ISLAMABAD – Pakistan, with exponential growth in e-commerce activities overpast few years, has witnessed Rs40.1 billion sales of local andinternational e-commerce merchants in year 2018.
An encouraging growth of 93.7 per cent has been registered in e-commerceactivities as sale was Rs20.7 billion in Fiscal Year 2017.Lured by lower transaction costs, convenience and expanding internetpenetration, both enterprises and consumers have started shifting theirtransactions online.
Thus far, business-to-consumer (B2C) side of e-commerce has been mainbeneficiary, though investments are underway to kick startbusiness-to-business (B2B) e-commerce on a large scale as well.
As per State Bank of Pakistan data, the sale data of e-commerce only coverstransactions made via digitalchannels (credit/debit cards, interbank funds transfer (IBFT), prepaidcards, and mobile wallets).
“If we go by market estimates, the share of digital payments is about 40percent in total e-commerce transactionsby value. For FY-2019 and FY-2020, a YoY increase of 25 per cent in digitalsales is expected,” a financial services experts said on Sunday.
This is important to note, market estimates put share of postpaid Cash onDelivery (COD) settlements at around 80 to 90 per cent of total volume, andabout 60 per cent of total value of e-commerce in Pakistan. Theextrapolating accordingly, the figures for total e-commerce activity inFY-2017 and FY-2018 may have touched Rs51.8 billion and Rs. 99.3 billionrespectively.The expert said digitization of commercial activities holds potential toreduce transactional costs for businessesand consumers. A key enabler of this phenomenon is the concept ofdisintermediation and reintermediation.
A conventional exchange would involve multiple agents such as producers,transporters, wholesalers, retailers, and consumers.E-commerce, however, allows possibility to bypass middle parties, thereby“disintermediating” the process andallowing direct dealing between a buyer and a supplier.
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He said in Pakistan, leading producers of apparel, smartphone, food, andelectronics industries now have a one-to-many online “e-retailing” channelin place.However, the more popular and established model of e-commerce is the onlinemarketplace system.
Online marketplaces are platforms that allow transactions and dealingsbetween multiple buyers and sellers. Reducing search and contractual costsfor the parties due to computerized systems and common digitalinfrastructure, they help increase efficiency by allowing swifttransactions and providing co-sales services such as data analytics andpayment platforms.
In other words, the expert said they become new intermediaries betweenproducers and customers, except thistime the “reintermediation” results in an overall improved experience forthe parties involved.He said in Pakistan, most of the major e-commerce players are either onlinemarketplaces for goods-such as Shophive, Daraz.pk (for consumer electronicsand apparel, etc.), and FoodPanda (for food delivery)-or onlinemarketplaces for services via immediate delivery -like the ride -hailingplatforms Careem and Uber.Then there are online information and financial intermediaries -orinfomediaries, as they are often called –
like PakWheels (for automobile sale and purchase), Rozee.pk (job huntingand recruitment), and Zameen.Pk (real estate business). These channelsserve to fill information gaps and mostly earn profits throughadvertisements,contract making, and commission fees. – APP
