Last year, the Pakistani e-commerce market was pegged at $100 million. Recent reports suggest it is expected to grow to an immense $1bn by 2020 – a ten-fold growth in around five years’ time. This seems oddly realistic if you follow the ongoings of the market.
After launching in 2014, 3G/4G services continue to grow fast in the country. We have around 35 million subscribers, and they keep growing at about 1 million every month. If you look in bigger markets of India and Sri Lanka, you will see that their e-commerce markets saw a huge boost a few short years after 3G/4G became mainstream. The same is expected of Pakistan.
Established global brands have entered or are entering Pakistan, and are spending big to get the word out. We are all aware of Uber, OLX, Careem, and Foodpanda, to name a few, but did you know Australian ride-sharing startup Limofied is also launching soon in Pakistan? Such companies along with our own Daraz, TCS Yayvo, Zameen etc. are spending hundreds of millions to push their products via advertisements. These are helping the average Pakistani understand the value of e-commerce, which is great for everyone involved in the industry.
In 2016, the vast majority of new startups that received funding from venture capitalists and investors were e-commerce based. Examples include Finja and Well.pk with $1mn investment, BeautyHooked with $280,000, Travly with $200,000, and Perkup with $150,000 to name a few.
Sales at Black Friday 2016 – an industry-wide shopping festival – exceeded last year’s and broke major records. Popular online store Daraz.pk claimed it crossed Black Friday 2015’s already great sales record within ten hours of launching the Black Friday 2016 sales campaign. Other stores mentioned similar extravagant sales.
There is one more trend that is indicative of e-commerce growth in Pakistan – the increasing popularity of price comparison startups that aim to make online shopping easier.
“With dozens of online stores selling the same items across a wide spectrum of prices, warranties, shipment times, and payment methods, online shopping has become a bit of a tedious activity” says Awais Imran, co-founder of PriceOye. “This is particularly true for budget-conscious shoppers which is the case for most Pakistanis.”
PriceOye is Pakistan’s leading price comparison service with about 100,000 estimated monthly visitors. It enables online shoppers to compare the latest prices from online stores like Daraz, Telemart, and Shophive for phones from brands like Huawei, Samsung, and Apple. Because prices are listed in ascending order, and are updated automatically, you are essentially guaranteed to find the lowest current market price right away.
PriceOye is among a bunch of comparison shopping websites launched somewhat recently in Pakistan. There’s SmartChoice for comparing Internet packages, KarloCompare for comparing financial services, and competitors like JustPrice and PriceBlaze.
PriceOye currently only deals with price comparisons for mobile phones from more than a dozen brands. Everything from popular local brands like QMobile to Samsung and iPhone are included. As demand increases, it will include support for more product types.
As more and more Pakistanis adopt e-commerce, the need for utilities that make e-commerce transactions easier, or add to them, increases.
“This is a trend we’ve been observing in the East. When e-commerce grew in Thailand, India, China, and Japan, comparison shopping was right on its tail.” says Awais. “Pakistan is already seeing signs of this, and it will become crystal clear in years 2017 and 2018 when tens of millions more Pakistanis will make their first business transaction online.”
The details maybe different, but the larger trends are common among Asian economies. The previously mentioned countries saw the same events which led to ecommerce growth including big ones like 3G/4G launch, rapidly increased smartphone adoption, interest from foreign companies, and smaller ones like comparison shopping services.
Comparison shopping services work well for everyone. Consumers find deals that suits their needs, online stores unlock additional revenues and customers, while comparison shopping services make a commission off each sale.
“This is only phase one of ecommerce growth; our market is still in infancy.” added Adeel Shaffi, co-founder of PriceOye. “Yet this is precisely why it is the most exciting time for e-commerce startups. We expect big news from across the e-commerce space in Pakistan in 2017.”