Assignment for 2nd hourly

1. Situation of e-commerce in the developing countries? Majorly Pakistan.

2. Challenges/limitation of adoption of e-commerce in the developing countries? Majorly
Pakistan.
3. Compare the past and current growth trends of the e-commerce in the developing
countries. On the basis of past and present growth trends, analyze the Future trend of e-
commerce in Pakistan

 All questions should be answered in detail with logical reasoning.

 Add references of sources of information
 Advisable to take reference from articles or case studies

Answer 1
The rapid increase in the usage and awareness of Internet even to the areas which have low
electricity and power supply has given rise to the electronic commerce or e-commerce. People
around the world have shifted towards ecommerce since buying and selling from the comfort of
your home. In other words, e-commerce has the devalued the need of spending hundreds of
thousands of money on physical outlay or infrastructure to secure a global presence. However, in
Pakistan the situation is not as same as the other developed countries. The foundation has been
laid but the pace to pick it has been slow.

When it comes to technological development or trend, Pakistan has always been behind other
countries. For instance, the framework of e-commerce took about three years to be approved at
the cabinet. However, the framework has extensive involvement of private and public
stakeholders and the e-commerce dealers and conglomerate. The aim was to cater the growth of
this industry, an infrastructure for online or e-payments, digitization, empowering SMEs and
protection of the consumers at the same time.

The top online retail or e-commerce stores in Pakistan are Daraz, Kaymu and Telemart. These
stores have been able to capture a lot of market and create their brand recall, awareness and
identity but the 85% of the business is obtained via retail outlets. However, in many developed
countries, AliBaba and Amazon have taken over the retail industry. The allow the consumers
with the choice to sell and buy any product of all niches of their choice without physically
visiting the market.

Pakistan’s E-commerce industry has been estimated at PKR 99.3Bn in FY18 (FY17: PKR
51.8Bn) with YoY growth of 92%. With a population of more than 200 million and a large of
initiative being taken to digitize the industry, Pakistan has a huge potential which is still to be
tapped for E-commerce.

The country has about 70 million broadband subscribers and 60+ million 3G/4G subscribers. The
world which is all equipped with 5G and its services. Pakistan seems to lack the connectivity and
strong bandwidths to support this transformation. Pakistan also need to come with up with a
secure and safe payment gateway for online transactions. Apart from these, there are also other
reasons which are hijacking the growth and potential of E-commerce industry in Pakistan.

Answer 2:
Like already discussed, Pakistan and some other countries who couldn’t utilize E-commerce and
e-business to their fullest potential, which means that there is the market which is untapped and
has numerous opportunities. The-commerce doesn’t only enable a better and stable digital
environment but many startup and employment opportunities. However, Pakistani e-commerce
market remains small and there can be host of reasons.

When talking about e-business, it is recorded that a huge number of freelancers are from
Pakistan. They are providing their services to all parts of the world, ensuring that Pakistan is
home to diverse and unexceptional talent. Pakistan is economically poor country with little and
somehow awareness about dealing online. Customers might want to engage in international
business but have low trust over local retailers. The transaction process has a lot of hurdles.
Customer still choose to prefer COD (Cash on Delivery). One major reason is lack of banking
services. A lot of adults still do not have bank accounts. Very few banks have started their e-
banking whereas in different parts of the world, there are a lot of banks which do not have
physical existence.
There are a lot of cultural issues such as in Pakistan, face-to-face shopping is an essential part of
the whole shopping experience. Customers like viewing the entire option and choosing the best,
some even prefer trials which is not the case in online shopping. Another challenge for E-
commerce is scams. A lot of customers have been fooled either by sales, discounts or some
added-feature. As a result, they receive a lower quality, fake, or replica products which creates a
disappointing experience. Another reason associate is the privacy issues. Customers don’t feel
safe to share their information on online platforms.

Due to the advancement in globalization and terrorism, there is a necessity to build a strong
security system in respect of ecommerce. A company is at risk if it does not build a security
system which ultimately leads to customer and profit loss. Because of these possibilities of risks,
there is a need to establish security technology in order to progress in ecommerce business.
Components like firewall, LAN security, and internet should be authentic and certain to ensure
the reliability of the system. In order to cope up with this issue, laws and regulations are made
that describe the conduct of business internationally and locally. But even these laws are not
effectively preventing malicious users and hackers from illegal actions and this really disturb the
ecommerce users.

However, Pakistan is expected to reach a target of $1 billion by the end of 2020. But with other
countries such as Egypt having e-commerce sales around $18 billion despite of all the
international and economic sanctions proves that with the potential in Pakistan, $1 Billion is an
underestimation.

Answer 3:

E-commerce or electronic commerce has altered the modern business activity all through the
globe, causing an enthusiastic exchange. The comfort picked up from internet business had
affected both the business visionaries and buyers to change from blocks and-mortar retailer
towards web-based shopping. As the worldwide internet population keeps on developing, new
deals channels have advanced and we are seeing firms putting resources into E-trade as just one
stores are currently turning into a basic piece of their deals and promoting systems.
In the course of recent years, e-banking transactions have expanded fundamentally. As per SBP,
it is evaluated that the quantity of clients utilizing online banking has reached to over 1.8 million.
During the year 2012, just 23 banks were giving ongoing internet banking office to the record
holders against 41 banks across the nation. In 2016 the web based financial offices were reached
out to 34 banks. The volume of e-banking exchanges has expanded by 100% from 235 million to
around 470 million in the course of the most recent five years while the estimation of e-banking
exchanges has flooded 62% from Rs22.1 trillion of every 2010-11 to Rs35.8 trillion out of 2014-
15.

The glory of online business has persuaded many Retailers to arrange online appropriation
organizes as the framework is more savy, purchaser neighborly and effectively sensible
contrasted and a customary channel, which requires an altogether extraordinary sort of dispersion
model. A customary appropriation divert of customer merchandise in Pakistan regularly involves
a Manufacturer/Service Provider, Distributor/Retailer/Branch, and Consumer. With the
convergence of web based business or m-trade (versatile) another circulation channel has
developed by which Manufacturer/Service Provider are getting a charge out of the opportunity to
sell items/administrations to countless potential purchasers legitimately though shoppers could
appreciate the opportunity to look/audit changed option effectively in less time at brought down
expense.

Presently, Pakistan is ranked 19th out of 210 countries in terms of internet users with 30 million
internet surfers. Being a developing country Pakistan still lacks fundamental infrastructure
required for a well-established e-business environment such as availability of internet itself,
public awareness and lack of social acceptance.

References
Adel.A.Alyoubi. (n.d.). E-commerce in Developing Countries and How to Develop Them During.
Department of Management Information Systems, College of Business of Jeddah, University of
Jeddah, Jeddah, Saudi.

Taslim, U., Muhbasher, S., & Khan, M. K. (2019). Ecommerce; a plausible solution to Pakistani Woes.
Karachi Chamber of Commerce.

Zafar, F. (2016). Ecommerce industry of Pakistan. ResearchGate.