Pakistan’s economy has faced numerous challenges, including inflation, unemployment, and low growth rates. However, the rise of mobile commerce (m-commerce) may present a promising solution to these issues. In recent years, m-commerce has taken the world by storm, and Pakistan is no exception. The m-commerce industry in Pakistan has seen significant growth in recent years due to the increasing mobile phones penetration, the rise of social media and the growing popularity of online marketplaces.
According to a report by eMarketer, m-commerce/m-commerce sales in Pakistan are expected to reach $2.1 billion in 2023, up from $1.2 billion in 2018.While m-commerce in Pakistan is still in its early stages, it is increasing rapidly. The State Bank of Pakistan reported an increase in the number of registered e-commerce merchants from 571 in 2015 to 1,516 in 2019. Additionally, e-commerce/m-commerce transactions rose from 3.4 million in 2015 to 29.7 million in 2019.
Pakistan’s youth bulge is a well-known phenomenon, with many young people entering the job market every year. Unfortunately, the formal job sector cannot accommodate all these young people, leading to high unemployment rates. M-commerce or freelancing, on the other hand, can provide numerous job opportunities in various areas, including logistics, customer service, marketing, and technology. This, in turn, can help reduce unemployment rates in the country, improving the economic conditions.
M-commerce can help increase the country’s exports. Pakistan’s exports have declined over the years, and the government has struggled to find new markets for its goods. However, m-commerce can help Pakistan reach new customers and markets worldwide. Online marketplaces such as Amazon, eBay, and Alibaba provide an excellent opportunity for Pakistani businesses to sell their products to customers across the globe. This can help increase the country’s exports, increase foreign exchange reserves, and improve economic conditions.
One of the main reasons for rising inflation in Pakistan is the high cost of doing business. Traditional brick-and-mortar businesses must deal with numerous challenges, including high rents, utility bills, and expensive inventory management systems. However, m-commerce can help reduce the cost of doing business significantly. Online companies do not require physical storefronts, leading to lower rents and utility bills. Moreover, online inventory management systems are cheaper and more efficient than traditional ones, reducing the cost of inventory management. This, in turn, can help reduce the prices of goods and services, leading to lower inflation rates in the country.
Pakistan is largely a cash-based economy, and a significant portion of the population is unbanked. However, m-commerce can help improve financial inclusion by providing digital payment solutions.
Online businesses can offer various digital payment options, including credit cards, debit cards, mobile wallets, and online banking. This can help people who do not have access to traditional banking services to participate in the digital economy, leading to a more inclusive and diverse economy.
Although m-commerce has brought many benefits to the development of Pakistan, the industry also faces some challenges. Pakistan’s infrastructure is not well-suited to m-commerce. The country’s logistics and delivery systems are underdeveloped, making it difficult for businesses to deliver products to customers promptly and cost-effectively.Despite the challenges facing Pakistan’s m-commerce industry, the future looks bright. The government is improving the country’s infrastructure, and internet penetration is expected to grow. This means that m-commerce will become accessible to more and more people, leading to further industry growth.
In conclusion, m-commerce can play a significant role in supporting Pakistan’s falling economic conditions. The rise of m-commerce can create job opportunities, increase exports, reduce inflation, and improve financial inclusion in the country. The government and the private sector should work together to create an enabling environment for m-commerce to flourish in Pakistan. This can include developing infrastructure, providing regulatory frameworks, and investing in technology and human capital. By doing so, Pakistan can leverage the power of m-commerce to achieve economic prosperity and stability.
Copyright Business Recorder, 2023