The link between the two became much more evident during the global COVID-19 pandemic. The hardest hit by the pandemic have been the small and medium businesses that are also the most crucial for developing economies like Pakistan. Digital marketplaces and online platforms are important channels for growth to SMEs going digital, and hence central in the digital transition of economies. COVID-19 expedited this process for as it opened new sales and sourcing channels for these small businesses.
Despite the evidence that suggests that SMES can improve productivity by leveraging online platforms as well as the lift that the pandemic provided these SMEs and small sellers and traders, small and medium business uptake remains hesitated and relatively limited. They face challenges and risks in operating on online platforms and a crucial one is the fear associated with selling online. In a country like Pakistan where literacy rate of 59 percent is also debatable and understanding and access to internet and technology is limited and fragmented, these fears are unsurmountable for sellers who have been operating exclusively offline for years.
In the same vein, a lot has been said - specifically during this last year - about how ecommerce is the future of retail and how it transforming the conventional brick and mortar sales model. Endless stream of articles, opinion pieces, and editorials have been written and many surveys have been conducted about COVID’s strengthening impact of ecommerce. Majority of them talk about retail from the customer convenience, experience, and options perspective and other benefits that the digital marketplace brings with itself. While some do focus on how getting on the ecommerce bandwagon is beneficial as well as crucial for sellers and traders, very little focus is on how small businesses or sellers/traders can create an online presence – and even fewer on what challenges these small sellers face in selling their products/services online how can they be facilitated in ‘going digital’.
The oft ignored sellers in the discussion of digital retail and ecommerce are faced with many challenges that include the lack of digital skills, procedure to sell online, fee structure, need to adapt business models, cash flow management, and inventory management to name a few.
Talking to BR Research, Ehsan Saya, MD Daraz highlighted that the key fears for sellers on the country’s largest online platform have been cashflow and supply management because Pakistan is an import driven country. (check the Brief Recordings on Friday April 16, 2021 for a complete discussion of BR Research with MD Daraz). In order to facilitate sellers, grow their business online and improve sellers’ experience, Daraz has come up with a number of initiatives in 2021 such as paying sellers it’s not twice as fast from 14 to 7 days; or responding to seller queries online within 30 seconds; or providing support to sellers to identify product gaps; or just help them by making it faster to file a claim.
A key element for small and medium businesses and sellers is that online marketplaces enable them to trade across larger customer base as well as provide them wide range of complementary services such as insights into their sales, products, logistic etc. However, these benefits of going digital can only be cashed in this fast-digitizing world when they go hand in-hand with seller support and seller awareness in the same realm.
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