Analysis

The Dark Side of E-commerce in Pakistan

Pakistan is clearly a shining economy and we all heard the news when it was titled as the “most under-rated economy by Bloomberg. The technological landscape in Pakistan is seeing new horizons and our stock market has been performing fairly well since a few years.  However, these statistics are set to change with the recent technological advancements being experienced in the country especially in the e-commerce sector.

Studies indicate that the number one e-commerce Website in India Flipkart recorded a $1 billion rise in fresh investment which saw the organization handle 5 million shipments every month. In addition, Flipkart is taking advantage of the expanding use of mobile shopping. In the recent past, the website directors have stated their desire in making a grand transformation in the mobile e-commerce industry.

Pakistan, on the other hand, is the home of various e-commerce giants like Daraz.pk, homeshopping.pk and Yayvo that have started to highly benefit from the introduction of reliable internet in the country. Where and how things start to roll for them, have a look!

When we saw the emergence and penetration of Internet!

The emergence of reliable and fast internet connection has had a positive impact on how people engage in e-commerce. In Pakistan, the rate of internet penetration sky-rocketed with the launch of 4G/LTE network recently. It is expected that Internet usage will grow exponentially from the current 30 million to over 56 million users by the year 2019. These statistics are a clear indication of the imminent success of online retailing. The fact that the millennial will have easy access to reliable internet connection means that e-commerce will escalate further.

And the success stories began!

According to some sources, last year Black Friday was marked as a benchmark in the e-commerce history of Pakistan. Leading websites like Daraz & Kaymu’s revenue surpassed Rs.1 Billion; Yayvo.com exceeded 60,000 orders and other websites like HomeShopping, Symbios, and Shophive participated enthusiastically as well. The event set a milestone for e-commerce and it witnessed leading payment merchants creating partnerships to boost the sales. To mention some, JazzCash & EasyPay were the two leading from the front.

Then there is a plethora of events where we’ve seen e-commerce stores creating hype and people do take benefit from it. All the leading banks have started to help push pre-payments by offering additional discounts to their Credit and Debit cards. This in itself, is a success story in a country like Pakistan where Cash on Delivery method accounted for 90% of the sales in past years.

The Dark side of E-Commerce in Pakistan

While there seems to be so much untapped potential in this industry, it is evident that there is a dark side of e-commerce in Pakistan where customers are ranting over many issues continuously. There are many obstacles that lie in the way hindering a smooth running of this industry. The information technology industry needs to do more to ensure that e-commerce is propelled towards the right direction. Perhaps they can begin by laying down regulations and rules by which the industry players can operate. While speaking about the importance of e-commerce a few years ago, the Information Technology and Telecommunication Minister of State in Pakistan reiterated that the country could not afford to compromise the paramount role that e-commerce has played. She went ahead to state that it was the main bridge between financial institutions, business merchants, and websites.

On the customer side, Let’s delve into the obstacles that stand in the way of prosperity in the e-commerce industry.

1.      Customers think that low-quality products are being sold

Building a successful e-commerce store is highly dependent on product quality. People who manufacture their own products should ensure that they meet customer expectations. There should be laid down procedures that cater for excellent customer service and product return policy. Ensuring that customers have an enjoyable experience is an important factor in e-commerce.

Many customers would easily ignore products just by reading their country of origin. While this may seem like a non-issue, it can highly affect an e-commerce dealer’s reputation. Many customers would be hesitant to invest in low-quality products. Remember that in this era of increased Internet usage, e-commerce dealers should strive to offer quality products that live by their descriptions. This plays a huge role in preventing negative user reviews which can have a negative impact on sales.

2.      They say that high prices are being charged

The customer knows his game. He searches multiple websites and even neighborhood markets before making purchases. In online shopping, different e-commerce stores stock the same products for different prices and of course, customers always want to purchase reasonably priced items. In this quest for comparison, many websites fail to give a better price.

In order to ensure that e-commerce websites stay afloat, it is important that the industry is regulated and tough measures put in place to ensure that dealers do not compromise on charging fair prices.

