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The Future Of Pakistan E-Commerce

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Pakistan is still an under developing country and is in a process of making their way towards the road of technology. The internet is prevailing like dark cloud on Pakistan and it will hit the Pakistan economy positively in the near future. People are getting aware of the importance of business on the internet rapidly and this will prove good in the favor of Pakistan. Pakistan is one of the fastest growing e-commerce countries with more payments gateways and increasing coverage of 3G and 4G networks. According to various figures, Pakistan’s e-commerce sales in 2017 were $ 622 million, 0. 34% of the retail market, which is doubling every year. It is expected to reach 1 billion US dollars by 2020. It can be concluded that there is a lot of scope of e-commerce in Pakistan, and most companies are eager to going to the digital world, but at present E-commerce is not expected to increase in near future due to low PC and internet penetration.

Industry, businesses and trade people prefer to use traditional ways of business enjoying personal contacts and mode of payments. I think that companies have started realizing the potential of ecommerce and electronic data interchange In Pakistan, especially in the Banking sector. So the future of Ecommerce in Pakistan is bright. We will embrace ecommerce by desire or by force as more and more international transactions are undertaken electronically.

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What are the key drivers for Pakistan E-Commerce?

We have seen a rapid rise of e-commerce in Pakistan in the last few years with 100’s of e-commerce stores opening up in Pakistan and total market size expected to reach a $1 billion mark soon. There are some key drivers those are increasing this rapid rise day by day. Those are as following:

  • With more than 50 million 3g & 4g users in Pakistan & Social Media users, the digitization trend is just beginning to pick pace in Pakistan.
  • Starting from a basic Social Media Presence through Facebook, Instagram or Snapchat etc. to creating their online stores and establishing a digital profile for their brand that speaks and communicates as a digital entity.
  • Ranging from the marketplace model to self-owned digital assets, all businesses are exploring the untapped market potential and find a new channel for growth.
  • The Development, Management & Innovation of the Platform (online store).

Case studies

Amazon describes its summary in your own words?Amazon was founded by Jeff Bezos in 1995. Its vision was to build a shopping place for book lovers. They just took 30 days to deliver the books to the customers of 50 states & 45 countries. According to 2013 report, amazon. com offers services to customers, sellers, enterprises & consumers. Amazon success story has 4 different parts:

  1. Information Systems utilized for internet activity.
  2. Business strategies applied for internet activity.
  3. E-CRM cycle conducted for internet activity: Customer Relationship Management.
  4. Recommendation for Amazon. com.

Part 1: Information Systems utilized for internet activity

In this part, by 1995 amazon has huge database. They renovated the entire system in 2000. Amazon Web Service (AWS) & Simple Storage Service (SS) are the main system developed by amazon. As the customers are searching & ordering products, system must have to be fast, reliable and secured. CRM (Customer Relation Management) system is taking customer information through their searching, wish list & so on. For tracking fraudsters amazon built a system known as SAS (Smart Analysis Search). Amazon is information system based on SOA (Service Oriented Architecture). Amazon offer many features to customers including cart, wish list, 1- click purchase, credit/debit card payment. Amazon also developed recommendation system which recommends customers past purchases & searching data. In 2000, amazon builds SCM (Supply Chain Management) and its activities are controlled by CRM system. Amazon uses oracle as ERP (Enterprise Resource Management). ERP hold information related to customer by database. CRM follows following application to collect information of the customer:

  • Customer’s credit card, transaction, order record, profile and past purchase history is collected in database.
  • CRM takes care of transaction record with secured transaction method.
  • Through customer feedback, wish list, product reviews web page system collects customer information.

Part 2: Business strategies applied for internet activity

Amazon only strategy was to sell books to the customer through online. Amazon attracted customers by offering 1-click shopping, low price & increasing customer’s value. Successful journey of amazon begins when they introduce innovation in their strategy by offering DVDs & CDs with books. Amazon firstly followed B2C model but then changed it. Poter mentioned three district sources for limitless inventory which are as following:

  • Serving few needs of many customers.
  • Serving broad needs of few customers.
  • Serving broad needs of many customers.

Amazon followed 1st source but then changed it to 3rd source. Amazon provides products cheaper than its competitors. To increase the rate of sale amazon started an associate program with customers and small businessman.

Part 3: E-CRM cycle conducted for internet activity: Customer Relationship Management

E-CRM (Electronic Customer Relationship Management) is the basic concept of CRM to internet based e-commerce business. Amazon implement CRM by customer selection, customer acquisition (creates database to store customer accounts), wish list & review system, customer retention (amazon retain customer by satisfying customers through good service & effective communication), customer extension.

Part 4: Recommendation for Amazon. com

Competition is growing day by day. It is important for amazon to think something new. Amazon has to be smart because people in today’s world ask for more. Amazon’s new technology of drone delivery system indicates they are planning something new. But growing competition can be a risk for amazon.

Advantages and Disadvantages of E-Commerce

Advantages:

  • Much faster transactions available.
  • Products and services are easy to find.
  • Easier time managing a business
  • Doesn’t require much physical space.
  • No geographical limitations translate as a bigger customer reach.
  • Higher quality of services and lower operational costs.

Disadvantages:

  • No guarantee of product quality.
  • Customer loyalty becomes a bigger issue as there is a minimal direct customer-company interaction.
  • Anyone can start an online business, which sometimes leads to scam sites.
  • Hackers target web shops more often than you think.
  • Mechanical failures can get quite more punishing.

What are the enablers of Pakistan E-commerce

The number of registered e-commerce merchants has risen by 2. 6-times and e-commerce payments have surged 2. 3-times in a span of just twelve months, as per a State Bank of Pakistan report. Pakistani businesses have embraced e-commerce. Hundreds of retailers, ranging from clothing outlets to electronic equipment stores, are now using websites to sell goods to customers. The emergence of several online marketplaces or enablers, such as Daraz. pk and OLX Pakistan, has made it easier for retailers to sell goods on the web. At the same time, a number of new online businesses have also propped up. The growth has been so rapid that Pakistan’s e-commerce sector is estimated to achieve $1 billion in revenues by 2020. Part of this is due to the ever increasing consumer base with access to the internet, which has crossed 40 million this year, and the introduction of online sales and offers. Some of most important enablers or facilitators of Pakistan E-commerce are Daraz. pk, Kaymu. pk, HomeShopping. pk, Shophive, Technifai etc.

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