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Alibaba’s potential entry into Pakistan’s e-commerce Industry

In recent years, Pakistan’s e-commerce industry has grown at a rapid pace with the consumer trends playing the major role followed by consistent development in the telecom sector, empowering more percentage of population to access online content.

Startups have also influenced the change in consumer trends considering the number of startups has been seen to be growing in last few years.

Without a doubt, competition exists in the e-commerce sector however, on the flip side, this sector is not reliable or stable. The quality is not promising, payment procedures are always viewed with doubt and consumer protection is not reliable. The range of services only being made available to urban and semi-urban areas while ignoring the rural areas completely is another downside.

However, more recently, Alibaba officials were in Islamabad and Ishaq Dar, Minister of Finance, has tried to convince them by providing them with the figures relating to recent growth in IT and e-commerce.

For those who are unaware of Alibaba Group, it is the largest e-commerce company in the world, based in China, which provides wholesalers and consumers with the opportunity of an online handshake to conduct business. Millions of users use the platform provided by Alibaba either as merchants or as consumers because both get a reliable platform to carry out their business. Alibaba has also played a crucial role in nurturing the e-commerce industry worldwide and controls nearly 80% of China’s online shopping market.

Considering the size of China’s market and the limitless range of products, Alibaba’s entry into Pakistan would provide means for the Chinese companies to sell their products to the consumers in Pakistan whereas; Pakistani consumers will be able to get reliable products. Situation looks like a win-win for everyone, doesn’t it?

If we take a look at Pakistan’s e-commerce industry’s growth, it has been relatively slow over the past so many years however, with the launch of 3G/4G/LTE services in Pakistan, a large number of consumers access e-stores in search of good deals and the introduction of sales like Black Friday, Cyber Monday and New Year Sale have turned out to be overwhelming and rather difficult to handle for the e-retailers.

Consumers in Pakistan naturally have a fear of online fraud and this is one of leading reasons why e-commerce sector in Pakistan is stuck with offering the Cash on Delivery service.

On the other hand, commercial banks are reluctant to launch such a service due to their fear of vulnerability of Pakistani consumers online however in reality, it’s the lapses in their security protocols and inadequacy in their consumer protection policies.

However, with Alibaba entering the e-commerce industry with their own payment solution “Alipay” followed by their potential to take over e-commerce industry makes a perfect match for the local consumers. Furthermore, Pakistan’s market, unlike the saturated markers of Europe or United States, is still developing and has huge consumer base looking for the best possible choices when they shop online and therefore, it is the right place for giants like Alibaba to expand.

Lastly, even though we are still unsure on Alibaba’s final plans to enter into the e-commerce industry of Pakistan, it can be safely said that the entry would prove to be successful for both, Pakistani market and Alibaba considering the interest local consumers would take in jumping into the best e-commerce store with promising quality, reliability and security which the local e-commerce retailers are missing.

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