In Pakistan many of the businessmen suffer from this illusion that induction of technology can boost their business, they are partly right and partly wrong. The point to remember is that technology is only a tool and not an end. Businessmen have to revisit their business model and deploy the technology that enables their customers to review products/services along with prices, place an order, make payment and receive delivery of the order at the designated place.
In this business model, the most strategic role is played by the website of the incumbent. For example, if a commercial bank wants to facilitate its account holders to undertake any and every transaction without visiting brick and mortar branch. The first step in this direction was the installation of ATMs and the issue of debt card enabling account holders to withdraw cash whenever and wherever. The limited number of ‘own’ ATM became the biggest stumbling block. As a result two networks emerged and soon they realized that the merger of the two networks is more prudent. To take of care of the cost of transaction undertaken on an ATM not owned by the bank of account holder, he/she has to pay a apparently a minuscule amount of Rs15.00. Keeping in view the convenience, the account holders never bother to think why he/she should pay this price?
Once the back office infrastructure was developed by the convergence of technology and telecommunication, banks also started offering internet-based banking, whereby an account holder, using his desktop computer can transfer funds, pay credit card and utility bills and even school fees of his/her children. Many of the users suffer from this illusion that banks are too kind to offer all these services. It may be said that banks have been more than smart because: 1) account holders prefer to keep their money in banks and preferably use credit cards at petrol pumps, grocery stores and fast food outlets and restaurants and 2) traffic to the branches has reduced substantially. One can still recall long queues of people outside the branches for making payment of utility bills. Online payment of utility bills has saved the banks from handling huge amounts of cash and escorting security guards.
The young generation may not be familiar with the word ‘money order’, a norm of the yesteryears. Transfer of money through this service offered by Pakistan Post Offices used to take days. Now people can transfer/receive money instantly through the online banking service offered by the banks and/or using their own computers and mobile phones. In the past, people travelling to other cities or going for purchases had to carry huge amounts, which was a serious security threat. Now they use ‘plastic money’ and online banking facility for transfer of funds. With the use of ‘smart phones’ getting popular one even does not need a desktop/laptop for making online payments.
‘Financial exclusion’ has always been a serious bottleneck for the Government of Pakistan because over 90 percent of the population does not have a bank account. As the use of mobile phone grew, State Bank of Pakistan with the help of financial institutions and telecommunication succeeded in offering ‘electronic valet’ for receiving/sending money, just like ‘easy load’. Till yesterday low literacy was said to be an impediment, but now a person having the lowest literacy is sending/receiving messages on cell phones. Now, almost all the cellular companies offer this facility. They (cellular companies) are successfully using this business model because of franchises located in nock and corner of the country. The introduction of biometric system has helped in creating stronger ‘firewalls’ that offer the confidence to the users that their money is safe and secure.
As the computers and cellular technologies entered Pakistan, it was apprehended that millions of people would become jobless, on the contrary jobs have increased for people having the new skills. It may not be wrong to say that despite the low literacy rate in Pakistan, population of technology savvy people is on the constant rise. According to a report total number of broadband connections increased to 32.7 million, from 3.7 million during 2014-16, an increase by 450 percent. This report has estimated Pakistan’s population at 196 million in 2016. An expert says that Pakistan’s current population now exceeds 200 million and the number of users must have surpassed 40 million. This shows the enormous potential which is yet to be exploited.
According to another report Pakistan enjoys impressive connectivity, a fast growing economy and growing middle class. Despite the presence of foreign and domestic players, e-commerce penetration in Pakistan remains low. Some experts say that the prime reason for low penetration is lack of confidence in the prevailing payment system as well delivery of goods of agreed quality. This demands holding of ‘online shopping festivals’ by different stakeholders of this unique type of market.
Some experts say that people above 50 years of age are highly skeptical of the emerging business model of buying and selling. However, the country enjoys an advantage that more than half of the population of comprises of people falling in the 18-30 years age bracket.
While one may not like to refer to Indian example, the similarity in income groups, buying habits and literacy level demands having a look at whatever is being done there. Reportedly the Grand Diwali Mela in India attracted over 5.5 million visitors (please don’t forget that Indian population is 10 times the size of Pakistani population). Nearly half of these visitors were female. The eye opener was the fact that visitors spent 125,000 hours browsing through various brands.