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January 7, 2021

E-commerce: Time to update

Business

January 7, 2021

LAHORE: Retail is going digital around the world. Pakistan is presently far behind in online retail business, but it would catch up fast if online business rules streamlined.

Global statistics are interesting. In the United States, e-retail in last three months grew as much as it had in past ten years.

Even in pre-Covid19 days the US was far ahead of Pakistan in e-commerce. This leap in e-trade in past three months has further widened the gap.

Europe has always been behind the US in e-commerce; still, its e-retail sales during January 2020 to August 2020 were equivalent to sales in the previous six years.

The developed economies have over years worked out a sustainable e-commerce culture of trust and efficiency. In online retails, the consumer is the king because the competition is very sharp.

In the beginning, IT start-ups introduced the e-retail concept. They provided quality non-branded products at reasonable prices.

Many others followed, relieving the consumers from the hassle of going to retail markets. The deliveries were prompt with buy back guarantees in case the consumer was not satisfied with the quality.

Within years e-commerce started hurting the big brands. The e-retailers also offered custom made dresses at competitive prices and introduced designs on a daily basis.

Many brands started closing their outlets. Some went out of business and others also started e-selling. E-commerce created new entrepreneurs; today Amazon, basically a book seller, is the largest enterprise in the US.

The success of e-commerce platforms owes to the realisation that consumers desire comfort not only in terms of styles and fashion trends, but also comfort and convenience in customer interactions. The e-retail outlets were the first to realise the change in consumer trends after Covid-19.

They immediately shifted from office wear to casual wear as the consumers in developed economies started working from homes. In lockdown they served consumers with comfortable, friction-free shopping.

In Pakistan e-retail was and still is dominated by the brands. The non-branded retailers made their presence felt slowly. After Covid-19 they started penetrating the e-retail markets in a big way.

All larger textile brands are busy in e-retail, but they also have a large number of retail outlets everywhere in big cities. This cuts back the charm of e-buying.

E-retailers registered a mushroom growth not only in big cities but also in remote areas. Some operating from Bahawalpur, Rajanpur, and many small towns in Sindh (excelling in the famous Ajrak) established themselves as reliable and competitive suppliers.

The only problem is that there is no buy back clause as such. Most of the retailers do not even allow the consumer to inspect the product before making payment.

There are numerous instances where the consumers received different colour or size of the dress they ordered. Getting it replaced is a hassle that many cannot afford.

Moreover, the utility of the item may not be there if it is not received in time. Still many e-retailers make all out efforts to serve the consumer in case of any flaw in dispatch from their side.

These retailers dealing in multiple items are gaining a large consumer base. The brands are casual in addressing the complaints of the consumers.

A few retailers have now started allowing the consumers to inspect their ordered item before making payment and return it to the delivery man if the order is not up to the specifications.

These retailers are in fact quality producers and so face nominal rejections of their orders. They are gaining rapidly in the e-retail market.

The nascent e-retail market has a very bright future in Pakistan only if the buyers develop confidence in sellers. Regulating this trade is not possible in the country as all regulatory bodies strangulate business instead of regulating it.

The Drug Regulatory Authority of Pakistan is one; the Federal Board of Revenue another such example. The e-commerce platforms would have to create confidence among buyers by letting them inspect the ordered article before making payment.

In case of rejection, they would have to bear the dispatch expenses, but they would be extremely careful in supplying the items as listed in their catalogues. Most of the entrenched e-retailers would lose their consumer base if they continued with the current practice of delivering the goods and taking the payment before delivery.

The government must realise that e-trade is all about technology. The seamless flow of internet connection is essential.

Most of the online trade globally and in Pakistan is conducted through mobiles. The internet connections provided by mobile phone companies are not of the desired standard.

There are gaps in connectivity of each company in different locations. With poor connectivity, it is not possible to conduct e-business by the buyer or the purchaser.

Pakistan Telecommunication Authority should ensure seamless flow of internet connections by mobile companies as well as the PTCL. The private sector internet service providers are providing satisfactory services, but their use is limited to homes and offices where their devices are installed.