Challenges and Opportunities for E-Commerce in Pakistan

Abstract

The United Nations Conference on Trade and Development (UNCTAD) reported that global e-commerce sales reached $25.65 trillion in 2018, accounting for 30% of global GDP. In 2018, over 1.4 billion individuals participated in e-commerce. The volume of business-to-consumer e-commerce is highest in Hong Kong, China, and the United Kingdom. In the United Kingdom, 87% of internet users have engaged in online shopping, whereas in India, only 11% have participated in e-commerce. Pakistan, with a population of 116 million and over 50% of its populace having access to the internet (broadband, 3G, and 4G), presents significant opportunities for e-commerce. Nevertheless, Pakistan has yet to fully harness its e-commerce potential. According to the 2019 business to e-commerce index published by UNCTAD, only 5% of internet users and 1% of the total population in Pakistan engaged in online shopping in 2017. This figure is significantly lower in comparison to other regional and developing nations. The primary factors contributing to the limited volume of online shopping in Pakistan include a lack of trust in e-commerce platforms stemming from an inadequate regulatory framework, cybersecurity threats, data privacy concerns, and various cultural, social, and psychological barriers. The Government of Pakistan has articulated its vision through Digital Pakistan and introduced the inaugural e-commerce policy in 2019.