Pakistan’s undocumented e-commerce industry: will it be $1bn or $10bn by 2020?

e-commerce industry

Not a long ago, the former Deputy CEO of Telenor Irfan Wahab, predicted that e-commerce industry in Pakistan that values at $100 million would become a $10 billion industry in coming five years. He was of the view that the future of e-commerce industry is bright in Pakistan and government can multiply the impact by offering rebates and tax relaxations in various areas for the prosperity of the industry.

Yesterday, a new and contrast statement arrived from the government. According to the Commerce Minister Khurram Dastgir Khan, the e-commerce industry in Pakistan is expected to reach $1 billion by 2020. Well, there is a huge gap in $1 billion and $10 billion.

E-commerce is a widely undocumented industry, and the groups involved are not the public listed bodies. Government and others are unable to measure the exact size of this emerging industry. That’s why Telenor’s top official calculate the size of the industry to be around $100 million at current state and expects it to be $10 billion in next five years, and government officials calculate somewhat else.

During a roundtable on ‘E-Commerce for Development’ at 14th meeting of United Nations Conference on Trade and Development (UNCTAD) in Kenya, the Commerce Minister informed that a committee of ministers has already started working to formulate a national policy on e-commerce on the direction of government.

The UNCTAD e-commerce readiness index for developed countries is 77 and for under developed countries is 41. Pakistan’s index stands at 36. This lower index shows that there is still a long way to go ahead of the e-commerce initiatives in Pakistan. That’s why the government has accelerated its work speed to boost online trade.

 

Unctad Graph

The broadband penetration and mobile banking have also played a pivotal role in boosting the e-commerce industry.

“We lead mobile banking transactions in South Asia with 11pc of our citizens using mobile phones to carry out financial transactions,” the minister said.

The authorities have been working to update the rules and regulations governing digital trade and has approved the trade facilitation agreement (TFA). The cybercrime laws, data and consumer protection laws are in the pipeline.

The Commerce Minister Khurram Dastgir Khan spoke of the expected growth of e-commerce in Pakistan pointing out the well-equipped financial and telecom sector of the country.

“We welcome technical assistance to incorporate the whole ecology needed for e-commerce, particularly a regulatory framework, payment platforms, dispute settlement mechanisms and consumer protection laws”, the minister said.

The government is looking forward to a donor supported e-trade framework, which can match e-commerce in speed and flexibility.

The E-trade-for-all initiative taken by the UNCTAD to enhance opportunities for developing countries in e-commerce was also discussed during the roundtable. The minister noted that the initiative would support developing countries in e-commerce assessment, legal and regulatory framework, financing, skill development, payments, trade logistics and information and technology infrastructure.

The policy makers in international institutions should more focus on areas of great importance for developing countries such as volatile commodity prices and debt issues among other.

While a lot of work has been done to boost the e-commerce industry, there are still many challenges to cope with. From payment method, customer services, and consumer rights to the distribution of products, there are numerous areas where efforts are required. More importantly, this business needs to be documented with the tax authorities of Pakistan.

 

2 Comments

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  1. This is the MOST excellent news that Pakistan ecommerce industry is growing FASTEST. Currently several billion and projected to exceed tens maybe hundreds of the billions in few years. Most excited to read that pakistan is 36th in readiness for the ecommerce when developed countries are only 77. This means pakistan is AHEAD of other countries including country to our east which is doing very badly and will be failing soon. Inshallah we will be leading country soon.

  2. I think Pakistan ecommerce industry is growing at a tremendous pace. As internet penetration and trust of users in ecommerce stores and online payment methods grow, users will shop through online channels more and more. We have written a post on factors contributing to the growth of ecommerce industry in Pakistan:Rise of ecommerce in Pakistan

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