Digitization is transforming in Pakistan’s services sector. The shift is most prominent in the domains of e-commerce, fintech, and e-government, where new ventures and approaches to deliver services are gaining momentum. Specifically, the market size of e-commerce has grown significantly in Pakistan over the last few years. Economic experts forecast that Pakistan’s e-commerce sales are projected to cross the one billion dollars mark by 2020 as compared to $622 million recorded in 2017. Leading Pakistan into the Digital Age.
At the forefront of this e-commerce, buzz stands Daraz, leading the industry with worthy contenders such as Yayvo, Aliexpress, and Goto.
Leading Pakistan into the Digital Age
A pioneering online retailer acquired by global tech titan Alibaba in 2018, Daraz has fostered a growing community of 30,000 marketplace sellers and has partnerships with 400 leading brands. Most successful online retailers are multi-category sellers offering everything from gadgets to groceries. Daraz boasts a catalogue of 7 million products. The platform’s growing assortment includes everything from electronics to fashion and groceries. In March, Daraz became the first e-commerce company to sell a car online. A few months later, during the Hari Bari Eid Sale, Daraz’s catalogue came to include cattle. More than 2 million products are sourced from international vendors and parked under Global Collections, a service that allows the platform to meet the growing demand among locals for goods not easily accessible in Pakistani markets.
Finding creative solutions
Over the years, Daraz has come to occupy a unique position through which the platform has been able to find creative and innovative solutions to the challenges faced by e-commerce companies the world over. Logistics has remained one of those major challenges. Unless a company has the bandwidth to focus on logistics, this essential but complicated element can be a painful drain on a company’s resources. The solution for Daraz lay in the launch of Daraz Express (DEX), Pakistan’s first logistics company specifically designed for e-commerce operations.
Today, one year after its launch, DEX employs 1,000 riders and delivers 30,000 packages daily. The service has helped Daraz decrease the order delivery time by 1-2 days. The logistics company also delivery 90% of next day deliveries for Fulfilled by Daraz, the platform’s premium service. It is a vital part of a larger, digitised and cohesive logistics network that Daraz has established.
At the core of this network stand Daraz’s four warehouses located in Karahi, Lahore and Islamabad. More than 30% of the top-selling products on the app are stored in the warehouses, which are collectively spread out on an area of 200,000 square feet, contributing to Daraz’s physical presence.
Establishing a physical presence
In recent years, e-commerce companies have geared efforts to establish their physical presence; to bridge the gap between online and offline. Telemart, Daraz, and Yayvo all have some sort of physical presence. Similarly, Daraz has established 47 Daraz Shops or hubs in 19 cities across Pakistan to facilitate customers and sellers, alike. Representatives present at these shops are able to help customers place orders and return their products. Sellers are also able to drop of orders to these hubs where they are collected by DEX riders to be delivered to customers. As such, hubs form important touchpoints in Daraz’s overall logistics network. They have helped Daraz narrow the gap between online and offline and played an important role in expanding the scope of the e-commerce industry in Pakistan.
The past few years, the digital payment infrastructure in Pakistan has gradually evolved. Encouraged by a rapid rise in branchless banking accounts (also called mobile wallets). Ant Financial Services, China’s biggest online payment service provider, recently bought a 45% stake in Telenor Microfinance Bank. Similarly, Daraz has introduced a number of payment methods to encourage customers to move towards digital payments. Daraz aims to introduce digital payments to 10 million new customers by 2022.
Earlier this year, the Daraz Wallet was introduced to reduce the check-out time on the app. Since then, more than 550,000 wallets have been activated on the app. More recently, by collaborating with the leading banks in the country, Daraz launched Easy Monthly Installments, a service that makes shopping on the app more affordable and propels financial inclusivity in the country.
Daraz has been working to actively drive change in the e-commerce industry and Pakistani commerce and society, at large. By introducing various methods of digital payments and finding creative solutions to the challenges e-commerce companies face, Daraz is helping shape the future of e-commerce. The company aims to lead the country into the digital age by 2022.