4 Core Challenges for E-commerce in Pakistan and their Apt Solutions

The international economic and political scenarios affect most countries and their economies suffer as a result. The same is true for Pakistan, as it is affected by various factors. The war in Ukraine is one, as global food prices has escalated astronomically, especially that of wheat. Also, the drought in Australia, some parts of North America, and Europe will aggravate the situation. Recently, India also backed out of exporting wheat for some time and the recent floods made the situation worse for the country.

E-commerce can help companies reach their target audience efficiently. Products like a new phone, like the new model of renowned companies like Pixel 6 and the iPhone 14, by Google and Apple respectively, are highly anticipated irrespective of the economic turmoil. But the e-commerce scenario in Pakistan is quite different as it faces many challenges and problems.

Please go through this blog as I discuss four problems that the companies in Pakistan face in marketing their businesses on the Internet and their solutions.

Not Enough Skilled Workforce

The lack of a skilled workforce is why e-commerce companies face issues running their operations and expanding their business. How can a software company offer its services to its clientele without people who know how to fix errors or make a killer app? Or a consulting firm provides immaculate marketing strategies to a startup?

There are around 140 universities in Pakistan and several thousand institutes providing skilled individuals to the e-commerce industry in Pakistan. But the enormous growth requires skilled workforce rather than just young people having know-how of social media. So what’s the remedy then?

This is the government’s responsibility to make every effort to give private sector to offer support to the young lot. This can pave the way for millions of people to start working on e-commerce projects that can reap billions of dollars.

Lack of Several Big Players in the Market

The lack of several big players has created a monopoly for the most prominent company, in  Pakistan that is Daraz. With new players entering the market, it will be a boon for the economy. As a result, Daraz will face stiff competition, and the consumers will benefit from better prices and the availability of various products. Imagine Amazon.pk, offering its complete services in Pakistan, just like in the USA, UK, or Japan. Chances are bright, so that we can anticipate Amazon in Pakistan anytime.

Good and healthy competition is required for businesses to flourish. Monopoly is not good as consumers suffer due to limited choice. In the coming years, the scenario is looking to change considerably. Several new players are looking to steer the e-commerce scene in Pakistan towards prosperity.

Products and Services that Can Lead the Revolution

One can find several small players making a mark in the industry. Still, the real challenge is how several products and services providing options for SaaS-based products like Webx are working hard to disrupt e-commerce in Pakistan and make it accessible to everyone. But the general perception related to e-commerce is not favorable. Still, it is not the preferred way of shopping even though it is the most hassle-free way.

The scenario is changing rapidly, with hundreds of thousands of freelancers working diligently to earn pocket money or make a living. Freelancers are also launching their businesses and helping out the e-commerce scene. And pretty soon, they will launch their startups and companies.

Low Share of E-Commerce in Pakistan

In an interview in November 2021, Daraz’s CEO said that Pakistan’s e-commerce constitutes only two percent of its retail market. According to him, Pakistan has the potential to reach over 50 million customers using e-commerce services by 2026. The need for digital literacy is the key so consumers are compelled to use e-commerce rather than traditional brick-and-mortar stores.

According to the latest stats, more than 88% of Pakistanis have access to the Internet and broadband services. But still, not many are willing to use e-commerce services. Online fraud, especially the data leakage of banks and financial institutions, is one of the reasons. These issues are present in other countries, too. Still, Pakistan seems to be the target of these activities and scams more often. Recent episodes have left many companies wondering whether e-commerce will be lapped up by consumers in Pakistan or not.

Final Word

The e-commerce scene in Pakistan is ripe, and the future is bright. In 2021 alone, Pakistani startups secured more than 350 million dollars worth of investment. More than 250 startups have been initiated since 2015, and several hundred are about to start. But the problems and scenarios mentioned above are real, and there are chances that some more will spring up in the coming few years. But the overall scenario is favorable as more startups like FastTech Media, TechKnowable, Bazaar, Qisstpay, and Sehat Kahani have made it big in recent years.

What’s In Store for Pakistan in the Future?

The political turmoil and uncertainty are not suitable for any industry, which is also valid for e-commerce. Even big business houses and multinational conglomerates find it tough to stay in the green as customers don’t want to spend too much other than necessities. That makes it challenging for businesses, but there is always a silver lining at the end of the tunnel.

According to Faisal Aftab, CEO of Zayn Capital, Pakistani startups could be worth 50 billion dollars by 2030. That’s a great stat and one that could motivate Pakistani youth. With over 60% of the population within 15-29 years, it is destined for a great future. Webx Ecommerce believes that the e-commerce market in Pakistan can double in size in the next three years. This is exciting and challenging as the market will be flooded with young aspirants looking to make a mark for themselves.

Over to you

What is your take on this issue, and what do you think will happen in the next few years? Are you optimistic about the future or have some reservations? Either way, you are welcome to add your bit. And if you have found anything confusing in this blog, feel free to ask any question. For any concerns, please use the comments section below and I will get back to you.