The E-commerce industry in Pakistan has grown exponentially in the last few years. Pakistan currently stands second in terms of the online market in South Asia. Keeping in mind the growth potential, the future of online shopping is quite bright in Pakistan. According to a report shared by the State Bank of Pakistan (SBP) in 2017, the e-commerce industry saw remarkable growth, with a 260% increase in online merchants.
In 2018, Pakistan’s e-commerce sales reached $1 billion. Last year it was even better with total sales exceeding $2 billion. With a big young population and more than 30 million internet users and 9 million smartphone users, Pakistan certainly has the potential to become an e-commerce giant.
E-Commerce Industry and Market Shares in Pakistan
As far as statistics are concerned, Punjab being the most populated province holds 55% of the market share when it comes to online shopping. Sindh is next with 36% followed by Khyber Pakhtunkhwa and Balochistan with 5% and 2% respectively. Azad Kashmir also has a 2% share when it comes to online shopping in Pakistan.
If we look city-wise, Karachi leads the way with a 24% market share followed by Lahore with 17%. Islamabad and Rawalpindi combined sit in third place. Pakistan’s e-commerce industry has huge growth potential in cities like Multan, Sialkot, and Hyderabad.
What are customers buying?
Recent trends have shown that Pakistani online buyers are more inclined to buying these three categories which include mobiles and tablets, electronic appliances, apparel, and accessories for both men and women. In terms of units sold Fast mover consumer products (FMCG) has been the most popular since 2019.
Covid-19 and E-commerce Industry of Pakistan
Where this pandemic has slowed many businesses around the world but it has certainly created an opportunity for the e-commerce industry. Similarly in Pakistan, online sales have increased drastically. Overall, an increase of 40% has been seen during Covid-19 and trends suggest that it will continue to rise ten-folds in Pakistan.
The demand for hand washes, sanitizers, and gloves has increased drastically as people are trying to combat the virus. Sales of fruits and vegetables have also increased with people being reluctant to go out for groceries due to lockdowns and safety measures. An online store in Pakistan saw an eight-to-nine times increase in their grocery products. Many other clothing brands like Gul Ahmed, Khaadi, etc. which were selling online have also started focusing on their online stores.
At the start, there was mistrust among the Pakistani population regarding online shopping. Most people preferred going to stores and market places for their needs. But in recent times, there is a clear change in that pattern. Cash on Delivery has been a major reason in assuring the buyer about the product and then pay. Bank transfers and Easy Paisa are also being used readily for online purchasing and selling.
The small and medium enterprises (SME’s) have grown massively in Pakistan showing an entrepreneurial mindset in the country. At present SME’s account for a major chunk of Pakistan’s business economy and GDP. They are not only providing jobs but also increasing online activity in the country.
There are many online shopping stores in Pakistan and the number is increasing day by day. The sheer size of Pakistan’s working class is a significant indicator of its e-commerce success as it paves its way in becoming a key player in the global arena.