Pakistan’s e-commerce industry is grappling with the challenges of fake orders, payment security concerns, and inadequate addressing systems, hindering its growth potential. To address these challenges, industry stakeholders are exploring innovative solutions to optimize order confirmation and payment processes.
Recently, an online discussion forum brought together Pakistan’s e-commerce leaders to discuss the challenges and opportunities facing the industry. The conversation highlighted the need for collective action to address the issues of fake orders, payment security concerns, and inadequate addressing systems. One of the key takeaways from the discussion was the importance of implementing effective order confirmation methods.
Auto-order confirmation through WhatsApp
Emerged as a top performer, with engagement rates reaching up to 70 percent. In contrast, robo-calls yielded lower success rates of around 30-40 percent. However, some participants found IVR calls effective when combined with additional checks, achieving a remarkable 94 percent delivery ratio. A multi-step verification process, which typically involves initial IVR calls, address checks, booking confirmation, and warehouse staff verification, has also shown remarkable results.
The role of technology cannot be overstated in this context. WhatsApp Business API has emerged as a game-changer, providing a seamless customer experience. Automated order confirmations reduce the need for manual calls, increasing efficiency and allowing businesses to focus on other critical aspects of their operations.
However, payment security concerns persist, particularly with debit card payments. Debit card payments take 15 days to clear, making it challenging for businesses to manage cash flow. This highlights the need for more efficient and secure payment systems. Industry experts emphasized the need for innovative solutions, such as implementing WhatsApp Business API, leveraging GPS-based location sharing for address verification, and developing a centralized database for customer ratings.
Inadequate addressing systems also plague Pakistan’s e-commerce industry. The lack of standardized addressing makes it difficult for businesses to verify customer locations, leading to increased order refusal rates. GPS-based address verification has shown promise in addressing this issue, reducing order refusal rates from 30 percent to 7 percent. One executive shared that implementing GPS-based address verification reduced order refusal from 30 percent to 7 percent.
To support Pakistan’s e-commerce growth, policymakers must develop and implement standardized addressing systems, enhance payment security infrastructure, encourage industry-wide adoption of digital payments, and provide incentives for businesses to invest in technology and innovation. By addressing these challenges, Pakistan’s e-commerce industry can unlock its potential, providing opportunities for businesses and customers alike.
Ultimately, streamlining order confirmation processes is just the beginning. With a more efficient, secure, and customer-centric e-commerce ecosystem, Pakistan can emerge as a leader in the regional digital economy. The country boasts over 100 million e-wallets and 170 million bank accounts, indicating a significant potential for digital payment adoption.
However, cash-on-delivery (COD) remains a preferred payment method, and experts suggested incentivizing digital payments and enhancing payment security measures to boost confidence. The discussion also touched on the role of companies like Ginkgo, Unity Retail, and Smartlane in providing valuable insights and statistics to inform industry-wide strategies.
Some participants noted that platforms like Daraz and Amazon charge extra for COD orders, which could encourage digital payments. Operational issues, such as inadequate staffing and training during peak periods, contribute to delivery challenges. A lack of structured debriefing processes for returned shipments hinders understanding of failed delivery attempts.
Experts proposed solutions, including making COD more expensive, sharing data on problematic customers, and implementing industry-wide disclaimers for fraud or serious return issues. The importance of educating customers about digital payment benefits and protection was also emphasized. By working together, Pakistan’s e-commerce industry can overcome its challenges and achieve its full potential, providing a seamless and secure online shopping experience for customers and driving growth for businesses.
Some Insights:
E-commerce:
1. 70%+: Engagement rates for WhatsApp order confirmation
2. 30-40%: Success rates for robo-calls
3. 94%: Delivery ratio achieved through multi-step verification
4. 300+: Orders per day for some e-commerce businesses
Digital Payments:
1. 100m+: E-wallets in Pakistan
2. 170m: Bank accounts in Pakistan
3. 6-7 PKR: Cost of OTP messages
Payment Security:
1. 15 days: Debit card payment clearance time
2. 40 days: Account hold time for chargeback resolution
3. 5k-10k: Amount range for chargeback disputes
Logistics and Delivery:
1. 30%: Initial order refusal rate
2. 7%: Order refusal rate after implementing GPS-based address verification
3. 5: Number of returned orders out of 100
4. Extra charge for COD orders
Insights From Virtual Session between Ecom Stakeholders.
Pakistan’s Digital Landscape (2024):
1. 242.8 million: Total population
2. 111 million: Internet users (45.7% penetration rate)10. 100 million+: Mobile phone users with 80 million+: 3G/4G subscribers in Pakistan
3. 71.7 million: Social media users (29.5% of population)
4. 188.9 million: Mobile connections (77.8% of population)
5. 44.5 million: Facebook users
6. 17.3 million: Instagram users
7. 54.38 million: TikTok users (aged 18+)4. 8.29.5%: Social media penetration rate in Pakistan
9. 0%: Social media user growth between early 2023 and early 2024
Digital Growth:
1. 27.1%: Increase in internet users between Jan 2023 and Jan 2024
2. 20.7 years: Median age of population
E-commerce Growth:
1. 37%: Average annual growth rate of Pakistan’s e-commerce market (2020-2025)
2. $1.2 billion: Estimated value of Pakistan’s e-commerce market (2022)
Demographics:
1. 65%: Population under 30 years old in Pakistan
2. 35%: Urban population in Pakistan
Stats from Dataportal/Statistica
