E-commerce market almost doubled in fiscal year 2017-18

Pakistan's e-commerce market almost doubled in fiscal year 2017-18 as digitalization paved the way for the services sector to increase its contribution to the gross domestic product from 52 percent to 60 percent.

According to the State Bank of Pakistan report,

E-commerce is booming due to relatively larger penetration of internet, which is further making it easier to do business by lowering the cost of transaction.

The business-to-consumer (B2C) side of e-commerce is growing rapidly whereas large-scale investment in the business-to-business (B2B) category is also under way.

Sales of local and international e-commerce merchants reached 40.1 billion dollars in Fiscal Year 2018 compared to 20.7 billion rupees last year.

Market estimates put the share of postpaid cash-on-delivery settlements at around 80-90 percent of the total volume and about 60 percent of the total value of e-commerce in Pakistan.

The major reason behind cash on delivery of up to 90 percent is that online platforms have not yet succeeded in building trust among customers.

The State Bank report quoted McKinsey Global Institute report according to which Pakistan can experience an increase in its GDP by a cumulative seven percentage points and create around four million new jobs during 2016-2025 via an increase in the use of digital financial services alone.

Source: Radio Pakistan