E-Commerce growth:sale value reaches Rs. 100 bln mark.

ISLAMABAD -- Pakistan has witnessed reasonable growth in e-commerce activities over the past few years as sale value of industry was on rise and reached Rs. 100 billion mark.

Lured by lower transaction costs, convenience and expanding internet penetration, both enterprises and consumers have started shifting their transactions online but country still lags behind regional and comparable economies in terms of digitization of its payment systems and efficiency of its logistics environment.

The issues related to e-commerce have been persistent despite increase in its adoptability among the masses and consistent penetration in coverage areas.

The industry could move at much faster peace if these issues are fixed on long-term basis by industry players and other stakeholders.

A recent report on e-commerce has identified some weak areas of this industry and highlighted how accelerated growth could be achieved while addressing issues related to the industry, which will also benefit economy at a large scale.

According to SBP, the sales of local and international e-commerce merchants reached Rs20.7 billion in 2017 and Rs 40.1 billion in 2018 - an encouraging growth of 93.7 per cent.

However, the data only covers transactions made via digital channels (credit/debit cards, interbank funds transfer (IBFT), prepaid cards, and mobile wallets).

The issues that Pakistani e-commerce industry needs to focus on include: longer delivery times which are often cited as a major deterrent to wider adoptability of e-commerce channel.

Delivery times are usually affected when either third party logistics partners fail to deliver on time, and/or inventory management systems of sellers prove inadequate to fulfill flexible needs of electronic channel.

The other issue is online payments. The absence of trust in online platforms and inadequate implementation of consumer protection laws pertaining to e-commerce, amid an already low digital literacy environment, become a deterrent to rapid digitization envisioned by policy-makers and industry players.

In particular, consumers tend to be hesitant when transacting using online channels, as they worry that their personal information (such as credit card number, bank account number, address, etc.) may be leaked or misused by unauthorized persons.

Lack of awareness is another issue and still, approximately 90 per cent of e-commerce transactions in Pakistan are Cash on Delivery (COD) due to multiple reasons. From consumer side, a...