Trust deficit: A lacklustre to E-commerce in Pakistan

| Use of e-wallets, mobile accounts grow by almost eight times besides two times increase in use of bank cards

An exhibition of slothful indolence towards embracing new ideas and concepts that could bring a paradigm shift in establishing new societal behaviours has always been our first reaction as a nation. However, it is equally pertinent to mention that the ways we have handled the innovations had really impacted the consumer behaviours, proved quintessential in stifling the growth and progression of innumerable business solutions that have been in practice across the world.
E-business or online shopping, no doubt has been a remarkable shift from the conventional shopping patterns, however, in Pakistan, though it is making its inroads, yet the speed of shopper conversation to this form of purchase remained sluggish. There are innumerable factors pivotal to this lack of consumer interests in the online shopping concepts, but absence of international competition, incapacity of our system to support digital fund transfers, disinterested international intermediary payment collectors, absence or dysfunctional statutory (monopoly control commission) body to address customer grievances and last but not the least, low quality of delivered products, are to name a few. Pakistan E-commerce has been estimated at 99.3 billion in 2018, a substantial jump of 92 per cent growth from 55.2 billion in FY 2017. With a population of over 220 million and a number of financial inclusion solutions in term of branchless banking, Pakistan can be conveniently placed among the potential untapped markets. However, for E-commerce to get immersed in Pakistan`s business pool, there are quite a few factors, requiring focus and attention at the government level.
Pakistan`s E-commerce industry has grown rapidly over the past years, but heavy reliance on cash has ensured gathering data and establishing benchmarks remains a challenge. In order for the industry to grow, insights on consumer behaviour and shopping patterns are quintessential. Data pertaining to the spread of e commerce across country and payments method is as indispensable. Punjab being the largest populated province has the highest contribution to E-commerce, i.e. 55 per cent, followed by Sindh that stands at 36 per cent, whereas KPK, AJK and Balochistan cumulatively add 9 per cent. City wise market share presents a little changed scenario, where Karachi has been contributing 24 per cent as compared to 17 per cent of Lahore, followed by 10 per cent of Islamabad and Rawalpindi. It has been found through an E-commerce index that Electronics and Appliances, Mobiles, Tablets and Fashion have been the three top performing activities. However per unit sales had witnessed FMCG category at the top during 2019. It has been observed that the use of e-wallets and mobile accounts grew by almost eight times besides two times increase in the use of bank cards. The aforementioned numbers paint a rosy picture of the E-commerce future in Pakistan, however the reality is not as propitious as it seems. Owing to innumerable factors ranging from financial credibility to uncertain manufacturer and consumer behaviours to absence or in some cases, non-implementation of business protection laws, the international online giants have been circumspect in investing in Pakistan.
Online markets are basically a virtual place for introduction between seller and buyer, where the market owner ensures the authenticity of business transaction and safeguards the buyer interest with the provision of genuine product at the agreed rates, with the buyer getting the money within the stipulated time period. Take fashion industry, a prime contributor to the E-commerce in Pakistan, it has been observed that a mushroom growth of pages displaying different sorts of clothing has inundated the Facebook in the recent past. Ironically, substantial numbers of these advertisements don’t carry the price tags, leaving consumer at the mercy of seller to charge as per liking. Upon delivery, if the buyer finds something wrong with the product then it would be his or her fate, as seller bears no responsibility once the product has been delivered. In-effective consumer grievances handling mechanism at the government level further exacerbates the situation. Cyber security is another challenge faced by the online business transactions in Pakistan, lead to reluctance in providing card numbers to the online markets. This reluctance has its roots in the hundreds of unsolved financial scams, occurring on a daily basis in Pakistan. Disenchanted International intermediary payment collectors are also one of the prime reasons behind the inability of Pakistani consumers to harvest the benefits of international marketing options. These players don’t operate in Pakistan owing to the tough State bank of Pakistan regulations and abundance of internet scams.
Developed economies follows “how the business to be carried out” concept beside profit making objectives. There, the consumer lies at the heart of all initiatives and innovation and to delight the consumer is sine qua non. One dissatisfied consumer is one too many of them and they don’t settle themselves down until the solution is reached. On the contrary here, once an item reaches a consumer and got paid, then it becomes the responsibility of the consumer to bear the loss. Therefore no doubt, online business offer huge opportunity to grow by providing consumers hustle free purchasing experience, however this low hanging fruit remain out of reach until government takes pragmatic steps by introducing conducive laws to facilitate the international  payment options, setting up of specialized  consumer courts  to offer speedy justice to all disgruntled customers. Expeditious cyber security laws would pave way for a healthy competition that would bring in more transparency and qualitative improvements.
– The writer is a private sector professional and aspires widening of social discourse.

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