A Beginner’s Guide for How to Start and Run E-commerce Business in Pakistan

by Hammad Hussain 11 min read
If you are looking for authentic information to start and run e-commerce businesses based on local and international platforms, this blog is for you.

“Ecommerce isn’t the cherry on the cake; it’s the new cake” – Jean-Paul Ago - CEO of L’Oréal.

E-commerce in Pakistan is no longer a buzzword like it used to be a decade ago. Instead, many people now prefer to shop online for everything from groceries to mobile phones.

A sizable portion of the population still doesn’t know the potential of e-commerce and how they can take advantage of it. The good thing is that many people want to know how to do online business in Pakistan and what they need to move forward.  

Let us start by explaining e-commerce and then the prospects of e-commerce in Pakistan. 

What is E-commerce? 

While browsing social media, you might have seen topics like how to start dropshipping in Pakistan or how to start a small online store. All such discussions are related to e-commerce.

Let's start with the definition of E-Commerce - It is the activity of buying/selling products or services online. 

E-commerce is a wide field consisting of ideas such as m-commerce, online transaction processing, inventory management, and supply chain management.

While smartphones and handheld devices have made shopping on the go a norm in developed countries, the situation in Pakistan is still developing. However, given the prospects, many industry pundits see e-commerce taking off in the next 2-to-3 years. 

So, now is the right time to invest in Pakistan's e-commerce and use it to your advantage. 

Popular E-commerce Models

All e-commerce activities can be divided into B2B, B2C, C2B, and C2C.

Business-to Business (B2B) is the e-commerce model that covers the sales of goods and services between businesses. Producers work with wholesalers to sell products to retailers. Examples of B2B e-commerce vendors are Exxon Mobil and Boeing.

Business-to-Consumer (B2C) is perhaps the most common e-commerce model on the internet. Here, producers and service providers directly reach out and sell to consumers. Most online stores and brands are good examples of this model. Some businesses opt for e-commerce support platforms such as Daraz to sell their products. 

Consumer-to-Business(C2B) deals with how consumers offer their services to businesses and get paid. Google Ads and services like Amazon Affiliates are great examples here. 

Consumer-to-Consumer (C2C) is the e-commerce model where consumers directly connect to other consumers to buy and sell products and services. This model is rapidly growing everywhere, including in Pakistan. OLX is perhaps the best example of a C2C e-commerce platform where consumers offer products and services to other platform users. 

Now, I will go into the general details of the e-commerce business in Pakistan, specifically, how to start an e-commerce business in Pakistan and leverage online selling platforms in Pakistan.

Now is the Right Time to Start Your E-commerce Business in Pakistan 

Starting an e-commerce business is a tough call, especially when the internet has made it easy for everybody to create their online store. 

The good thing about e-commerce in Pakistan is that it's easy to start and maintain your e-commerce store. Although the competition is getting fierce, the overall e-commerce sector is still in a growing stage. 

So if you start now, you can get a significant advantage over brands and stores that come after. By investing now in the e-commerce business in Pakistan, you could establish a reputed and much-loved brand in a couple of years and then scale up your business to dominate your niche. 

The future for e-commerce in Pakistan is bright. A wave of young entrepreneurs is entering the industry and bringing in new ideas and technologies that change how you can start an online store in Pakistan and make it work. 

The Current Pakistani Ecommerce Scenario 

Pakistan is the fifth most populous country with a market of 220 million people. By 2030, it is expected to leave Indonesia behind as the largest Muslim country by population and become the 4th largest country in terms of population. 

This considerable population has a large section of people familiar with the internet and e-commerce. As a result, the market is open for all sorts of online businesses and brands. 

While Pakistan has a predominantly agriculture-based economy, B2B and B2C platforms are growing and helping people tap all the benefits of e-commerce businesses in Pakistan. 

