E-commerce is transforming and expanding online businesses and helps reduce geographical limitations and gain customers through search engines. It eliminates the need for a physical shop, lower costs, allows online comparison shopping, shows your deals, discounts, and new products easily, and provides great information. Furthermore, it includes consumer-to-consumer deals within online communities, business-to-business transactions, like between a wholesaler and a retailer, and business-to-government transactions, such as in e-procurement.
Pakistan has experienced rapid growth in e-commerce and digital businesses that have helped the country open up new market opportunities over time. E-commerce in Pakistan is developing at a striking pace with a growth rate of sales of 13%, which equals $2.9 trillion (The News). Most of these sales were made by domestic buyers purchasing from domestic sellers. However, purchasing from foreign sellers has recently gained traction as the share of buyers has climbed from 15 to 21%.
To further boost e-commerce, Pakistan needs to follow four approaches.
Pakistan should improve its internet infrastructure to expand access and lower costs. Establishing or strengthening internet exchange points (IXPs) will reduce internet costs by keeping domestically destined traffic within the country and help save on international data transit costs. Having more data centres and access to local cloud computing will also boost the ability of businesses and entrepreneurs to host e-commerce sites domestically.
Pakistan should enhance its cybersecurity and digital and financial literacy to increase consumer trust in financial inclusions and mobile payment. Establishing safety nets and consumer protection regulations will give consumers confidence when they buy online.
There should be upgraded payment systems in a country to make online transactions easier. Electronic payment systems should be upgraded to increase their capacity to handle all types of transactions, including bank transfers, in real-time. Also, there is a need to simplify the digital payment processes to enable merchants to accept online payments.
Making delivery service more reliable and less expensive will increase consumer certainty as they will get their online orders on time. Delivery options need to be expanded almost everywhere, enabling customers to track and trace their purchases and redirect deliveries from home addresses to optional pickup points.
These steps will play a significant role in transforming the landscape of online buying behaviour and will further boost international trade.
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