Pakistan's Black and White Fridays

By the time China's Alibaba.com had closed its Singles' Day shopping deals on November 11; Chinese consumers had ordered nearly $15 billion from the online merchant - a global record. One marvels at the ability of Alibaba's web masters and its supply-chain handlers to manage that kind of traffic. Now, later this month, leading Pakistani online retailer, Daraz.pk, will mark " Black Friday", offering the biggest sale of the year. It would be interesting to see local shoppers' response.

Online shopping in Pakistan is gaining traction. With annual transactions estimated at $30 million and growing, e-tailers are seeing double-digit revenue jumps. The online retail, however, is still below one percent of overall retail. As per Euromonitor International, retailing in Pakistan valued at nearly $36 billion in 2014. Out of that, non-grocery retailing which is what e-tailers target was about $11 billion.

But fundamentals are improving. Thanks to 3G and 4G services, Internet connectivity is mobile now for of millions of Pakistanis. As bank-led payment gateways are now accepting credit and debit cards as well as mobile money, the payment menu looks more diverse now, besides cash-on-delivery. Thanks to a relative up tick in economic and security imperatives, many folks seem to be outspending themselves.

No wonder market players are getting more confident. Betting on consumption-oriented Pakistanis, Daraz's sponsor has injected about $5 million just for the Black Friday event, according to a market source. November 27 should be a good test of Daraz to not only showcase its muscle but also attract new users to online shopping.

There are a few observations, however. Such online shopping events can easily turn into an arduous exercise for customers and a demoralizing memory for employees, if things are not done right. Daraz must ensure three things if it is to come out a net gainer: 1) deploy fail-safe measures to handle massive online traffic, 2) ensure payment systems are not choked up; and 3) on the ground supply-chain is well oiled.

Shoppers' response will of course be a function among other things, their purchase intent, product variety, and deals offered. But the issue with importing such an event to Pakistan may be that local people may not relate to it. Black Friday kicks off holiday season in the West, which culminates just after New Year. People look for deals and gifts for loved ones; retailers look to offload their inventories at major discounts before the year ends. That scenario isn't fully applicable to Pakistani customers or vendors.

Maybe if local e-tailers start marketing such deals around festivals (e.g. Eid-related shopping); it would resonate more with the locals. Since the wedding season, usually associated here with the winters, is here, they could market around that. But we now hear that Homeshopping.pk, Daraz's closest competitor, may soon organize a White Friday. Unlike Daraz's tie-up with local vendors for its Black Friday, Homeshopping.pk will secure the best deals for its customers from the Black Friday deals offered abroad.

In any event, such events should cook the pie for the e-tailing sector. It will help the market players in not only on-boarding more and more potential shoppers but also beef up their online and offline capabilities. In the process, they will also reach out to millions of aspirational shoppers in far-flung, rural areas - a phenomenon that made China's Singles' Day a roaring success.