Businesses in Pakistan
When writing about the role of internet in the development of businesses, especially in the backdrop of a country like Pakistan where internet penetration is constrained with literacy rate, one could either weasel around with vague words and obscure statements that how good a thing internet is or simply hit the nail where it matters: use statistics, study growing FDI (Foreign Direct Investment) and its percentage in internet related businesses, quote observations from owners of various online firms and prove the point. I assert, the latter the better.
E-marketing, e-strategizing have become two indispensable unites of all small and big B2C businesses. From the outside, one might presume that it’s not a viable case in Pakistan to invest in an online business and expect to reach masses. But statistics show it’s actually quite the opposite; reality on the ground is far more encouraging.
To start with, for any commodity the more number of buyers, the bigger the market is. So for internet based businesses to thrive, internet user base has to be a large number.
Currently[1]:
- In January 2014, 17,486,177 users online (estimated)
- 2 million broadband subscribers in Pakistan
- Mobile device penetration is 19.78% vs. 80.24% desktop
- 29% of searches are coming from Mobile
- 15 million mobile internet users
- 30-50 million will be using mobile wallets soon
Consider for a moment that online freelancing platforms have led to the formation and development of software companies in Pakistan which are now challenging their Indian and Western counterparts. A friend of mine, an ex-Google employee, who recently founded his own software house in Karachi shared on anonymity criteria that he personally knows 40 small and big software related enterprises operating just in Karachi who grab projects from freelancing websites like oDesk, Freelancer, Freelance.com and others, delegate them to their teams and thrive that way. As per his experience, quite a lot of foreign employers trust Pakistanis and appreciate their work. These firms encompass, but aren’t limited to, website programming and designing, application-specific computer programming, English translation, theme based content development and one-off article writing.
Before going deeper into two of the brighter case studies related to how the internet has transformed the future of businesses in Pakistan, here are two generalized observations of the mentioned impact:
1) Increasing Market “Efficiency”
This simply means how the buying and selling of a good- any good- has become easy, quick and reliable. There are examples like Olx, PakWheels and FoodPanda but what actually made me tick was the story ofSahal Telescopes.
If till a year back you wanted to buy a telescope in Pakistan, you simply couldn’t because there is no authorized seller of telescopes in Pakistan. All you could do was to buy a second-hand one from someone who is willing to sell within the city or place an order online at a foreign website. Folks at Karachi Astronomers’ Society came together and invested in a venture that specializes in selling, building and mending amateur as well as professional telescopes within your metropolis.
Such a business might not beat out the likes of online giants like Olx, Tohfay.com, DealToday, FoodPandaand all (because they don’t even aim to do so) but they have certainly increased market efficiency by delivering what a consumer wants with a few clicks.
As HubSpot‘s co-founder famously once said “the internet is great at connecting makers of left-handed monkey wrenches with left-handed plumbers around the world.”
2) On internet, you are the king!
Source: Wikimedia Commons
A casual observer would say that internet has certain bias towards small businesses because, fortunately, “small” is a relative word.
Most people who land on a website through Google search don’t know, and sometimes don’t care, if you are a one-person company or a hundred-thousand person company. They are just there to meet one of their needs. So as long as small business owners form their websites with the most specific descriptions, their portal turns up in Google searches.
Brief Overview of a Case Study: Kaymu.com
Kaymu.com was founded in 2012. A venture of a larger group of companies called Rocket Internet.
In the 2nd quarter of 2014, Ahmed Khan, Managing Director Asian Region Kaymu.pk told Express Tribune in an interview that the website entertains “1,000 transactions daily with an average turnover of Rs1.2 million per day. According to Khan, around 40% of the total transactions are of the apparel and jewelry segments. Due to suspicion and other issues with using plastic for payments, more than 99% of transactions are cash-based.”[2]
Above stats may actually appear glorious when considering the fact that Kaymu.pk was actually launched in January 2013 in Pakistan. There were 600 retailers by April 2014 offering their products online. Company’s foreign employers now want the Kaymu.pk team to launch the same portal in 26 other countries of Europe and Asia.
We can argue about the future of such businesses in correlation with internet penetration and compare these with other online retail platforms in the region and elsewhere. But considering all the internet penetration Pakistan does have, online ventures are actually doing pretty good. Here’s an overview of how online retail businesses are doing and, geographically, from where are they making maximum money.
There are other localized ventures having a niche about things. As earlier mentioned one that particularly moved me is Sahal Telescopes; other is a simple Facebook page run by Ayesha Sajid by name ofShoppingale. She once shared that she loses “10% of daily visitors on the page every day because I couldn’t offer them the option to pay on delivery“[3]. Her statement does make a point about the trust level consumers tend to have in online shopping. Other businesses which opt for cash-on-delivery, like deal related websites DealToday.pk or online reward points sort of systems implemented by FoodPanda, Foortaland EatOye arguably reach out to a larger fraction of online users.
Case Study: Khussa Mart and Just Shawarma
- KHUSSA MART
Now I could have glorified further software based companies making big bucks through internet but thought of jumping off that bandwagon and taking a calm walk through one of Karachi’s busiest shopping hubs.Khussa Mart, a simple local sandal store that sells traditional hand-crafted sandals.
“I never knew anything like Facebook. Slowly my sale increased; people used to come with pictures of my designs which, it seems, got posted on Facebook. They started asking about specific designs.” Said Asif bhaiwhen I incidentally visited his shop with my wife. A few months later he had a Facebook page to his name where he posts about the upcoming designs. The man shared that his exposure to internet brought a surge in sales that was never in his wildest expectations.
“I now plan to air condition my shop, add glass doors, glass shelves so people can spend more time and recommend the shop to their friends more.” As evident from his Facebook page, he has successfully done the revamping.
- JUST SHAWARMA
A Shawarma vendor who operates from the parking lot of one of Karachi’s shopping marts saw increased sales since he went online.
“I always had a Facebook presence but once or twice I got mentioned in local papers that got us going. Our ‘likes’ on Facebook increased and so did the sales.”
“We launched a new product, Falafels, and used to tell customers individually, but people usually come with a preconceived appetite and order what they had decided. But soon after introducing it, we posted on our page to get that dish going and fortunately enough it went on a roll”.
My own first visit there was courtesy of multiple recommendations I had on my Facebook news feed. I also mentioned to the keeper that I am here because of your positive reviews on Facebook, he smiled and requested me to post about my experience too so more people can know about it.
These are obviously smaller examples with unrecorded and undisclosed data, but I would say if one wants to demonstrate the perks of having internet access, it’s most moving when done with examples of such small businesses. When asked, like the theme of this piece, what role internet has played for the development of businesses in Pakistan, it means physical increase in hard earned moolah through internet for those who don’t know a thing about the internet.