Pakistan’s eCommerce market has witnessed remarkable growth over the years. The 2023 eCommerce revenue is expected to be US$5,784.00m. Of course, it is far from the potential that the country has provided that the right policies are enacted and implemented. So, what does the future hold for the country’s eCommerce market? As the leading eCommerce development company in Pakistan, here are our views regarding the top trends and predictions for Pakistan’s eCommerce market in 2024.
Future of eCommerce in Pakistan
1. Inflation Pressures
Unfortunately, inflation is at an all-time high. The challenge is not unique to Pakistan, as every country grapples with record-high prices. As a result, individuals find themselves in a position where they have less money to spend on non-essential items. Hence, it is argued that Pakistan’s eCommerce market will not grow as expected. It can be disastrous for eCommerce store owners already enduring challenges such as import restrictions and the high cost of doing business. The average revenue per customer is already declining, as highlighted in the image below.
2. International Focus
With the rupee hitting an all-time low against major currencies, buying products from abroad is financially draining. However, with successive governments focusing on promoting the local industry, we might see Pakistani online stores target the international audience. It will help the local stores expand their reach and bring much-needed foreign exchange to the country.
3. Smartphone Shopping
With the mobile penetration rate increasing throughout the country, the share of smartphones for online shopping will increase. It is in line with global trends. However, the conversion rate for smartphone users is much lower than for desktop users. Therefore, Pakistani eCommerce stores need to focus on improving the user experience for mobile users. Otherwise, they will not benefit from the increasing mobile penetration rate.
4. Digital Payments
Pakistan’s eCommerce market is mostly cash on delivery. There are several reasons for this, including the low level of trust. Buyers don’t trust the sellers and opt to check the delivered product before the payment. However, digital payments are picking up steam. Raast is the latest digital payment mechanism in the country. Digital payments can increase the size of the eCommerce market and benefit the economy simultaneously. According to McKinsey and Company, digital payments can add 7% to the country’s GDP.
5. Increased Focus on Logistics
The success of eCommerce depends upon the logistics. Unfortunately, Pakistan’s logistics sector is quite outdated. The positive development is the emergence of several startups focusing solely on improving the logistics sector. One such startup is Truckistan Technologies. With technology finally penetrating the logistics industry, eCommerce store owners can target a wider market.
6. Live Selling
Sellers rely upon various marketing activities to interact with their target audience. There has been a noticeable change in marketing activities in the past few years. Sellers are realising that customers find live selling more trustworthy. Thus, they are using live selling to market their products. According to Pakistan’s biggest eCommerce store, Daraz, 1.2 million orders on the platform were influenced by live selling.
7. Economic Downturn
Unfortunately, an economic downturn remains a reality. Daraz has already reduced its workforce in the Indian subcontinent by 11%, citing market conditions. If Pakistan’s economy does not fare better in 2024, one can expect another round of layoffs. The problem with layoffs is that it doesn’t just impact the employers but also the customers. Delivery times increase while customer complaints take longer to resolve due to low staffing.
8. Focus on Electronics
The past data shows that electronics, followed by fashion products, generate the most eCommerce revenue.
Over the coming years, this trend will not change as both will continue to account for the majority of eCommerce sales. Therefore, individuals considering setting up an eCommerce store should opt for these two niches.
9. Intense Competition
Pakistan has very few well-established eCommerce stores. The majority are operated by those who enter eCommerce to establish a side source of income. Due to high inflation and other economic challenges, people need an additional source of income more than ever. Thus, Pakistan will see an increase in the number of eCommerce stores.
However, it brings numerous challenges, including declining trust levels among customers. With so many eCommerce stores, customers would find it challenging to discern between a reliable and fraudulent eCommerce store. A bad experience can dissuade them from shopping online again. It will further reduce the revenue of eCommerce stores.
10. Inadequate eCommerce Laws
One that won’t be changing anytime soon is the government’s lack of interest in regulating the eCommerce sector. Pakistan’s first eCommerce policy was devised in 2019. Although ambitious, it has never been implemented, hindering the country’s eCommerce growth. Secondly, the country lacks robust consumer protection laws along with consumer privacy. In case of fraud or any other problem, consumers have no recourse. If Pakistan is to truly realise its eCommerce potential, it must focus on enacting laws that help the eCommerce sector thrive.
These are the top 10 eCommerce trends and predictions for Pakistan in 2024. The future of e-commerce in Pakistan in 2024 holds considerable potential. With the right strategies and investments, online store owners can tap into a growing market of tech-savvy consumers hungry for seamless online shopping experiences.