LAHORE: The courier delivery time, high frequency of order cancellations and returns, fake orders, delays in Cash-on-Delivery (CoD) payments by the courier companies, and payment gateway/digital payments issues are the biggest challenges faced by organized retailers while conducting online sales through e-commerce during the COVID-19 pandemic in Pakistan.
Further, the internal bottlenecks due to unexpected orders (during and post-lockdown period), website related problems/technical issues, after-sales support issues, e.g. refunds, exchange, ineffective performance of the digital marketing, international shipment related issues, inventory issues are the other issues being faced by the organized brands of Pakistan while doing online business.
These are findings of a survey conducted by the Chainstores Association of Pakistan (CAP) titling ‘e-Commerce during the Pandemic’ from its members. The respondents of the survey are members of CAP consisting of known small, medium and the largest brands of Pakistan some with their footprints in global markets as well.
The survey was conducted in January 2021 for the period of the e-commerce sales from July-December 2020. The delays in courier delivery time is the biggest challenge faced by the retailers with 48.3 percent of share of the issues, followed by high frequency of order cancellations 46.7 percent, high frequency of returns 40 percent, fake orders 38.3 percent. Further, payments related to e- commerce also remained a big issue for the retailers as 33.3 percent complained about delays in COD payments by courier companies and payment gateway/digital payments issues as well.
According to Pakistan Bureau of Statistics (PBS) data, Pakistan’s retail trade for 2019-20 was estimated to be Rs7 trillion (16 percent of GDP). Presently, the ‘organized retail sector’ comprises approximately 8-10 percent of the entire trade and has been growing over 20 percent annually for the last decade. Further, the recent data of the State Bank of Pakistan (SBP) shows the total value of domestic e-commerce transactions in the country has risen to over Rs350 billion, based on an industry-estimate of 90 percent of transactions being processed through Cash-on-Delivery (CoD) mode, in the last four quarters up to Q1’FY2021 registering a 35 percent growth during the corresponding period of previous year. The survey found out that 48.3 percent of the retailers had conducted more than 10 percent of their sales through online during the first spell of the Covid-19 pandemic. Majority of the Chainstores were not utilizing or giving sufficient focus towards the online sales channel before the spread of pandemic in Pakistan. However, the pandemic and closing of the businesses, markets, standalone stores and mega shopping malls compelled them to tap these areas.
By far, CoD remained the most prevalent mode of payment during the online sales of the products of the multi-channel brands in Pakistan during the pandemic. The survey finds out that 86.7 percent of retailers processed over 70 percent of online orders via cash-on-delivery method. Further, 55 percent of the respondents told that over 90 percent of overall revenue of the e-commerce business is dependent on the CoD sales. The survey finds out that majority of the retailers in question are using more than one digital payment gateways.
The survey identified that 55 percent of Pakistani retailers are accepting international orders which reflects that overseas Pakistanis are also purchasing Pakistani brands via e-commerce. The survey finds that retailers are using various different advertising platforms for their sales drive and fetching orders through these platforms. More than 21 percent of retailers are using one to two online platforms and more than 80 percent using three or more platforms for marketing their products to get online orders.
Copyright Business Recorder, 2021