Tech Week in Pakistan (Issue 27: 29th September)
This weekly newsletter focuses on the most important new developments within Pakistan’s Technology Sector. To receive this newsletter on a weekly basis subscribe to our mailing list (no spam ever) or follow me on Twitter @adamdawood. Previous installments of the newsletter can be found here.
eCommerce Growing in Pakistan
A dearth of articles on the current position and potential of the eCommerce market in Pakistan shows how quickly its reaching public acceptance. According to articles in the Tribune and Dawn the sector is going to hit $1 billion in revenues within 3 years with sales growing by 15–20% annually. Large FMCG’s have also entered the fold with Unilever taking the first major step with its Wall’s brand offering free home delivery in major cities and the parent company started selling its goods with Daraz.pk.
The current market is estimated at between $25-$30 million annually, most of these transactions happen through the COD method, where the last mile logistics players collects cash from the customer. This method of payment is the most pervasive in the country with over 90% of transactions believed to be according to this method. Major growth is expected to come from second and third tier cities in Pakistan, with 50% of orders coming from outside Karachi, Lahore and Islamabad/Rawalpindi, and at Kaymu.pk 29% of orders coming from rural areas. Local 3PL’s are also integrated with eCommerce, with TCS running TCS Connect its electronics marketplace and Leopards recently acquiring StyleShop.pk a fashion focused e-tailer.
Niche Online Models
With the large focus on online commerce across multiple media channels over the last few weeks, Online Pharmacies are an interesting business model for selling products online. Current players in the local market include Sehat and Dawaai. In a blog post, Sehat’s state’s that 70% of all orders in a pharmacy are for recurring or persistent conditions rather than one-off or immediate needs. Their average cart value overall from individual customers is PKR 2,300; for prescription orders only, the average value is PKR 7,400.
Markhor a local eCommerce site primarily focused on hand crafted shoes has recently launched a very well subscribed KickStarter campaign. The campaign has till now raised over $41k and with the funds raised they are looking to help the local artisans that create the shoes sold on their website.
Road Runner is a Lahore based delivery service which provides pickup and drop-off for any item that their customers are looking to procure. The service which launched in 2012 is turning into a staple amongst Lahori’s who want their DVD’s, cinema tickets or even groceries delivered without having to wait in line or go through the hassle.
BabyPlanet.pk is a e-tailer focused on the needs of babies and provides parents with everything they need from diapers to strollers. The company was incubated at Plan9 and is joining PlanX the PITB’s recently launched accelerator program. The company is supposedly received double digit orders on a daily basis and has 8 full time employees.
PetPeople.pk is focused on the needs of all PetParents with sales of pet food, toys, accessories and heretical items. The company launched 4 months ago and has since then has begun importing products directly from US based manufacturers to cater to the local pet market. Disclosure: I am a co-founder in PetPeople.pk
Update on 3G/4G
Since the 3/4G auction in April, Zong is now commercially launching its 4G service. At a news conference Zong announced that it will be launching the service in 7 cities with packages starting as low as Rs. 350/month for 2GB and going upto Rs. 3,500 for 30GB. The company also announced that it currently has 866,000 customers on its 3G service. According to the Tribune and Telenor 46% of 3G usage is on Facebook, with the average 3G users consuming twice as much data as a normal EDGE user.
- A Conversation with the Founders of EayOye | TechJuice
- Domino’s Launches New Android App | Play Store
- Microfinance: Opening an account in a minute | Tribune
- Pakistani helps Google Avoid Privacy Disaster | Tribune
- Editorial on the YouTube Ban | Dawn
- Daraz.pk Aims to be Pakistan’s TMall | BRecorder
- Daraz.pk officially selling Samsung Products Online | ProPakistani
Disclosure Statement: I am currently employed as the Country Manager of Kaymu.pk, a venture funded by Rocket Internet. All news pertaining to Kaymu, Rocket Internet or any of their investors and holdings are released as and when they are reported in the media.