Thursday July 18, 2024

Lack of trust, payment options major bugs in digital growth

By Bilal Hussain
March 11, 2022

Karachi: E-commerce stalwarts say trust deficit in Pakistan’s e-commerce space, lack of digital payment options, and exploitation by market places deter digital growth in the country.

“There is a trust deficit in the e-commerce space in Pakistan,” said president TCS Saira Awan Malik, adding, customer remains in doubt whether they would receive the same product they ordered online or not.

People avoid prepaying for their online orders, and opt for cash-on-delivery to check a product before payment.

She was of the view that joint efforts from sellers as well as the government could help win the trust of online customers.

“The government has to work on consumer protection and consumer data protection,” Malik said while speaking at the Future of Retail Business Summit 2022.

She shared that around 15 to 20 percent orders were returned when customers opt for cash-on-delivery. It was two to five percent when an order was prepaid, she added.

There was a need to address challenges the e-commerce industry in the country was facing, she said, adding that digital payments were imperative for both customers and delivery companies.

Talking to summit, Badar Khushnood, chairman Pakistan Software Houses Association for IT and ITES (P@SHA) and co-founder of and Bramerz, said the number of people having bank accounts was quite low in comparison to the country’s population.

“Plastic money or credit card penetration was only one percent and debit penetration w as 15-20 percent, which has been one of the elements for low digital payments in the country,” he said.

Khushnood said e-commerce sector in the country was worth of $4 billion; only 10 percent digital payment, while remaining 90 percent was cash on delivery. There were around 110 million internet users, who he termed as having a ‘huge potential’ for e-commerce.

He said e-commerce challenges persist in Pakistan, where market spaces swindle not just local customers, but also exploit platforms such as Amazon.

Khushnood added that social commerce – selling through social media such as Facebook and Instagram – had been growing in the country. “There are around 1 to 2 million women and micro entrepreneurs who sell products through social media.”

About small and medium-sized enterprises (SMEs), he said small businesses should follow a hybrid strategy while selling in the e-commerce space.

“Online marketplace can shut you down any time. It is important to reach potential buyers through online marketplaces, and businesses should have their own website and apps.

That is your own space. You have direct customer data and interaction. Invest in your brand equity too,” he suggested to SMEs.

He was of the view that sellers should fix their complete value-chain and user experience.

“I see one important thing that many ignore is photography. If buyers don’t get to see a good picture of the product, chances are they won’t buy it.”

He further said the e-commerce sector has potential to grab online markets across the world, and Pakistani online sellers should look beyond the borders.