InsiderIntelligence predicts global internet sales reached to 19.5% in 2021 from 13.9% in 2019.
The State Bank of Pakistan reports a 76% increase in registered e-commerce merchants from 2019-20 to 2020-21.
In Pakistan, B2C companies rule e-commerce.
Groceries/quick(q)-commerce, and fashion.
Foodpanda and Airlift are the two biggest firms in Pakistan’s most competitive current market. For major cities, both corporations have adopted the dark shop strategy, which needs a small number of SKUs to be strategically distributed throughout different neighbourhoods. Munchies is a newbie to the dark store concept in Karachi.
The dark store concept requires huge upfront cash expenditures, hence the large hikes. This market is crowded with huge retailers (Carrefour, Al-Fatah, Metro) and start-ups (Grocer app, Hum Market, Cheetah, Bykea).
People in Pakistan don’t trust online shopping, hence most items are paid for using cash on delivery.
And yet, there is a fundamental question. Is Q-commerce feasible in Pakistan? A slower pace of life in Pakistan. For the wealthy, shopping is a way to get out of the house because leisure activities are scarce. Due to startup funding and concentration on obtaining customers, clients are using services immediately. But will they be sticky and loyal?
As a result, many major retailers have huge internet presences, and some execute limited quantity drops that sell out in hours. Also, some companies buy goods from local factories and sell it online (ExportLeftovers as a prime example). Clicky.pk and Buraqstore are vying for a larger multibrand store.
These are worldwide fashion trends that have yet to catch on in Pakistan. Unilever-backed Secret Stash wants to build a local version of TredUp.
Rent It allows clients to rent designer outfits. In the US, Rent the Runway, for example, offers a monthly subscription of designer clothing.
Daraz is the largest e-commerce player and has no direct competition. Daraz, founded by Rocket Internet and acquired by AliBaba in 2018, has been heavily promoting e-commerce through annual sales days, sponsorships, and most recently by streaming the T20 World Cup for free. Infinite options and speedy delivery are Daraz’s goals.
But it doesn’t address the company’s main problem: brand trust. A video of Gilgiti kids unwrapping a Daraz drone went viral last year due to a fake listing and an empty box. Many Daraz users have felt this way at some point. Sitejabber ranks it 168/468 marketplaces for trust, according to Trustpilot.
With DarazMall, only established brands sell to customers. After Daraz, OLX Group launched OLXMall in November 2021.
Most Pakistanis distrust e-commerce so most online orders still need cash on delivery.
The obstacles to increasing e-commerce in Pakistan are clear: digitize payments, improve last-mile logistics, and allow refunds and returns.