Procter & Gamble experience
By Syed M. Aslam
Feb 12 - 18, 2001
Delayed adaptation of the Internet and the prohibitive costs involved
to have an access to it including unaffordable prices of PCs, hardware, software and the
internet connection itself are the major hindrances to the development of e-commerce in
Pakistan. In addition, poor service quality due primarily to the fact that the state-owned
Pakistan Telecommunication Company Limited's (PTCL) infrastructure is not geared towards
high quality Internet service and dearth of contents are also restricting development of
e-commerce in the country.
This was pointed out by Afaq Hussain Rizvi while sharing the corporate
experience of multinational Procter & Gamble Pakistan at the lecture organised by
e-Pakistan Initiatives, a non-profit organisation which sees IT as an elixir for
all economic woes. The chairman of the organisation, Khurram Rafiq, cited dearth of
quality human resources, an almost non-existing domestic market for the locally developed
software used globally and the unwillingness of the domestic software houses to use
e-commerce as a marketing tool as major obstacles for the development of an electronic
Pakistan. He also introduced Afaq as one of the pioneer of the early data base back in
early 1980s.
Afaq, an engineer and a senior IT specialist, is currently the IT
Manager at Procter & Gamble Pakistan. He has been associated with the P&G for over
a decade and has served at various international stations including his immediate past
assignment in Saudi Arabia.
While PG, being a consumer goods company, specialises in developing
brands — over 300 of its brands enable it maintain a heavy household presence
worldwide — Afaq said that his corporate experience show that in the IT world
of today focus is not on brand-related website but rather a people-related site: 'Our
website in Australian is aimed at young females.'
P&G, he said, is engaged in three types of business activities in
Pakistan — local manufacturing and packaging plant at Hub near Karachi, local
contract manufacturing and importing and marketing items produced at one of its plants
overseas. He claimed that P&G's Ariel detergent and Pampers diaper are leader in their
respective markets while it enjoys half of all the shampoo market in Pakistan
Talking about the benefits of the e-commerce, he narrated some
interesting facts. The IBM, he said, saved some $ 4.2 billion by redesigning the Internet
procurement processing by using e-commerce around web-based technology. In the
contemporary physical world of today, he added, 15 per cent of total payment transactions
are done through credit cards compared to the Internet realm where 99 per cent of the
financial payments are done through credit cards.
This also explains the reason for the massive credit card transactions
of $ 6 billion last year between the US and UK of which $ 585 million took place in
December 1999 alone, as per the figures given by Afaq.
In addition, e-commerce offers unmatched savings in terms of
transaction costs — it costs just about a cent to do a single transaction over the
www compared to an average of $ 1.13 through a bank, $ 0.54 over the telephone or $ 0.25
through the PC/software, he added.
Saying that the number of Internet users is projected to surpass 280
million by end this year, Afaq added that 56 per cent of the Internet users are non-US.
Putting the number of websites at 4 million around the world he expressed apprehensions at
an acutely low Internet penetration in Pakistan at just 0.4 per cent, a negligible low
compared to 30 per cent in the developed world.
He said that indicators show that e-commerce will enjoy exponential
growth in the coming years — it stood at $ 180 billion globally in 1999 and is
expected to surpass $ 1,300 billion by end 2002. Business-to-Business e-commerce is
projected to grow ten-times than the Business-to-Consumer, he added. The question is: Will
Pakistan benefit from it?
Observers say that the creation of a massive IT awareness alone
will not help the country to share even a small percentage of the massive global
e-commerce market the reasons of which are highlighted at the opening of this article. An
example given by Afaq can explain why not. Internet was introduced in Saudi Arabia in
January 1999. During the first year the number of registered internet users in the Kingdom
surpassed the target set for that initial year — from 50,000 to 200,000. In two years
since, by end last year, number of internet users in Saudi Arabia crossed 400,000 which is
more than the registered users in the much more populous Pakistan. Afaq attributed the
rapid growth in number of registered internet users in Saudi Arabia on one simple fact
— per capita income in Saudi Arabia is fifteen-times that in Pakistan. In addition,
while the local banking sector like their counterpart in the developed world has decided
to play a pioneering role in the development of the e-commerce much remains to be done to
expand the base of credit card use in the country — one of the major prerequisite. As
is 42 per cent of people in the developed world don't trust using credit card for an
e-commerce transaction due to concerns about confidentiality and misuse.
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