getPakistan.com, Inc. was
incorporated in the State of Texas on March 15, 2000. Company's current
offering, to the immigrant Pakistani community in USA, include prepaid
calling cards, gifts to Pakistan, money transfer and airline tickets.
getPakistan.com, Inc. has a CAGR of over 200% in revenue since the
launch of the company. It is the largest e-commerce company in its
space. getPakistan.com, Inc. intends to enter the Pakistan market by the
end of 2004. Company's main focus will be to provide services through
its Internet distribution capability. Company's web site at http://www.getPakistan.com
has over 65000 unique visitors, over 103,000 page views and over 500,000
hits per month. Company's 2003 revenue was to the tune of Rs. 28.13
What do you think are the reasons for the initiation of e-commerce in
There is not one reason for this lack of e-commerce development in
Pakistan. First and foremost the government regulations were instituted
in late 2002 almost 8 years after e-commerce was initiated in other
countries. Then there is low penetration of credit and debit cards.
Currently there are 500,000 credit and debit cards which is 0.35% of the
population as compared to around 65 million in US. Then the cost of
Internet access has been higher as compared to other countries in the
region. Besides these factors the attitude of people towards Internet
has been that of suspicion and mistrust. People do not feel comfortable
giving their credit and other personal information on the web. All these
factors combined have hindered the initiation of e-commerce in Pakistan.
is the value proposition offered by an e-retailer?
ABDUL KUNDI: At
the start of e-commerce price was considered as the biggest advantage.
An e-retailor had over their brick and mortar competitors. E-retailors
were supposed to share the saving achieved through lower overheads with
their customers in terms of better prices. These e-retailers also had a
tax advantage. E-retailers were given sales tax exemption until end of
2003. But as the market grew larger and it was realized that besides
lower price there are other distinct advantages offered by these e-retailor,
for instance time saving, convenience, wide variety of products to
choose from. E-retailors also refined their business models, improved
their logistics, invested money in a better customer experience and
secured their web sites against hacking. These developments attracted
more customers and internet became another distribution channel for
retailers. According to a recent survey people spend USD 375 billion
dollars in online shopping in USA.
are the most successful business models in e-commerce?
ABDUL KUNDI: Over
the years as people understood the medium better some industries has
adopted Internet as a distribution medium over others. For instance
travel has become the largest sector in terms of revenue. Almost all US
airlines and cruise companies have adopted Internet to distribute their
services. The second largest category is selling books. Auction of new
and used products has also grown substantially. Content and subscription
services are growing fast like YahooPersonal, match.com, wallstreet
online edition etc.
products and services are suitable for Pakistan market in e-commerce?
ABDUL KUNDI: I
think instead of reinventing the wheel we should try to copy the
business models successful in the developed countries. I think travel
reservation is one area that has potential, online food ordering is
another, purchase of movie tickets could also be done, then there is the
market for Internet, cell phone and prepaid calling cards.
Tangible goods will still be difficult to sell over
Internet in Pakistan. The cost of logistic and customer attitude is the
biggest impediment in selling tangible goods.
after the introduction of Internet merchant accounts there has not been
much acitivity in e-commerce?
ABDUL KUNDI: Even
in the developed markets Internet merchants pay a higher fee per
transaction. But the costs in Pakistan are 100% more in Pakistan. A
typical Internet merchant in USA pays 2.5% in transaction cost plus a
small per transaction fee.
Whereas these fees are in the range of 4.5% to 5%.
Plus funds are retained for about 15 days. This withholding period
increases the cost of capital and reduces turnover. Also a merchant is
required to prove the validity of a transactions if a customer claims
the card has been mis-used. It is difficult for a small merchant to
install systems that provides sufficient to defend the charge backs.
Typically a company reserves 7 to 8% for charge backs but in Pakistan it
has to be in the range 15 to 20% which also raises the cost of
transaction for the merchant. All these transactions added together
requires a higher threshold for a sale price which then result in
exclusion of many products to be sold on Internet. This is evident from
the fact that an average transaction size on Internet is Rs. 1000 in
you think the current regulatory environment in terms of electronic
signature and cyber crime is sufficient?
ABDUL KUNDI: I
am not fully familiar about the regulations in Pakistan. What I have
read in the newspapers and discussions with people it seems like a good
is your opinion on b-2-b e-commerce in Pakistan?
ABDUL KUNDI: I
think b-2-b has a higher potential for success in Pakistan than consumer
market in the current environment. For instance exporters and shipping
companies can improve efficiency in logistics, banks and auto dealers
can also use it for fast approval of loans for car finance, banks can
also institute trade documents like LCs through Internet. The volumes
and efficiency can justify the investment required to implement these
are your plans for Pakistan?
ABDUL KUNDI: In
its essence we are a distribution company. We use Internet as a
distribution medium for proprietary and third party consumer services.
Our focus for Pakistan is to provide services that help our customers
manage their life style effectively in a high paced environment. Most of
these will be proprietary services. Our first service for Pakistan
market is schedule for launch by end of July or early August.