Challenges in e-commerce are underlined.
Major constraints include a preference for COD payments and lengthy delivery times.
In cooperation with USAID’s Pakistan Regional Economic Integration Activity, the Ministry of Commerce (MoC) organised a two-day workshop to address issues with cross-border e-commerce exports, system automation, and logistics (PREIA).
Over 65 important stakeholders, including representatives from the MoC, State Bank of Pakistan (SBP), Revenue Authorities, Pakistan Single Window (PSW), Pakistan Post, and Pakistan Customs, attended the event.
Online marketplaces, e-commerce merchants, logistics firms, commercial banks, women business owners, and Chambers of Commerce and Industry were among the private sector participants.
Aaisha Makhdum, the MoC’s executive director general, welcomed the audience and informed attendees of the promising progress seen in the nascent e-commerce sector in her opening remarks.
She emphasised the significance of public-private partnerships in accomplishing the goals of e-commerce policy. She also emphasised how the SRO 14 allows Small and Medium Sized Enterprises (SMEs) to export a variety of items in modest quantities, facilitating B2C e-commerce exports.
The results of a study the ministry conducted earlier this year to identify the main difficulties in domestic and international e-commerce logistics were also presented by the Director General (Services), Muhammad Suleyman Khan, of the commerce ministry.
E-commerce merchants, online marketplaces, and logistical service providers were among the survey’s respondents.
The lack of entry barriers is one of the main problems facing the courier industry, according to PentaExpress CEO Aamir Q Basrai, who spoke about the difficulties faced by these businesses in an interview with The Express Tribune. There is no structure in place to control the number of new courier companies that enter the market.
“Price wars that only help the consumer are being fought for the sake of competition. As a result, he said, “We see numerous startups and courier companies on the edge of liquidation. According to Basrai, the $5.9 billion Pakistani e-commerce market is projected to increase by about 6.09% yearly.
“Responsible sellers and powerful consumer behaviour are urgently needed in order to offer authentic and sensible items as well as to build customer confidence, which has the ability to develop and increase by more than 10% annually. The CEO of PentaExpress claimed that the ecommerce sector offers a sizable opportunity to many organisations from various industries to perform using new avenues.
Ehsan Saya, managing director of Daraz Pakistan, stated to The Express Tribune that “in terms of logistics, our country needs to improve on the low adoption of digitization and lack of physical infrastructure.”
For example, status updates are frequently manually entered on paper in smaller cities and rural locations, making it more difficult to manage and distribute information quickly. In contrast, these records are now preserved digitally in metropolitan areas, which facilitates real-time tracking. Second, some remote communities lack properly developed roads and highways, which raises the cost of delivery there,” he continued.
“Over the years, we have teamed up with about ten business specialists and closely collaborated with them to improve the ecosystem as a whole. One would have noted that there have been a lot of new companies entering this market in the past 18 months to address scale and digitisation-related problems. To meet the expanding demand, additional businesses can yet enter the market, particularly those that can innovate in the logistics sector, according to Saya.
Saya mentioned that the difficulties with cash-on-delivery (COD) orders were that they had a lower success rate than items that were paid for electronically. 1-2% of digitally paid orders fail, compared to 12-14% when paid with COD. Over the past few years, we have put in a lot of effort to make it simpler for consumers to pay for orders using electronic payment methods. We collaborate with banks and schemes to inform, reward, and prod clients to use their cards and wallets. In addition to providing savings, we strive to streamline the digital payment process for consumers.
The third issue is that consumers are just now beginning to believe in ‘online shopping. Although Covid undoubtedly sped up the process, he continued, “it’s essential for all online marketplaces and vendors to offer clients a great experience.