3.      They say that they don’t get the best Customer Service

In this era of social media, businesses run on reviews hence customer service remains the most important aspect for the success of e-commerce. Customers leave product reviews depending on their experience. E-commerce store owners should recruit qualified and experienced staffs that are able to handle customer problems to their satisfaction. Also, dealers should work on their customer experience by providing good quality products and improving their product return policy. Remember, in today’s increasing lack of face to face interaction, customers need to be assured of ultimate fulfillment or else they have a huge ground to complain and put your business image in turmoil.

4.      They are still not comfortable with payment methods

Customers are still afraid to use online payment as a mode of transaction. They hardly give their credit card information on the Internet to buy items. As of some recent stats, over 72% of Internet users in the US are digital shoppers and in contrast, only 3% of Pakistani Internet users have purchased items online.

Also, in this era where hackers thrive online, e-commerce retailers should invest in having a secured payment method to ensure both the customer and the retailer do not fall into the hands of con people.

5.      They say they’re afraid of Counterfeit Products

This is the most alarming issue people have been facing for quite a while. Deciphering a genuine product from a counterfeit one can be difficult. With the increasing presence of counterfeit products online, e-commerce stores should come up with stringent rules to ensure that their customers do not fall victim. This can be detrimental to their businesses. Various successful stores such as Alibaba are going out of the way to curb the sale of fake products.

Apart from these few mentioned issues, people also suggest some improvements in the websites. Some of them are the lack of comparison tools on the website, bad search features, and fragmentation.

Conclusion

The above obstacles present a huge challenge especially to start up e-commerce platforms. Dealers can easily work towards improving customer experience by carrying out extensive research. Borrowing ideas from successful e-commerce ventures can give them an overview on how to improve their businesses. With the arrival of multiple international brands like Fashoq and Alibaba, we are going to witness an era where e-commerce will be the MOST thriving industry in Pakistan.

5 Comments

5 Comments

  1. Leenah Nasir

    21/07/2017 at 6:21 pm

    Oh boy … Thank you for putting this down. The dark side of the e-commerce stores gets sinister at the customer service front. And the most crucial bit of the customer service is about ensuring the the efficiency of the logistics part.

    In a recent personal episode, I have learnt my lesson never to book an order at Homeshopping.pk at least. As has been the exhibit, the idea of commitment, of timely delivery of products, is too lofty a standard for the local stores to maintain.
    How often do you get to listen to a professional e-commerce store saying that they have delayed the shipment by two days since it rained in the city one day?

    Cheers for pointing out the system loop holes. Hope the concerned pay heed to it.

    • Hira Saeed

      31/07/2017 at 12:49 pm

      Thank you for the appreciation, Leenah. Customer service at all the leading e-commerce stores is a nightmare. I am so sorry to hear about your story. This tells a lot about the loop holes I mentioned.

  2. Irfan Ahmad

    21/07/2017 at 9:00 pm

    Its very relevant article to my business and i am going to show some of views of my business.
    I have technical eCommerce business which deals in Educational Electronics components, tools and parts .

    Its seller responsibility to educate customer about quality and price using text , images and video if possible.
    90% people come online when they are not able to find their goods nearby them.
    As seller we also face too many problem .
    Most of the time people don’t even know what exactly they need.
    Its very difficult to prove everyone’s level that how too use this product
    Some time people buy wrong product which does not match with their requirement and ask for return.
    In this kind of business seller and buyer both should be technical .

    I am trying to do totally new kind of business and learning culture .
    Physics is knowledge , Technology is implementation of knowledge and ELECTRONICS is brain of technology.
    I have plan to contribute my best and serve with what i have best which is Electronics (brain of technology).
    Here is my website
    http://WWW.HALLROAD.ORG

    • Hira Saeed

      31/07/2017 at 12:49 pm

      All the best for your store. Checking it out!

  3. Kaiser

    03/05/2019 at 11:23 pm

    Totally agree with you. Last year, for the first time I ordered an item from a famous online store. My order arrived late (delivered after 2 weeks), the actual product was nothing like anything shown on the website. While discussing this issue with my friends, I realized the someone has to step up and gain confidence of early birds. So, I started a small organized online business to kind of create a competition and show to big sharks that these challenges can be easily solved.

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