Home Global Village E-commerce: Massive potential but least development?

E-commerce: Massive potential but least development?


News Analysis |

Pakistan has reportedly decided not to be a part of negotiations held under the direction World Trade Organization (WTO) in order to formalize and collectively regularize the global e-commerce industry. On January 25, 2019, 75 countries which constitute about 90% of global e-trade decided to help channel the benefits of the growing e-commerce industry for all.

The effort aims at allowing micro and medium level enterprises to work at their maximum capacity and contributing in national and global economies. As per a government official, Pakistan is totally cut off with the multilateral trade agreements at the global level; hence it has opted to stay out of formalization of e-commerce across the globe.

Cellular companies have chipped in over the years to enable the consumer’s payment gateway which now serves as the backbone of the e-commerce industry at the domestic level.

The Dismal State of Affairs

Policymaking and legislation process in Pakistan are archaic and certainly nowhere near to the demands of fast-changing, information and efficiency oriented contemporary world. Firstly, there has been a complete lack of judgment about the current and futuristic trends of buying and selling on part of those who hold key positions in the policymaking.

After the current government assumed power, it was hoped at large that since it has some forward-thinking brains at its disposal, the I.T and e-commerce industry might see a boom via enabling policies. But the first blow to such expectations came with the nomination of I.T minister who as per any definition was not suitable for the position at all.

Read more: Pakistan’s online shopping frenzy: e-commerce set to cross $ Billion mark

Secondly, there has been no serious effort to work on orchestrating a national policy and subsequent legislation which would ensure the entrepreneurs and consumers that their hard-earned money is backed by the law in case of any mishap. Former commerce minister Khurram Dastgir Khan was once leading the e-commerce debates at the WTO forum and the previous government had also directed the ministry to draft e-commerce policy. However, the former government had expressed concern over the inability of the commerce and information technology ministries to formulate a sound national e-commerce policy.

Though there has not been a formal assessment of the gross potential of the e-commerce industry in Pakistan, it is speculated to cross over $1 billion by the year 2020. Since the government does not even know the domestic challenges related to manufacturing, supply, and shipment of national products at small scale and medium scale, it would have not been able to clearly incorporate them in the regulations which would now be formulated without Pakistan’s participation.

Due to lack of a trustable payment gateway such as PayPal, Pakistani low-to-medium end manufactures suffer as their products are not able to reach other countries.

No Trustable Payment Gateways

Cellular companies have chipped in over the years to enable the consumer’s payment gateway which now serves as the backbone of the e-commerce industry at the domestic level. But due to quality concerns along with several other reasons, Pakistani consumers do not trust local vendors which is a phenomenon again endorsed due to lacking coherent national e-commerce policy.

Consequently, forums like Ali Express and Amazon become the first choice of consumers particularly former which grabs millions of dollars from the Pakistani market. Due to lack of a trustable payment gateway such as PayPal, Pakistani low-to-medium end manufactures suffer as their products are not able to reach other countries.

Read more: Mukesh Ambani to battle Amazon, Walmart in e-commerce

In his early days into office, Finance Minister Asad Umar acknowledged this wedge saying that he would bring PayPal to Pakistan, an announcement which was overwhelmingly appreciated by masses. It has been around 6 months of power for PTI now but there has not been an update as to what progress has been made in this regard.

There are now creative and unorthodox ways, powered by the information revolution, which people can use to earn extra money for themselves selling goods and services across borders. Pakistan needs to invest resources and energy to help this sector to grow which ultimately is beneficial for the economy of the country in the long run.