E-commerce

Pakistan’s first e-commerce index powered by Daraz shows an increase in digital payments and growing demand for online shopping

Pakistan's first e-commerce index powered by Daraz shows an increase in digital payments and growing demand for online shopping

Pakistan’s first E-commerce Index, which provides insights on consumer behavior and maps out the growth of the e-commerce industry, was launched by Daraz at an online event hosted by the platform and attended by Federal IT Secretary Shoaib Siddiqui on April 16th, 2020.

Pakistan remains a cash-reliant economy and consequently, collecting reliable data regarding the growth of the e-commerce market has remained a challenge. Therefore, the purpose of the E-commerce Index, which is powered by Daraz, is not only to establish benchmarks for online consumer behavior but also to help stakeholders in the industry better understand the online shopper. With Daraz representing the majority of the industry, the insights, which have been accumulated through the company’s internal data from 2019, serve that purpose.

The Index analyzes the behavior patterns of a growing segment of Pakistanis who shop online and paints a holistic picture of the factors that encourage and discourage shoppers from transitioning to online channels. Furthermore, it maps the e-commerce potential of tier 2 cities such as Sialkot, Gujranwala, Hyderabad and Multan, highlighting the extensivity of e-commerce penetration across Pakistan and observes customers’ demands for different categories of products and brands.

One of the key findings of the Index is that there has been a shift toward digital payment methods in 2019. On Daraz, digital payments contributed 32% of total consumer spend and the use of e-wallets increased by 8.2x year-on-year. The Index further highlights the changes witnessed in consumer demand during the second and third weeks of March 2020, following the outbreak of the Corona Virus in Pakistan. It notes that the percentage of sales of FMCG products on Daraz doubled during that time period and are expected to rise to 70% of the platform’s total sales in the coming weeks.

“During this period of uncertainty, we have witnessed a shift in customers’ behaviour, with demand fast growing for essential products – a strong indication that e-commerce can serve as a solution at this time. It is our responsibility to ensure continued access to these goods to facilitate social distancing, help our country and to serve our customers,” said Ehsan Saya.

Also Read: Daraz female seller from Sialkot earns up to Rs 20 million a year selling mobile phones

“During this time, the role and positive approach that technology companies have adopted should be acknowledged. Their contribution has remained valuable. The government has adopted an enabling role and we will continue to do so,” Mr Siddiqui said during the online event.

Daraz is confident that the insights on consumer behavior and demands provided in the Index will be fruitful for industry stakeholders and will help propel the digital revolution in the country.