Pakistan’s e-commerce market ranks 46th in the world

BEIJING: Pakistan’s e-commerce sector is rapidly making its presence felt on the international stage and is now the 46th largest market in the world, according to the International Trade Authority.

This upward trend is driven by a growing middle class, widespread use of smartphones and the internet, developing e-commerce infrastructure and strong government support.

The latest forecast from Statista, a leading global data and business intelligence platform, highlights the impressive progress of Pakistan’s e-commerce sector. In 2023, the market was expected to generate $5.2 billion in revenue, putting Pakistan ahead of many other developing countries. The sector is expected to maintain its momentum, with a compound annual growth rate (CAGR) of 5.92% from 2024 to 2029. By the end of the period, revenue is expected to reach $6.711 billion, according to a report by China Economic Net (CEN).

Pakistan’s distinction as a mobile-first country is clear, with over 80% of internet users accessing the web via smartphones. This mobile dominance is also reflected in e-commerce, where 58% of users made purchases via mobile devices in 2023 – a number that is expected to grow even more.

Data from DataSparkle highlights the growing engagement in mobile shopping apps. In July 2024, the number of monthly active users of these apps in Pakistan crossed 16.6 million, showing the rapid growth of mobile e-commerce and the growing acceptance of in-app purchases by consumers.

The lucrative potential of Pakistan’s e-commerce market has attracted both international and local platforms. Global giants like Alibaba’s AliExpress and Amazon are entering the Pakistani market, while homegrown platforms like Daraz, DealCart and Savyour are also thriving. Daraz, a leading South Asian e-commerce platform acquired by Alibaba Group in 2018, continues to dominate the Pakistani market, boasting over 7 million monthly active users as of July 2024, according to DataSparkle.

The growing market has also attracted the attention of international players, with platforms like SHEIN and Temu set to be among the top 15 most popular shopping apps in Pakistan by mid-2024.

Despite its current scale, Pakistan’s e-commerce market has huge potential. The sector is entering a phase of rapid expansion, fueled by favorable government policies that include tax incentives and financing options for e-commerce businesses. With ongoing infrastructure investments, Pakistan is poised to catch up with regional peers like Indonesia, the Philippines, and Bangladesh.

However, the growth of the market is accompanied by increasing competition. In order to attract the interest of consumers, e-commerce platforms are making significant investments to increase their market share, focusing on key factors such as price, quality, logistics, service and payment options. Of these, price remains the most important factor for Pakistani consumers.

Another emerging trend is the growth of social commerce. As of January 2024, Pakistan had 71.7 million active social media users, providing a solid foundation for this new path of e-commerce. Statista predicts that social commerce revenue will reach $14.74 million by the end of 2024, a significant 30% year-on-year growth and solidifying its role in the e-commerce landscape.

With its immense potential and rapid growth, Pakistan’s e-commerce market is attracting attention from all over the world. With evolving consumer behavior, increasing use of mobile devices, expanding influence of social media and strengthening government support, Pakistan’s e-commerce sector is poised to achieve even greater milestones, becoming a formidable player in the global digital economy.