You'll find people asking how to start dropshipping in Pakistan or similar activities because of this emerging growth. Online selling platforms in Pakistan are now among the top-visited websites in Pakistan for good reasons - people understand the ease of online shopping and want to save time and money without having to visit the traditional markets. 

Do I Need a Website for Setting up an Ecommerce Business 

“Remember, every ‘mistake’ your customer makes, it’s not because they’re stupid. It’s because your website sucks” - Peep Laja - Founder of ConversionXL.

The short answer - is YES!

A website adds to the credibility of your brand and encourages your customers to explore your products and buy directly from your store. 

Many people think that social media platforms such as Facebook and Instagram are quick and cost-effective solutions for starting e-commerce businesses in Pakistan. However, potential customers don't actively trust these social media-only brands because of the chances of fake accounts. 

The good thing is that starting a web portal for your online business in Pakistan is not that difficult. Platforms like Webx fit the bill perfectly and offer several solutions for creating online stores in Pakistan.

Now that you know how easy it is to set up a website for your store, I will now discuss the next question that might pop into your mind: What type of platform is better for starting an online store in Pakistan. 

A Customized Website Solution from Scratch or a Platform like Shopify? 

Depending upon your business requirements and preferences, the development time required to create a customized e-commerce website could stretch to several weeks or months. 

Nobody likes to wait that long to launch their dream brand!

Hence, platforms like Shopify have become popular for launching online stores and brands within minutes. You sign up for an account, spend some time designing your storefront, and launch your e-commerce business in a few days.

Similarly, Webx is one of the best online selling platforms in Pakistan. It is built for people who want to launch their stores but have little knowledge of e-commerce operations. 

There is no initial fee; you get all the services at a clearly defined price. In addition, the platform is highly secure and guarantees 99.99% store uptime. 

So, if you're new to the e-commerce scene and want to launch your store without getting caught in the complexities, you should check out Platforms such as Shopify and WebX.

The Secret to a Successful E-commerce Business

“Amazing things will happen when you listen to the consumer” - Jonathan Midenhall, CMO for Airbnb.

There are no shortcuts to starting and running an e-commerce venture. Regardless of the size and nature of the business, business owners need support from industry experts who could guide them in the initial years when the business is the most vulnerable to failure. A research on failed startups reveals that a staggering 90% of them fail during the initial three years. That’s why you need to invest extra effort when starting online stores in Pakistan. 

You need basic knowledge (or a partner with an e-commerce background) to deal with challenges such as fraudulent activities, including credit/debit card frauds.

The secret to how to do online business in Pakistan and run a successful one lies in your knowledge about your industry and the platforms and services you are using for your business. 

It helps if you focus on growing the number of satisfied customers who return to your store for more and spread the good word about your products and services. 

What’s Pakistan’s Future in E-commerce

The future of the Pakistani market is bright!

Pakistan-based startups off-late have secured massive funding, with Airlift leading the way with $85 million. Overall, since January 2021, the total amount raised by Pakistani startups has been an impressive $486 million. 

The E-commerce business in Pakistan is evolving quickly. Initially, e-commerce in Pakistan was all about online products such as electronics and similar consumer items. Now, services like Airlift have made it possible for anyone to order groceries, snacks, or even fast food, right from their mobiles. 

Top Reasons to Invest in E-commerce in Pakistan

Pakistan went through a challenging phase with political uncertainty, and the COVID-19 pandemic slowed its economic activities. 

However, online businesses saw an uptick in revenue as people shifted toward buying from online stores. For many people busy in their professional lives, online shopping is now the way they regularly shop for everything from smart TVs to household groceries.

On the technology front, Pakistani businesses have access to the latest technologies, tools, and infrastructure, with 5G services coming soon. This will only increase the potential of e-commerce in Pakistan as more reliable internet services would allow more people to buy from online shops. 

An increase in online selling platforms in Pakistan will eventually make things easy for everyone. In addition, local virtual payment methods such as branchless banking apps simplify online transactions and add to the growth of the local e-commerce scene. 

