Protective policies could unlock $6bn e-commerce potential in Pakistan

In recent years, Pakistan has seen significant growth in its e-commerce industry, with revenues reaching $5.2 billion in 2023. This boom has been fueled by the rise in internet usage and a young, tech-savvy population, which has dramatically increased the demand for online shopping. The industry has not only created numerous jobs—ranging from warehouse personnel to delivery drivers—but has also encouraged local manufacturing due to rising demand for domestic products. However, this growth is accompanied by challenges, including unfair competition from international platforms using predatory practices that threaten local businesses. The competitive landscape becomes even more complex due to regulatory gaps that allow certain e-commerce players to operate without oversight. For instance, platforms like Temu take advantage of their global scale to offer lower prices, undermining local sellers who have invested resources in infrastructure and logistics. This has raised concerns about maintaining a fair marketplace where local businesses can thrive. The government plays a crucial role in ensuring that protective policies are introduced to level the playing field, safeguarding the interests of local businesses and maintaining consumer trust. To leverage the potential of e-commerce, Pakistan must look towards successful regional models such as Malaysia and Indonesia, which have supported their local micro, small, and medium enterprises through targeted initiatives. Plans like the 'Shop Malaysia Online' campaign and Indonesia's 'Proud of Indonesian Products' movement effectively increased the reach and visibility of local products, showing the tangible benefits of supporting homegrown businesses. Pakistan's efforts could similarly stimulate its e-commerce sector and encourage greater participation from local sellers. Addressing key issues like consumer concerns about online purchasing security and fraud remains crucial for this growth. A report from the Pakistan Software Export Board indicates that only 18% of the population has made online purchases, signifying a vast untapped market for e-commerce. Improving digital infrastructure, creating supportive government programs for MSMEs, and ensuring fair competition are necessary steps to enhance consumer experiences and build a robust e-commerce ecosystem in Pakistan. By adopting a comprehensive strategy that involves regulatory reforms and investments in technology, the country could unlock the full potential of its e-commerce market.