By Wu Siya 

 

ISLAMABAD, Dec. 17 (Gwadar Pro)–Pakistan's e-commerce sector is rapidly ascending on the global stage. According to the newly released 2024 Pakistan E-commerce Industry Report, the country’s e-commerce revenue is expected to reach USD 5 billion in 2024, and the industry will maintain a compound annual growth rate of 5.92% between 2024 and 2029, as well as is expected to reach USD 6.7 billion in 2029.

 

“Pakistan's e-commerce sector contains golden opportunities, but the current B2B platform is not well developed, especially in remote areas, where many local merchants need to purchase goods from wholesalers. China's highly developed supply chain system can provide Pakistan with a series of practical experiences,” Aurang Zeb Khan, Vice President of OPAY Pakistan, who had successfully promoted Shoplus, a local B2B2C e-commerce solution, told Gwadar Pro.

 

Drawing from his experience as the former CEO of Shanghai Cheezmall, where he championed the innovative B2B2C business model, Zeb Khan has facilitated the integration of global supply chains through new platform Shoplus, which could not only connect Chinese suppliers directly with retail outlets in Pakistan, but also extends comprehensive value-added services, including overseas warehousing, logistics, and payment solutions.

 

“Pakistan has a population of 241 million, 64% of whom are under the age of 30, meaning the demographic dividend is a major advantage for the development of e-commerce,” said Naiel Oberoi lkram, Pakistan partner of Gobi China, a Chinese venture capital firm. “In the past five years, Pakistan’s e-commerce consumption has grown from USD 1.7 billion to USD 4.7 billion, a growth rate of 176%.”

 

Meanwhile, e-commerce also dominates the hot sectors attracting investment in Pakistan. In 2021, the total investment and financing of Pakistani start-ups reached a record high of USD 365 million, among which e-commerce absorbed the most investment and financing, totaling USD 174 million, accounting for 25% of the total. E-commerce will still be the most favored industry by capital in 2022 and 2023. In 2023, 34.4% of Pakistan’s total investment and financing went to this sector.

 

The booming growth of the user scale also indicates that e-commerce is booming rapidly in this South Asian country. From the perspective of user quantity, the total number of Pakistani e-commerce users is expected to reach 6.9 million in 2024 and is expected to further increase to 14 million in 2029. From the perspective of user value, the average revenue per user (ARPU) in 2023 has reached USD 770, far exceeding the South Asian average of USD 280.

 

 

Rich potential of such an emerging market naturally attracts international and local platforms. As of November 2024, Daraz, a wholly-owned subsidiary of Alibaba, is Pakistan’s leading e-commerce platform, with more than 9.4 million active users in November. Moreover, Temu, the overseas version of another Chinese giant Pinduoduo, has risen rapidly and ranked second in the list of active users of shopping apps in Pakistan the same month.

 

With Alibaba’s strong infrastructure capabilities and mature market experience, Daraz has gradually become Pakistan’s largest e-commerce platform, with a GMV of about USD 857 million last year. By now, Daraz has 34,500 sellers, 88 logistics centers, and 48% of transactions are completed through electronic payments in Pakistan.

 

However, Pakistan’s e-commerce is still in its infancy globally, with online retail accounting for only 2% of GDP, compared with 20% in Indonesia, the fourth most populous country, meaning the potential for future development of e-commerce is still considerable.

 

Despite facing a series of challenges including low Internet penetration and weak logistics infrastructure, the rise of social e-commerce, the popularity of mobile payments and the government’s supportive policies are injecting new vitality into Pakistan’s e-commerce industry. In the future, with the improvement of digital infrastructure and the consumers’ digital literacy, the e-commerce market in this South Asian country is expected to achieve a new leap forward.

 

This article originally appeared on Gwadar Pro.