E-Commerce's Global Recognition and its Scope and Limitations in Pakistan
The emergence of E-commerce has paved a pathway for exponential growth in trade, business, and the world economy. Global E-commerce is growing ascendingly for the last two decades and according to oberlo.com, an increase in sales of 13% in 2017 with an estimated sales of $29 trillion. Moreover, the rate of online shoppers grew 12% and reached about $1.2 billion.
E-commerce can help developing countries entrepreneurs to overcome usual trade channels and give assess to the global market. Recent studies show that small and medium E-commerce business can be five times more effective in exports than those in the traditional economy.
It has been estimated that the export costs that are associated with the geographic location for E-commerce are cut-down to two-third. This implies substantial gain for small and medium E-commerce enterprises, as well as for the female-headed enterprises which are E-commerce based can take their product globally.
Scope
E-commerce enterprises such as Daraz.pk, Pakwheel.com, Zameen.pk, and others are already achieving more business in Pakistan, indicating a positive trend towards E-commerce in Pakistan. Pakistan is also a leader in mobile banking transactions in Southeast Asia.
E-commerce is a business that is dependent on the internet. for developed countries the internet is necessary but for countries like Pakistan, the internet is still considered a luxury. Around 65% of Pakistan's population is under 29 years and are embracing technology and are eager to learn and want to do work around the technology. Pakistani youth has a very exciting journey ahead and the promotion and regulation of E-commerce will provide jobs to more than 130 million youth in Pakistan in the next 30 years.
Limitations
There is a lack of awareness around E-commerce, people still prefer physical means of trading, so they can bargain to get a good deal and go home with goods. People still think online transaction as a risky activity. A change in this trend is slowly but observable within a few years E-commerce will take the market like a storm but the regulation and frame will be needed to sustain E-commerce activity
Pakistan has a scope of a lot of growth but faces many problems, the following are some of the challenges.
- Pakistan has a low literacy rate majority of people don't understand technology, and cannot use the internet. It will be more effective if tutorial videos relating to E-commerce should be released.
- Many people don't have access to the internet in backward areas of Pakistan. Only 28% of the population has access to the internet and can use it.
- Local businessman still prefers the traditional mode of business and show a lack of trust in E-commerce.
- Security of online transaction, high bandwidth rates and monopolistic role of PTCL is playing a major role in limiting the E-commerce growth in Pakistan.
- The absence of an E-commerce policy framework is hampering its growth. Many people held their plan to start E-commerce just because of no framework and regulation.
The lack of trust is there because no regulations and frameworks are present which is a threat to the industry in a long. The misconception of E-commerce should be dealt with. Pakistan's E-commerce business is running on trust with zero frameworks.
Progress
In Pakistan, many E-commerce businesses are making profits, which is common in developed countries. To run E-commerce is soothing because the initial cost is of setup cost, after setting up it is just like a business of wholesale traders, but with new-age technology. In Pakistan Infinitybits.pk is helping entrepreneurs setting up their E-commerce website, SEO optimized content, and help in the ranking of a website on google. Infinitybits.pk is making a substantial difference on the ground of making E-commerce more casual in Pakistan, they help in the setup of the website and guide through the process and make it easy to run it even without any proper framework presence in Pakistan.
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