Despite the Pandemic, E-commerce industry in Pakistan has grown

E-commerce industry of Pakistan

Keeping in kind that the pandemic has affected a lot of industries and businesses all over the world, to our surprise it has been estimated that one industry in particular has expanded to a Rs. 234.6 billion in the financial year 2019-20, showing a growth of 55.5 percent on a year-on-year basis, according to a report published by the State Bank of Pakistan (SBP). This particular industry is of course the E-commerce industry of Pakistan that has really taken advantage of the conditions posed by the modern pandemic. 

The transaction of the e-commerce comprises mostly upon the Cash-on-Delivery (CoD), which was able to rake in about Rs. 140.7 billion and conversely, payments made through  digital means was able to generate Rs. 93.8 billion. In contrast, the reduced working hours and restricted mobility made it all the more challenging and hard for people to be able to gain insight in to avenues such as general stores and shopping centers. Furthermore, many consumers all over the country shifted towards an e-commerce approach, mainly because the authorities allowed logistic services to operate under the standard operating procedures (SOPs).

In addition, various brands and stores all over Pakistan have in turn shifted to or adopted a system of e-commerce platforms for providing their services to customers, while insuring the COVID-19 SOPs are followed when delivering the products to people. In contrast, this shit towards an E-commerce approach was something which the overall E-commerce idustry was not ready to handle all of a sudden, mainly because of the surge in the customer demand because of the COVID-19 crisis.

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For this reason, , many orders were reportedly canceled, and refunds were either not processed on time or had been delayed. It is also worth noting here that the digital payment-based orders are processed using  a pre-payment model as opposed to a post-payment model in the case of COD, customers have swayed away from the payments and towards a cash settlement, as they were able to minimize the overall risk by holding the payments until the order was formally completed by the company.

On the other side, most of the existing non-retail e-commerce players with digital payment options also had to suspend their operations due to restrictions in major cities. It is also worth noting that in the last few years or so, the E-commerce industry of Pakistan has seen a very impressive growth. It is because of an increase in digital penetration, lower costs, and increased awareness about E-commerce platforms which have in turn played a significant role in helping the market expand significantly. This has led to  to a significant shift in consumer purchasing patterns over the years.

Furthermore, the focus of e-commerce platforms on providing a much more efficient and excellent customer experience through the feeding and rating mechanism which has helped build customers trust while also forcing sellers and vendors to improve the overall service delivery and the quality of the final product that is sent to the customer. Cash on delivery has been the main mode of payment and the use of debit and credit cards and IBFT has also played a big role in increasing volume and value terms during this period.


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