E-commerce & Online Shopping In Pakistan

E-commerce & Online Shopping In Pakistan

According to the stats provided in Google conference, gDayX, hosted on March 2014, TCS shipping service claimed to hold 24% of COD (Cash on Delivery) market share which is 90 million PKR per month. Using these stats some analyst also comes up with the estimated Pakistan E-commerce industry worth at approx. 4.5 Billion PKR per year ($43 million per year). However these stats may not include small players in online shopping or the popular deal sites (more stats on them below).

But you can find these stats on almost every Pakistani tech blog. Several analyst are using these numbers to predict the future of E-commerce industry in Pakistan, however even in its nascent age, it has already started to face some predicted problems, due to the particular nature of Pakistans consumers as well as sellers. We have read about several cases on popular blogs where customers were complaining that online websites failed to deliver the promised quality or in some cases even failed to deliver the item itself. But at the same time, there are cases where customers simply return the item because they didnt like it anymore or in worst cases, they simply refused to accept the order at delivery time.

For small companies this is a complete loss because almost 90% of online shopping is still based on Cash on delivery model and they have already spent the amount for any item that has been shipped. Beside that, majority of E-commerce companies having a sizable amount of orders, rely on third party shipping services which hold the payments for 15 day period and any returns are deducted from that amount. So the company offering online shopping has to bear all the expenses in such cases. But despite all these issues, the demand is growing and new websites offering online shopping in Pakistan are popping up like mushrooms every day.

Another major hurdle in online retail business in Pakistan is online Payment processing. Although with the number of “plastic” cards in circulation at 23.6 million as of March 2014, using credit or debit cards for shopping is actually not possible because you need to call the bank first to activate the online payment on your card before placing any order. Although MasterCard might not need this, VISA cards in Pakistan still require this step. There was no online Payment processor available in Pakistan till 2012. Many banks including Alfalah & NIB announced that they will introduce the payment processor shortly but nothing turns into reality. UBL was the first to actually offer and implement the first online payment processor but with unrealistic charges and processing fees. However banks like MCB and HBL are working on providing online payment solution with Master & Visa Cards. This will definitely help online business in Pakistan as sellers won’t have to rely on shipping companies to collect money for them. Good thing is peoples trust on online payment is increasing day by day which is evident by the fact that Mobile Phone Banking transactions has grown by 14.1% in 2014 compare to the year 2013 and there are around 1.5 million registered users of Mobile Phone Banking in the country. This trend shows that people are interested in online payment option, if offered, due to its convenience.

Online shopping exists in Pakistan since 1999. There were several websites in Pakistan that were offering to order stuff online. A couple of such websites were providing online Gifts service in Pakistan. Wikipedia page on Internet in Pakistan ( lists by Abid Beli as the first E-commerce company of Pakistan started in 2001; which is not true. Beliscity was started in 2002 and originally it was an ISP information portal. It listed limited computer accessories on its homepage & asked the user to call a specific phone number for item details & availability. Before Beliscity, there was a website, which was operating since 1999. This website is one of the several websites providing online gifts service under the parent company name Tohfay. Although their About Us page says the company is listed in San Francisco, but it’s run by a Pakistani.

Today when we talk about online shopping in Pakistan, we have several big players including Daraz, WareHouse, HomeShopping, ShopHive etc. Among all of them Daraz is most famous, mainly due to the amount it invests in advertising. RocketInternet, the parent company of Daraz, is basically famous for creating clones of leading or growing USA online business models and introduce them in emerging markets before the original company get the chance to enter that market. This gives them ample time to turn these into a strong local brands which then can be offered to original company for a price or taken to public themselves. With a couple of industry specific CMS, Rocket quickly creates a localized version of a successful online business model and then heavily invests in advertising. Daraz is basically a replica of Amazon, similar to their Malaysian variant Lazada.

A mid-level E-commerce website in Pakistan can gets up to 0.5 0.7 million organic traffic per month and 50-150 orders per day depending on the number of products they are offering.

