E-commerce, which was considered an alien term for the masses a few years ago has now become a common practice for the retail industry in Pakistan. However, despite its popularity, the online retail industry is undergoing serious supply chain and logistics issues.
Online retail sector is currently facing challenges of logistics, timely supply of authentic products and limited payment methods. Consequently, these issues lead to incorrect product distribution and delay in delivery to the end consumer. Renowned retail brands are putting serious efforts to streamline this process; however, lack of infrastructure is creating issues at both ends.
Despite the growing craze of online shopping, many large to medium size retailers are still comfortable in physical sales. As a result, they consider online selling as a second option. Hence, it enables them to prevent the risks and challenges attached with this mode of retailing.
According to the statement given by Yousaf Jamshed, the CEO of Retail Leaders Conference:
“Vendors customer support service and product delivery is weak even for some big groups. Many times the end customer observes a price difference and huge delays in product delivery; especially on special days like Black Friday”
Still a Long Way To Go…
Online shopping has become the need of the hour as most of the convenience-driven customers are inclined towards this medium. Pakistani youth caught this fever a few years ago with large retail brands promoting many local and international events online and putting huge discounts to grab customers.
The much talked about Black Friday sale by Daraz.pk became a benchmark for others to follow. However, there were numerous complaints regarding wrong and poor quality products due to structural issues of the industry.
Although e-commerce growth is substantial in Pakistan but it is still a fraction of the industry, taking a share of less than 1 percent. According to the data calculated by Planet Retail, total retail market of Pakistan touches $152 billion with online industry standing at less than $100 million.
Challenges Hampering Steady Growth
The CEO of Daraz Asia, Jonathan Doerr shared his views while stating that the supply chain of the online market needs special attention. Other major challenges include expensive logistic charges and vendor-retailer relationship.
Medium sized retailers are working hard to improve their timely delivery as this is the leading factor of customer satisfaction. However, they have to pay additional charges to the logistics companies.
Another retailer, Danish Haq expressed his views by stating:
“We are satisfied with our product delivery mechanism. However, logistic companies divide the county in to different zones and charge us accordingly”
Furthermore, these companies have made price slabs through which they can charge collection and insurance fee for products above a certain price.
Fahad Shakeel, the GM of Nextbridge Private Limited said:
“Normally, vendors don’t have insurance on their products and cash-on-delivery has several issues”
Talking to a local news outlet, he also added that many small and medium shipping companies are incapable to ship fragile and expensive products which lead to ineffective product handling and losses for the retailers.
How do you see the future of e-commerce in Pakistan in the coming years?