Pakistan a land bestowed with broad prospects for e-commerce development

China Economic Net

Islamabad: Pakistan’s e-commerce sector is rapidly ascending on the global stage, now ranked as the 46th largest market worldwide, according to data from the International Trade Administration. This growth is fueled by a burgeoning middle class, widespread smartphone and internet usage, enhanced e-commerce infrastructure, and strong government support in the country.

Recent projections from Statista, a global data and business intelligence platform, highlight the impressive trajectory of the market. Pakistan’s e-commerce revenue reached $5.2 billion in 2023, positioning it ahead of many other developing countries. The market is expected to continue expanding at a compound annual growth rate of 5.92% from 2024 to 2029, with revenue anticipated to reach $6.711 billion by the end of this period.

Pakistan is distinguished as a mobile-first nation, with over 80% of its internet users accessing the web through smartphones. This mobile dominance is evident in e-commerce, where 58% of users made purchases using mobile devices in 2023—a figure that continues to grow.

Data from DataSparkle highlights the increasing engagement with mobile shopping applications. As of July 2024, the number of monthly active users of these apps in Pakistan exceeded 16.6 million, indicating a rapid growth in mobile e-commerce and a rising consumer acceptance of app-based shopping.

The lucrative potential of Pakistan’s e-commerce market has attracted both international and local platforms. Global giants like Alibaba’s AliExpress and Amazon are entering the Pakistani market, while homegrown platforms such as Daraz, DealCart, and Savyour are also thriving. Daraz, a leading South Asian e-commerce platform acquired by Alibaba Group in 2018, remains the top choice for online shoppers in Pakistan, boasting over 7 million monthly active users as of July 2024, according to DataSparkle, a data and analytics platform for emerging markets.

The expanding market has also attracted interest from various international players, with platforms such as SHEIN and Temu entering the top 15 shopping apps in Pakistan by mid-2024.

Despite its current size, Pakistan’s e-commerce market possesses immense potential. The sector is entering a phase of rapid growth, bolstered by favorable government policies that provide tax incentives and financing options for e-commerce businesses. With ongoing investment in infrastructure, Pakistan is anticipated to catch up with regional counterparts such as Indonesia, the Philippines, and Bangladesh.

However, the growth of the market is accompanied by heightened competition. To attract consumer interest, e-commerce platforms are making substantial investments to expand their market share, concentrating on essential factors such as price, quality, logistics, service, and payment options. Among these factors, price continues to be the most crucial consideration for Pakistani consumers.

Another emerging trend is the rise of social commerce. As of January 2024, Pakistan had 71.7 million active social media users, providing a robust foundation for this new avenue in e-commerce. Statista predicts that social commerce revenue will reach $14.74 million as the end of 2024, marking a significant 30% year-on-year growth and further solidifying its role in the e-commerce landscape.

With its vast potential and rapid growth, Pakistan’s e-commerce market is attracting global attention. As consumer behavior shifts, mobile device usage increases, social media’s influence expands, and government support strengthens, Pakistan’s e-commerce sector is poised to achieve even greater milestones, establishing itself as a formidable player in the global digital economy.