Shops' sales drop as e-commerce thrives

Traditional businesses face plummeting sales, while online shopping surges with aggressive discounts


GOHAR ALI KHAN November 30, 2024
Income tax collection was about Rs335 billion more than the target, offsetting the impact of missed sales tax and customs duty targets. photo: file

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KARACHI:

Small traders and shopkeepers remain distraught as their sales have plunged by 70% and continue to decline due to the economic instability following political turmoil. However, when it comes to online shopping, e-commerce sales have been rising steadily, bolstered by aggressive sales campaigns such as Blessed or Big Friday, 11.11 sales, and others offering significant discounts for limited periods.

Expressing grave concerns over falling sales, All Karachi Tajir Ittehad Chairman Atiq Mir said that markets and bazaars in Karachi have witnessed a 70% drop in sales compared to the previous year. He attributed this decline to multiple factors, including runaway food inflation, unbearable energy tariffs, decreasing incomes, increasing taxes, and overall political and economic instability.

He lamented that 80% of traders and shopkeepers are now unable to afford electricity bills, workers' wages, or shop rents. Meanwhile, he accused the government of celebrating an artificial rise in the Pakistan Stock Exchange (PSX), borrowing excessively, and presenting misleading economic indicators while the real economic situation continues to deteriorate in Pakistan's financial hub.

Mir appealed to policymakers and the Pakistan Army to intervene, calling for reduced energy tariffs, curbed inflation, job creation, and immediate measures to end political and economic instability. He also demanded stricter controls on the artificial price hikes of essential goods such as meat, milk, fruits, and vegetables, alongside the eradication of corruption and inefficiencies in government departments.

Alliance of Arambagh Markets Association Chairman Asif Gulfam remarked, "It is really a tall order to do business in the current economic scenario where uncertainty plagues buyers, sellers, and investors—the main pillars of any business. Everyone is agonised and looks askance at the deteriorating situation of the country, hoping for the best."

He noted, however, that e-commerce is gaining momentum day by day, despite some scams, as a growing number of consumers turn to online shopping. Gulfam highlighted that over 350 online shops in Saddar operate with their own delivery riders, ensuring efficient home delivery of products.

E-commerce is a more mature market in the West, where the festive shopping season begins on the last Friday of November when customers start stocking up on Christmas gifts. In Pakistan, online retail is fiercely competitive but distinct from traditional markets. Consumers increasingly find last-minute deals as retailers compete on price, timing, and transportation savings.

According to the Daraz spokesperson, "11.11, first known as Singles' Day in China and later evolved into the world's biggest shopping festival, was introduced in Pakistan by Daraz in 2018. Since then, it has been our biggest sale of the year, offering discounts of up to 80% on over 10 million products. This year, over one-third of all orders came from non-metro areas, demonstrating how e-commerce is breaking barriers."

She added that consumers in smaller cities and rural regions are gaining access to products from sellers across the country which were previously out of their reach. At a time when many still feel the impact of high costs despite slight inflation relief, 11.11 provided an excellent opportunity for consumers to maximise their savings.

"Our mission is to make shopping more accessible, rewarding, and inclusive for all Pakistanis," she concluded.

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