The global pandemic outbreak, followed by restricted movement of people and goods, compelled companies to instantly delve into innovative digital solutions by adopting tech-driven business and social practices.
As a result, the world will be more digitally enabled after 2020. People have switched more than ever before to the digital, from e-commerce to teleconferencing and remote working, to paperless records and agreements, to digital transactions and payments, in a tele-everything world. This has hastened the current global digital transformation process, especially in the sphere of business and trade across industries.
Covid-induced digitalized events are predicted to continue as a post-pandemic new normal. In-person communication and physical activities, on the other hand, may be resumed only to the extent that they provide the most value to organisations, such as sharing tacit information or capturing social value.
While worldwide trade in commodities and services declined due to the pandemic, the percentage of the e-commerce industry in global retail climbed to 17% in 2020, according to a recent UNCTAD analysis on Covid-19 and e-commerce. This pattern is expected to persist throughout the disease’s healing period. According to the survey, digitalization of consumers and sellers helped to mitigate the harmful effects of lockouts.
While the e-commerce sector and digital trade has been dominated by developed countries, Covid-19 has also steered up the process in developing countries since last year, particularly in Asia. For instance, China’s online retail share increased from 19 percent to almost 25 percent. Similarly, Thailand witnessed an almost 60 percent increase in downloading of online shopping apps in just one week during March 2020.
Pakistan, like many other developing countries, has struggled to keep up with the rate and size of digital technology innovation. Fortunately, at a time when businesses all around the world are experiencing an inflection moment, the digital economy, especially in a technologically backward country like Pakistan, has a lot of potential. E-commerce, e-contracts, e-payments, and electronic firms in a trade processing chain are all seeing unprecedented growth in the digital market.
The e-commerce industry’s market size increased by 35% in the first quarter of 2021, from Rs71 billion the previous year to Rs96 billion in the first quarter of 2021. In addition, the number of online shops accepting prepayment has climbed by a quarter in the last year. It has been widely reported that digital businesses benefited the most from the post-Covid environment, with more than 100 percent year-on-year growth in the past 12 months. As these businesses continue to embrace the digital economy, they will be able to diversify their revenue streams from domestic to international.
One of the main factors that may trigger advancement in digital technology and compliance with it is the spillover effect of the rapid growth in ICT. As the sector outperformed all other export service sectors in FY2021 with 47 percent remarkable growth, the demand of ICT-related sectors including e-commerce increased manifold.
Covid-19 has brought a sudden shift towards online shopping and commerce, as well as online payments, which would have seemed inconceivable even a decade ago, with uneven progress and sluggish growth towards the digital market for Pakistan.
As a country with a large youth population, the ICT industry has a lot of room to grow. From young people to the sceptical age, the online client base has been growing. Almost all brick-and-mortar stores are going digital now that households are looking for internet solutions to purchase essential necessities. Young entrepreneurs, on the other hand, are attempting to capitalise on the emerging potential of the digitised economy.
The adage that “contemporary problems require modern solutions” holds true, as rapid digitization brought with it a slew of new obstacles and limits. Despite the fact that the digital infrastructure is still in its infancy, it has already produced a digital divide in society. Pakistan was placed 76th out of 100 nations in the Inclusive Internet Index 2020, with only 35% of the population having internet access. This has widened the divide between the wealthy and the poor, the educated and the uneducated, the urban and rural. Those who are tech-savvy will have an advantage over those who have little or no access to digital technologies.
Furthermore, online misinformation may readily alter public perception and emotions, resulting in major societal instability, disintegration, and illogical deliberation and policymaking. What’s more concerning are the privacy and security concerns around the unfettered movement of data throughout the country.
To enhance the digital economy, a defined e-commerce regulatory structure and data protection policy are required, given the historic boom in digital firms and marketing during times.
The government has made efforts to establish a local e-commerce system as well as provide internet access to all citizens. One of the various measures taken by the government is the creation of a Universal Service Fund (USF) to expand optic fibre access. Pakistan, on the other hand, would continue to lag behind in technological advancement unless investments in research and innovation are made.
Even though the government’s policies appear to be promising, with new resolutions to improve digital infrastructure, digital skills, and widespread connectivity as part of the Digital Pakistan Vision, the government’s implementation of the existing national digital policy is still a work in progress.
