Fed Cabinet Approves the Much Awaited e-commerce Policy Framework

Finally, after such a long wait Cabinet has approved the first e-commerce policy framework. A national e-commerce council will be established under the new framework. It has also been decided that e-commerce will be allocated to the commerce division.

Basically, the e-Commerce policy formulation is a step to fulfill the Government’s vision and commitment to promote and encourage businesses, especially MSMEs to go online and foster the holistic growth of e-Commerce in Pakistan. The new policy is covering and providing guidelines on key components for the promotion of e-Commerce that includes the regulatory environment, financial inclusion, and digitization via payment infrastructure, empowering youth and SMEs, consumer protection, taxation, ICT infrastructure, logistics and engagement in multilateral negotiations. e-Commerce policy is part of the overall ‘Digital Pakistan’ policy launched under the vision of the Prime Minister of Pakistan.

Fed Cabinet Approves the Much Awaited e-commerce Policy Framework

In Pakistan, there are almost 38 million internet mobile users, but still, e-Commerce is at a nascent stage with modest Internet retail sales. However, at the same time, we can’t deny the fact that it is an emerging sector with a noticeable surge in recent past in online vendors, local e-Commerce platforms and online payment facilities introduced by banks and facilitated/enabled by cellular companies through their nationwide networks.

In a span of two months, the number of registered e-Commerce merchants has risen by 2.6 times while e-Commerce payments have increased to 2.3 times. Some e-Commerce businesses that include daraz.pk, pakwheels.com and others are already running a significant business in Pakistan which shows a positive trend for a growing e-Commerce sector of Pakistan. In South Asia, Pakistan is already leading in mobile banking transactions.

The emergence of the e-commerce platform is encouraging inclusive trade along with economic development. As compared with the rest of the world, we know Pakistan is still far away to compete with the international market but the positive thing is that, since the last two decades, Global e-Commerce has been growing exponentially and recorded sales growth of 13% in 2017 with estimated sales of $29 trillion. In addition, the number of online shoppers grew by 12% and reached 1.3 billion.

In developing countries such as Pakistan, e-Commerce can help entrepreneurs to overcome the usual trade channels and reach a global market since Internet-based enterprises can be operated on a very small scale. According to studies, Micro Small and Medium Enterprises (MSMEs) that use e-Commerce platforms are around five times more likely to export than those in the traditional economy.

What do the Recent Studies say Specifically?

Moreover, it has been estimated that the costs associated with geographic distance drop by as much as two-thirds for exporters who use digital trading platforms. This implies potentially substantial gains for small and medium-sized enterprises, as well as female-headed enterprises, which are now able to ‘go global’ much more easily than was possible in the past.

Around 64% of Pakistan’s population is under the age of 29 and is more open to embrace technology. The Government, cognizant of Pakistan’s youth potential, has already launched Kamyab Jawan and Ehsas programs which will be complemented by this policy. Pakistan and its youth have an exciting journey ahead and the promotion and regulation of e-Commerce become more significant in providing employment to around 130 million Pakistan’s youth in the next 30 years.

Note: The study released by Government of Pakistan Ministry of Commerce & Textile (Commerce Division)

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