The country of Pakistan is one of the least developed in the world. In the past few years, online shopping in Pakistan has increased at an enviable speed. A number of factors have directly contributed to these phenomenal growth rates. The following are some of the contributing factors to greater e-commerce activity in Pakistan.
The Internet and its users:
Online shopping in pakistan has seen an increase in internet usage during the last decade. Anyone with doubts should look at how many internet users have grown in the last 12 years. In 2000, there were only 133,900 people using the internet. By 2010, there were 18,500,000. There have been exponential increases in the number of internet users, growing from 0.1% in year 2000 to 10.4% in year 2010. With an increase in internet penetration of 100 times, this is no small accomplishment.
A demographic factor has always played an important role in e-commerce activity. Online shopping in Pakistan is growing due to the youth. In 2011, the United Nations estimated Pakistan’s population to be 35.4% children aged between 0 – 14. Also, Pakistan had a 60.3% population aged between 15 and 64 in 2011. In Pakistan, more than 60% of the population is under the age of 25. Technology tends to be adopted by younger people faster than by older people.
Learning newer technology is easy for them since there is no steep learning curve. In Pakistan, online shopping is poised to prosper due to the increasing number of young people.
New business models:
Internet usage has evolved over the years as we all know. Being engulfed in terrorism since the year 2000, the year when the internet started growing in Pakistan, the country has not been able to successfully establish any online payment mechanisms.
The success of e-commerce websites in Pakistan has also been instrumental in the development of new payment models for internet transactions that have helped pave the way for making payments online. The best-known business model in Pakistan is called payment on delivery.
This new business model is successfully converting customers purchasing technology gadgets, such as ranch simulator health supplement products, and other items of need. The majority of websites have gained the trust of their customers by delivering products and getting the payment upon delivery.
Banking via mobile phone:
Mobile banking has expanded due to the efforts of several telecommunications companies. There have already been successful mobile banking products introduced in Pakistan like Easy Paisa, UBL Omni, and Time Pey. While they don’t replace more complex and customizable international payment solutions like Visa, Mastercard, or PayPal, they have managed to penetrate the market, offering customers highly competitive pricing.
Also on the rise is online banking. Online transfer of payments is already possible with banks such as HSBC and Standard Chartered. In order to minimize the likelihood of fraud or embezzlement, online banking transactions are provided with secure accessibility. Many technologies have been successful or failed due to their economic costs. Transaction costs will also contribute to the growth of online shopping in Pakistan. Transaction costs will decrease significantly if several companies offer their customers online payment options. Similarly, the quality of service would also improve if there were so many competitors in the market.
In addition, we still remember those days when transferring funds meant at least two to three hours of spare time working on deposits, account numbers, and other documentation. Modern online payments have eliminated all these problems when you can send money to anyone in the country with only the presentation of your national identification card.