POTENTIAL OF E-COMMERCE IN PAKISTAN

Sooner or later, we have to adopt E-commerce, as we can not remain isolated from the World Market

By KAMAL YOUSUF
GM, KalPoint.com
July 07 - 13, 2003

E-commerce in Pakistan is not a properly understood term, neither its meaning nor its potentials. The definition of e-commerce does not only mean sale or purchase of goods on the net but also flow of information and funds. If any of these events occur online, then you have achieved e-commerce, and your business in true sense is an e-business.

SOME FACTS ABOUT E-COMMERCE

It is here to stay.
The total global turnover through e-commerce in the year 2003 is estimated to rise a whopping $3 trillion.
Business world and certain governments are swiftly adopting e-commerce to prepare themselves for Free Global Trade era in a very short period of time.

WHY ADOPT E-COMMERCE?

Generally we hear about e-commerce from people we meet anywhere and almost everyday, read in the newspapers and magazines and watch talks on television about e-commerce as it has assumed such importance. Therefore, people and governments are discussing the benefits and to devise ways and means to adopt it in conferences, seminars or use it in innovative systems. Tremendous benefits of e-commerce are time-saving, efficiency and the speed with which it can reach people anywhere in the world at any time by a simple click of the button and that too at infinite cost.    

Without a doubt, progressive businesses and governments are rapidly adopting the e-Factor with the same objective of achieving time and labor efficiency by working faster, very economically and may boast proudly by saying that "My business worth is six hundred million seconds more than of a company called Aerobics Incorporated".

EQUAL OPPORTUNITIES/BENEFITS OFFERED BY E-COMMERCE

The Web levels the playing field. Large and small business enterprise irrespective of their sizes will have equal opportunities to succeed and can take pride in their achievements.

E-commerce eliminates the middle-men from business operation. Therefore cost saving may multiply the volume of business. Dell computer which is selling computers directly to consumers in the absence of middle-men and intermediaries through the Internet. It does not have a physical sales outlet and sells its computers online. Due to substantial economy in its operations it has become a formidable competitor of IBM, HP and other conglomerates in a very short time. Dell achieved a sales volume of about $32 billion worth of computers through its e-shop during last year.

Through e-commerce, products to the customers can be delivered faster which is indeed a great convenience to customers, therefore you achieve perfect Customer service. Thus the Companies achieve price and technological edge over competitors.

It improves performance of the business enterprise and improves resources and eliminates unnecessary paperwork.

It is a paperless environment to work on companies' web sites. Thus, leading to a Paperless Society and this will be one of the greatest achievements of IT Revolution by the year 2025. 

Information can be updated easily. Thus the printing of brochures and pamphlets time and again can be eliminated and substantial cost saving can be achieved.

In order to withstand the competition, web advertising can be changed immediately according to the heed of the time at a very nominal cost.

WHY PAKISTAN SHOULD ADOPT E-COMMERCE?

Due to lack of IT culture in Pakistan, people of the business community in Pakistan have not shown enough interest in adopting e-commerce. Even the Government has not developed a policy framework and rules regarding e-commerce. Last of all, research facilities have not been created for this purpose that is why it has not been a household name in Pakistan. This is a great setback which needs most immediate attention of the business community as well as the Government.

Therefore we should adopt e-commerce without any further delay to position ourselves to be a part of the globalization of the world market and to avail opportunities as well as to grasp benefits of E-commerce, as mentioned above. 

CLASSIFICATION OF E-COMMERCE:

E-commerce can be classified into three types according to the parties involved.

* Business to Business e-commerce B2B e-commerce
* Business to Customer e-commerce B2C e-commerce
* Customer to Customer e-commerce C2C e-commerce
* Business to Business e-commerce B2B e-commerce

B2B type is a major part of the overall e-commerce. It represents automated electronic transactions, which could take place between two businesses. For example it may take the form of transactions that take place electronically between manufacturing companies and their suppliers or between wholesalers and retailers etc.

In Pakistan we can follow the Japanese B2B business model of manufacturing known as JIT (Just In Time) where manufacturers do not invest large sums of money in keeping raw materials. In this mode of business the computer systems of manufacturer and its suppliers are interlinked and are programmed in such a way that the computer system of the manufacturer automatically orders the specific quantity to the suppliers' system as the level drops to minimum and the supplier efficiently delivers the material on the assembly line.

BUSINESS TO CUSTOMER E-COMMERCE B2C E-COMMERCE

This is the area where the Pakistani businessmen have the best chance to capitalize; provided their products are able to compete globally in terms of quality and price. Here again, a business cannot achieve quality product at a lower cost without implementing e-commerce internally and becoming an e-business. And this is the area, which poses the greatest challenge to Pakistani businesses as well because there will be a free global trade in not to distant future and when it begins, the most common medium of trade will be Internet.

B2C E-COMMERCE HAS FOUR ROUTES/CATEGORIES

(a)        Goods are bought and delivered within the country
(b)        Goods are bought from within the country and are delivered abroad
(c)        Goods are bought from overseas and delivered within the country
(d)        Goods are bought from overseas and also delivered abroad

In these four routes, the greatest potential lies in the categories of c and d.

These routes provide the brightest potential for Pakistan especially; as there are over 3,000,000 (Three Million) Pakistanis living in different parts of the world who want to express their sentiments to their loved ones at home in the form of flowers, gifts, expensive electronics and other valuable items and derive satisfaction thereby Internet commerce would also bring precious foreign exchange to Pakistan.

Kalia Group has taken a bold initiative by opening a site called mallpk.com where shopkeepers can open their own virtual e-shops and sell goods online. It is just like a big super-market but its existence is only virtual.

CUSTOMER TO CUSTOMER E-COMMERCE C2C E-COMMERCE

In this classification, a customer will go to another customer direct to satisfy his needs. For example, online auctions like ebay.com.

Also a Pakistani portal Kalpoint.com (KPDC) is doing a tremendous humanitarian service free of cost by getting the employment opportunities to applicants in their homes and vice versa. KalPoint.com is also providing yet another social service on matchpk.com for the prospective brides and bridegrooms to get in touch with each other and decide for themselves the suitability of the match. Thus, KPDC is just providing a common platform to million of users/consumers, without any charge (Free of Cost). 

BLOCKING THE GROWTH OF E-COMMERCE IN PAKISTAN

What impedes the growth of e-commerce in Pakistan is the lack of any e-commerce law, particularly no comprehensive laws governing the cyber security and digital signatures coupled with lack of awareness of the businessmen.

An official of Small and Medium Enterprise Authority (SMEDA) has recently compiled a book' "Secrets of e-Commerce" in collaboration with International Trade Centre (ITC).

CONCLUSION

In essence, potentials of e-commerce are infinite and most economical in terms of business. Its application in true sense can bring long-term benefits which was never possible few decades ago.

E-commerce and E-governance in Pakistan are not far-fetched ideas but will become necessities in order to survive as a nation.

Sooner or later, we have to adopt E-commerce, as we can not remain isolated from the World Market. So, earlier we do that the better, otherwise we will be out of business. 

IT Literacy is not a choice anymore but a necessity for an individual and our nation. Careers in IT are wide-ranging and offer good career options nationally as well as internationally.