E-Commerce- Redefining Businesses
E-commerce in it’s easiest definition is the use of the internet to buy, sell and trade goods, exchange data.
E-commerce in it’s easiest definition is the use of the internet to buy, sell and trade goods, exchange data. The Internet is the most democratizing tool, which not only liberates freedom of expression but helps consumers to get rid of intermediaries. E-commerce enables consumers to buy and sell with ease.
Global e-commerce sales are expected to be $4 trillion in 2020. Asia is one of the growing markets for e-commerce and populous countries such as Pakistan have potential for e-commerce. COVID-19 lock-downs playing a catalyst role for adoption of e-commerce around the world and e-commerce platforms are over-subscribed to their current capacity.
E-commerce has multiple types similar to that of a retail business including:
- Business-to-Business (B2B)
- Business-to-Consumer (B2C)
- Consumer-to-Consumer (C2C)
- Consumer-to-Business (C2B)
- Business-to-Governments (B2G)
With the help of e-commerce, businesses across the globe can reach beyond geographic boundaries. As per the 2017 stats by KPMG’s global online consumer report, the top reason for people to buy online is the ability of buying all hours of the day and throughout the week.
E-commerce- The new way of business
While e-commerce is a relatively new concept for developing countries like Pakistan, it is still widely acceptable. The estimated number of e-commerce sites across the world lies between 12 million to 24 million (DigitalCommerce360) which keeps growing daily.
It is expected that by 2040, possibly 95% of all buying, selling and trading will take place via e-commerce (Nasdaq).
E-commerce is helping small scale businesses in developing countries to reach global markets more easily than through other usual business channels as online enterprises can be operated at a small scale and do not require high initial investments. Online commerce platforms also reduce the costs related to geographic distance greatly for exporters as they do not need to open physical stores internationally.
In the list of leading global e-commerce platforms based on the Gross Merchandise Value (GMV), Alibaba tops the chart with GMV >$768 billion for B2B and C2C business, while Amazon gets the second place at $239 billion GMV for B2C and C2C business. eBay comes in 4th place with GMV of $93 billion for C2C and C2B business (The Motley Fool).
E-commerce in Pakistan
As per the 2017 demographics of Pakistan, 69% of the population is 29 or below in age and hence is more acceptable towards technological growth. Pakistan youth tends to do things in the easiest way while saving time and money which will elevate the use of e-commerce in all possible fields of business and so e-commerce has the potential to strengthen the economy eventually.
E-commerce provides a wide variety of opportunities for Pakistani businesses and entrepreneurs like access to wider and distant markets, quicker exchange, secure payments, easier setup and simpler management. E-commerce can play an important role in improving livelihoods, creating competitiveness, increasing tech awareness and greater share in the global market for Pakistan.
As of the fiscal year 2018, Pakistan’s e-commerce industry was estimated at 99.3 billion PKR, with respect to 51.8 billion PKR in 2017, that means year-over-year growth of 92% which is alarmingly high (KCCI). We can see an increase in people buying from online stores domestically but e-commerce has still not reached the level where electronic money is used in place of cash. People still prefer COD (cash on delivery) as a method of payment instead of online payments.
Pakistan introduced an e-commerce policy framework in October 2019 and the State Bank of Pakistan issued digital money issuers guidelines. Recent initiative of governmental agencies for ease of business and e-commerce framework helping e-commerce startups. Retail business has badly been damaged due to COVID-19. A recent study (Digital commerce 360) indicates that more than 77% of retail businesses are facing losses due to COVID-19 lock-down and this percentage can see an immense increase if the situation proceeds any longer. In this alarming situation the only business to expect a profit or no losses are e-commerce businesses.
RNS Solutions has made a joint venture with local businesses to launch e-grocery services with the name of “Erocery”. Erocery aims to be the number one e-grocery platform in Pakistan. Erocery will be launched in April 2020 from three big cities of Pakistan and proliferate to other four cities until July 2020. Erocery platform is developed using headless e-commerce and progressive web applications. Erocery will be having Web and Mobile applications along with online to offline (O2O) deliver services.
Erocery is building a delivery system to provide groceries with in 2 hours with geo-location tracking.