How Online Shopping Has Impacted Retail in Pakistan

In the last few years, there has been a vast shift in the retail sector of Pakistan, with the buying of clothes and other goods done online. The Internet, Smartphones, and a new generation with a technological orientation toward shopping have made e-commerce a dominant force replacing traditional retailing. From Amazon to Daraz and Foodpanda, the tendency of new consumer behavior, the retail industry, and business models are going online.

This article focuses on the development of online shopping in Pakistan, its impact on conventional shopping, and prospects for e-shopping in the country.

A Growing E-Commerce Industry in Pakistan

The e-commerce industry in Pakistan has been on the rise for the past ten years. In 2024, the sector will continue to grow because of the government’s push towards digitalization, the National E-Commerce Policy, and the increasing competition of start-ups in the market.

Several factors contribute to this growth:

• Internet Accessibility: Over 125 million Pakistanis now have access to the Internet, creating a vast customer base for online retailers.
• Smartphone Penetration: Affordable smartphones have made it easier for people to shop online, even in rural areas.
• Digital Payment Options: EasyPaisa and JazzCash are the most common examples of digital transaction that is making the purchasing process easier online.
• Youthful Population: Pakistan’s young and tech-savvy demographic is driving demand for online shopping, particularly in categories such as fashion, electronics, and groceries.

The market for e-commerce was expected to be $5.92 billion in 2022, and it is expected to grow at a very steep rate in the coming years. This strong growth re-emphasizes the fact that the sector has the potential to revolutionize retail.

Impact of Online Shopping on Retail

E-commerce in Pakistan has brought a drastic change in the retail sector of the country. Here are five key ways in which it is shaping the industry:

1.    Decline in Foot Traffic to Brick-and-Mortar Stores

The physical market places are being congested since more people are opting for online markets. No more having to drive through the bustle, no more standing in a long line at the store, and no more going outside the house to shop have made e-commerce appealing to many individuals. Some of the retailers who are located in malls and high streets experience some challenges in their sales and they have to adapt quite frequently.

2.    Emergence of Omnichannel Strategies

As a result, to remain relevant, more and more traditional retailers are turning to the concept of omnichannel retailing — the integration of physical and online shopping. For example, Khaadi, Gul Ahmed, etc which were traditionally retail stores have now expanded their business and have almost equally strong online selling platforms. Customers can order the products online or buy them physically in the store. This integration makes it possible for businesses to meet the needs of the consumers as long as they remain relevant.

3.    Increased Competition Among Retailers

Hyper-competition has been attributed to the emergence of new competitors, such as online-only retailers. Today’s online market players, such as Daraz and Foodpanda, are using strategies like high discounts, flash sales, and other strategies that put traditional retailers under pressure. Therefore, traditional retailers have to pay their attention to the quality of the customer experience and personalized services.

4.    Transformation of Supply Chain and Logistics

Modern development in electronic commerce which has led to the increase in operations of e-commerce has contributed to the development of supply chain and logistics operations. Businesses today ensure that they deliver their products in the shortest time possible to satisfy the customers. TCS, Leopards, and other new players like Trax have stretched out their operations and enhanced their networks to meet the growing traffic.

Also, the retailers are employing data analytics to better address issues to do with stock holding and acquisition since they do not want to be caught up with excess stock or no stock at all.

5.    Impact on Consumer Behaviour

This has shifted the consumer decision-making process of opting to shop through online shopping. Customers are much more informed about the product details, their reviews, and even the prices as compared to the past. This has led to the expectations of quality and service going high, which has made retailers shift their attention to customers.

Moreover, Instagram and Facebook applications are essential in shifting purchasing behavior. Social media and influencer marketing are now significant approaches to reaching the audience and making sales.

The Future of Online Shopping in Pakistan

The future of online shopping in Pakistan looks bright, with several trends poised to shape the sector:

• Expansion of Mobile Commerce: As smartphone adoption continues to rise, mobile commerce will dominate, with apps offering seamless shopping experiences.
• Adoption of AI and Personalization: Retailers will increasingly leverage AI to offer personalized recommendations, creating a tailored shopping experience for consumers.
• Integration of Augmented Reality (AR): AR technology will allow customers to visualize products, such as trying on clothes virtually or placing furniture in their homes, before making a purchase.
• Focus on Sustainability: Environmentally conscious consumers will drive demand for sustainable practices in e-commerce, such as eco-friendly packaging and reduced carbon footprints in delivery operations.
• Government Support and Policy Enhancements: Continued efforts to improve digital infrastructure and facilitate cross-border e-commerce will further accelerate growth.

These advancements will not only enhance the shopping experience but also enable small businesses to tap into the digital marketplace, contributing to economic growth.

Final Words

There is no doubt that the growth of online shopping has drastically changed the fashion retail industry in Pakistan. Even though conventional retailing has its problems, the advancement in the electronic business provides new prospects for those companies prepared to embrace change. However, through digital transformation, retailers are able to perform well within this environment to meet the needs of the consumer in terms of convenience, value addition, and innovation.

If you want to experience the best of online shopping then there is no better place than Shopping at DIVERSITY – It is one of the best e-commerce platforms in Pakistan.

The sector is steadily developing and is likely to merge the differences between online and offline shopping, thus providing a more convenient experience for the consumer. Retail in Pakistan is still in its infancy and the prospects of the future are quite bright for both retailers and consumers.