt to the change, were able to survive: “During lockdown when services were halted, we repurposed our business models and introduced PandaMart and shops, added groceries, while ensuring safety hygiene standards and no human interaction,” shared Corporate Communication Officer of FoodPanda, Tooba Iqbal. Sharing the details of their expansion from food delivery to grocery delivery, she added, “We are now expanding to cloud kitchens, a delivery-only restaurant that has no physical space for dine-in. It relies entirely on online orders placed through our app. In the next quarter this year, we will also be experimenting with drone deliveries and will be testing out the concept in Pakistan.”

To a question about how the market is responding since the lockdown is lifted, she said that the lockdown situation is still pretty uncertain. “Even with the availability of the vaccine it can be seen that the country has been hit by the coronavirus variant in some regions due to which some provinces have imposed a lockdown again so whether things will ever get back to normal is still a far-fetched idea.”

“For Pandamart specifically, soft drinks, bread, eggs and meat are the highest sold items. When the lockdown began and indoor dining was closed, millions of Pakistanis staying at home were relying on Foodpanda for safer deliveries and to support its vendor partners, our company has waived off onboarding fees and commission for selected restaurants and home chefs last year,” she said. “To reach more customers in the most popular areas, the delivery radius was enhanced for a temporary period, to derive larger order volumes. To encourage higher revenue growth, marketing support and discounts were also being provided,” shared Iqbal.

Sharing about rider’s perks, she said that riders' earnings vary as per the distance and their performance. “On average, our full-time rider earn more than Rs.40,000 per month, apart from incentives and bonuses offered weekly,” she said.

Other than these businesses, a representative of Imtiaz Supermarket said that currently they are not offering online grocery shopping but that they are just providing home delivery services on orders placed through social media.

The CEO of HumMart, Faisal Qayyum also said that their business received an intial boom when the lockdown first happened but that for now, they have stopped offering their services.

 

E-commerce here to stay

In Pakistan, the e-commerce business is gradually rising and the market is beginning to accept it now. The trends and ideas have also drastically changed in the last year. “E-commerce was going to the hit the country no matter what. If we did not have to bring it this way it could have come another way. The system would have changed if not in 2020 then after few years but this is the future of supermarkets,” said Ahmed.

Talking about the challenges of being an online grocery provider Ahmed said that there are market challenges as well because of the type of grocery experience OctoberNow is providing. “We are only ones who we provide groceries even from your nearest grocery store,” he pointed out.

“Growth of online grocery or e-commerce in Pakistan is exceptional. One of the major reasons for that is that it’s convenient,” said Iqbal.

There is a lot of untapped potential in this market and more avenues can be explored and for any e-commerce business there are three major fundamentals in the growing e-commerce business. One is online payments - Pakistan is digitising very quickly with debit cards, mobile wallets, credit cards and the like. Second is the internet and mobile penetration. Pakistan is going 100 per cent on mobile and internet penetration with over 40-50 million 3G, 4G and broadband users. So that is quite phenomenal. Lastly, logistics are. “Pakistan is ready to absorb e-commerce, that is evident from the rise of online shopping. Pakistani people have already accepted and adopted online shopping as part of their lifestyle,” she concluded.

 

Each business has its ways of catering to customers and so does the online market. “The main target customers are mostly educated people or those who have internet access and know-how to use a smartphone so that they can order easily but we are expanding our services to ease out customer issues such as including card payment and online transactions as well,” said Ahmed.

 

Operating in a grey area

So what body regulates such online stores and businesses, and what happens should business violate those rules? According to Commissioner Karachi Navid Ahmed Shaikh told while talking to The Express Tribune, “There is no provision of any provincial law available for regulating online businesses. At the federal level, there is Prevention of Electronic Crimes Act, 2016, and the National Response Center for Cyber Crimes (NR3C) of FIA, which is mandated to implement this legislation while Home Depertment has issued directions for online sales during Covid-19.”

 

While appreciating the online grocery shopping trend during Covid-19 and lockdown situation, he pointed out that from the administrative standpoint in times of pandemic, it’s a very positive trend and it should be encouraged.

Commenting on what regulatory authority is in a better place to take action against such business if they violate any laws or if any citizen lodges a complaint against fraud, Commissioner Karachi said, “The National Response Centre for Cyber Crimes and FIA are the ones who deal with such cases as we do not have any such law in place.”

Shaikh also shared the notification and rules which were formed after the lockdown to ensure the delivery services are following proper Covid-19 SOPs. The notification, which dated back to April 14, 2020, listed around 49 business who were delivery-based and asked to operate only under certain conditions. The document lists 16 conditions under which delivery can be allowed.

Few of those conditions for instance stipulate that only registered riders should deliver items. The riders should always wear a helmet and uniform to differentiate themselves in public. Riders from courier companies must always carry valid ID card from companies on their persons while making deliveries, all riders must also masks and gloves, and maintain social distance. The document also advises minimizing of cash handling and receipts. The permission for these businesses is also likely to be cancelled if violations are seen.