5 factors negatively impacting e-commerce in Pakistan

E-commerce is growing massively in the sub-continent. While e-commerce has been able to capture a fair chunk of the Indian market, Pakistan is still lagging behind in the race. E-commerce boom in India happened roughly around 2011. Not only the big giants like Amazon and Flipkart, but many small online shopping websites also emerged and milked from this industry.

Pakistan is progressing in e-commerce, and by 2020 it is expected to grow up to $ 1 billion. Online payment gateways are also emerging, primarily for e-commerce. However, online shopping brings in a lot of challenges which needs to be addressed by the players of the e-commerce industry. I have listed a few of the critical factors that can have negative impacts on an online business.

  1. Investment

E-commerce requires hard work along with an abundance of patience for growth and profit. Investors often look up to fast growth and stream of revenues which sadly in e-commerce is not possible. So, investors are required to look at e-commerce as a long-term project and don’t expect immediate profits.

  1. Payment method

Although a lot of payment gateways have chipped in for online transactions, such as Easy Paisa and Jazz Cash, 90% of purchases are cash on delivery. Retrieving money from different logistics ends is a time-consuming process. Coupled with exchanges and returns, it is not at all easy to handle a large chunk of cash flows.

  1. Focus on website, not on products

We all want our sites to have styling, easy navigation, lush graphics, etc,but the bad news is, most of the products delivered are not as same as they look in a promotional banner. The most common complaint you get from customers is that the product is entirely different from what’s shown on the website. Also, products are damaged due to mishandling by the courier companies.

  1. Discount driven market

Almost all online shopping websites offer substantial discounts on their products. Discount is perhaps the most important factor for purchasing in Pakistani market. As a result, price wars as well as fewer profit margins.

  1. Human resource

Big giants hire industry experts and fresh employees from renowned business schools and attract them with higher salaries and other benefits. Sometimes, employees in e-commerce are immensely overpaid. When any employee lays off or if that business shuts, as it had happened in various cases (Aramshop.pk), employees have to take up jobs with lower salaries and fewer incentives.

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2 Comments

  1. Moaaz says

    Nice one!

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