All these developments will make e-commerce more accessible to common people and fuel the growth of local brands.

A Checklist for Starting an E-commerce Business in Pakistan

Starting an e-commerce store or brand in Pakistan is now easier than ever. 

Thanks to easy access to international platforms such as Shopify and the success of home-grown e-commerce facilitation platforms such as Webx, anyone with sufficient expertise can launch their store and start selling online. 

Here’s a brief checklist covering the significant steps of setting up small to mid-sized e-commerce businesses in Pakistan.

1. Research Your Potential Customers

Research is the logical starting point of starting any business. 

For setting up an e-commerce business in Pakistan, you need to find out about your potential customers (also known as the target audience). Knowing their preferences and preferred prices will help you source your products and market them to your customers smartly. 

2. Work on Sourcing Products 

Once you are done with customer research, the next item on your agenda should be where you’d source your products. 

You need to find suppliers who can provide the products in sufficient quantities and at the rice price. This allows you to compete with the competitors and offer reasonable prices to your customers. Diversifying your sourcing strategy is a good option because you can ensure supply even when your primary supplier cannot fulfill your requirements. 

3. Be a Trendsetter

Following a trend will get you good results, but your audience will go wild if you can become a trendsetter. Think of a scenario where you can launch a new version of an already-hit product or introduce a product that wasn’t available to your customers. Always try to be one step ahead of the competition to get a substantial first mover’s advantage. 

4. Select a Reliable Distribution Network

Online businesses need a reliable distribution network to reach their customers quickly. A trustworthy distribution channel partner will help you get more out of your business by offering services that help you reach more customers with minimum efforts (and investment). 

5. Use Convenient Payments Methods

Cash on Delivery (CoD)is still the preferred payment method for most Pakistanis. Because of various reasons, the local audience doesn’t prefer to use their credit/debit cards for online shopping. However, it would help if you plan to offer multiple payment methods to capture all types of customers. Local platforms such as Webx support various options, including credit cards. 

6. Choose the Right Name 

Start by buying a domain name that best describes your services and products. As mentioned earlier, you can start selling anything through Facebook and Instagram, but a proper domain name adds a layer of trust for the customers. If your audience is local, a .pk domain extension will tell your audience you are from Pakistan and is easily accessible in case things go wrong. 

7. Invest in Brand Advertisements

Advertising your products on multiple channels (including social media platforms) is an excellent way of reaching the local audience. Facebook and Instagram are obvious choices, but for some businesses, getting traffic to the website may be better for generating sales and profits. 

Conclusion

“Communication is at the heart of e-commerce and community” – Meg Whitman, Hewlett-Packard CEO.

Ecommerce in Pakistan is booming, thanks to diverse solutions offered by local and international platforms. Setting up an e-commerce business is not that difficult, and there is always room for improvement. 

Launching an e-commerce business in Pakistan is easy, but you need to invest time to grow the brand. Start with researching the target audience and then offer the products and services that they’re looking for is the actual recipe for success.  

If you liked this guide, leave a comment below or ask your questions in the comments section

FAQs

How can I start an e-commerce business in Pakistan?

Starting an e-commerce business in Pakistan is easy enough. First, you need to research your target audience and source products at a competitive margin. After that, get a reliable platform to host your business and open up for business!

Is e-commerce profitable in Pakistan?

The share of e-commerce in the local business revenue is increasing, thanks to a huge population with a significant section below 30. Given the advancements in technology and increasing trust in local payment methods, e-commerce businesses are making good profits. To put this into perspective, Pakistan is the 37th largest market in terms of revenue. In 2021, Pakistani business people earned $6 billion in online revenue.

Which is the largest e-commerce store in Pakistan?

Daraz is the biggest e-commerce store and marketplace in Pakistan, with millions of products offered to the Pakistani audience. On the platform, apparel is making a killing, with Gul Ahmed generating over $75 million in 2021 as first-party net sales. 

Related Posts