With estimated traffic of 8 million visitors per month, Daraz is the leading player in online shopping in Pakistan, getting estimated 2500-3000 orders per day. Majority of Daraz Traffic comes from Paid & Display Advertising. HomeShopping estimated traffic is 1 1.5 million visitors per month, of which majority comes via Organic Search, with estimated 400-600 orders per day. Similarly another old player is Symbios which have 0.5 1 million estimated visitors per month and majority of their traffic is coming from Organic Search. Interestingly I have seen a couple of small players taking up to 50 orders per day with very less traffic by leveraging Facebook pages. But, as anyone could suggest, they get out of business pretty soon due to less brand value and increasing operating cost.

Another interesting thing to note is that if you can build & run a decent E-commerce website with some popular brand names in your inventory, you can sell your website to bigger players for a reasonable amount. I worked on digital marketing strategy of an E-commerce site which after only 6 months of operation became strong enough to get noticed by big players and finally get acquired by Leopards Courier. We successfully beat Daraz on several keywords in organic search with that site and some pretty big brands were working with that site at that time.

Rumor has it that Amazon may come to Pakistan in 2016 due to the ever growing popularity of as well as online shopping in Pakistan.

Beside the websites, many small entrepreneurs in Pakistan are selling products via Facebook Pages. Although technically they may not count as E-commerce nevertheless they still fall into online shopping. Similarly another thing gaining popularity among online shoppers are deals websites. Some of the major players among this niche are Lootlo, dailydeals etc. Lootlo is earning approx. 10 million PKR per month with 0.5 million visitors per month.

Currently Clothing & Fashion Accessories and Cosmetics have the largest share in business to consumer trading whereas Mobile Phones, Computers & Laptops are more popular in consumer to consumer selling.

Challenges for E-commerce Industry & Players in Pakistan:

  • It will keep getting harder for small players to enter the market.
  • Sales and Profitability are two entirely different things. To make your E-commerce business profitable you need to have a solid investment & inventory management.
  • It takes more than a website to run an online shopping business in Pakistan. You need to contact brands and make partnerships to get exclusive discounts for your customers. For that you need to build a decent website with some search visibility to convince the brands that you are good enough to sell their name.
  • Advertising Cost will go up. Facebook traffic isnt cheap anymore and Google Paid traffic has also gotten expensive due to the fact that advertisers numbers are growing by each day.


Good News For Pakistan E-commerce Industry & Players:

  • With ever increasing awareness, online shopping will eventually become a common trend in Pakistan
  • Recent introduction of 3G/4G services and increasing mobile usage will greatly help E-commerce in Pakistan
  • If you can build a reputable brand and a reasonable website you can sell it to bigger brand
  • With increasing awareness, big brands are now open for discussion and opportunities to sell their products on E-commerce websites. It’s up to you and your marketing abilities on how you approach them.
  • Many shipping companies now offer special rates for E-commerce companies in Pakistan


Action Items For E-commerce Companies In Pakistan:

1. As mentioned in Kaymu (another RocketInternet child company) E-commerce Research Report, E-commerce companies should focus on Branding & creating Returning Visitors.

2. Facebook & Google Paid traffic can act as instant boost to your traffic but Organic Search & Direct traffic will always help you in longer run for your website. Focusing on Search Engine optimization and EMail Marketing can get you amazing results.

3. Customer Service should be your top priority. Your brand name is everything on the internet. Even a single negative feedback about your brand will possibly causes your sales to go down. You can find several examples of this issue with Symbios, whose reputation was badly hurt after lot of complaints from customers. You should engage a full time Online Reputation Management Personnel to search and respond to complaints on forums, social media etc. People searching for the company will see that the company has actually responded to every issue and this will build your Brand Trust Value.

4. Instead of Google Search PPC, try Display advertising on targeted websites. It will help you in getting a better advertisement ROI.


Despite all the hurdles and issues, one thing is for sure that E-commerce will only flourish and will grow bigger in Pakistan. Famous brands like Unilever has already stepped into the market by partnering with Daraz and the majority of the famous retailers in Pakistan already have their websites up and running. Although there are a couple of major players in action but the market is still open and there is still chance for investors to get into online shopping business and capture their share of market. For example, you can still grab the vertical markets of online shopping and then continue horizontal growth. Your marketing team, Customer support team and Business Relation Teams are key part of your business. Invest in them and your business will grow.



Finally Alibaba, a chinese tech giant, has entered Pakistan E-commerce market with their website

Its a great news and affirmation of the general view that Pakistani E-commerce industry is growing. Lets see when Amazon enters the market 🙂

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