Ecommerce industry in Pakistan has a huge potential, it is not saturated as yet, and the industry itself is in growing stage where a lot of gap in products and services still exists. As commerce works in supply and demand patterns, ecommerce is not much different than conventional commerce where supply and demand plays an important role for growth. Regardless of growing demand for products and services online in Pakistan, demand is still quite low if we compare it to other countries like UAE, UK or even India. In my previous article I have elevated some barriers to the growth of ecommerce industry in Pakistan, one of them was “Consumer Behavior” in this article I will be evaluating this barrier in detail, how this could be changed in Pakistani market becomes vital for future growth of the industry.
People in Pakistan who are inclined towards buying products and services online are the majorly belongs to the urban areas, they have the following traits in common;
- Belongs to urban or sub-urban areas of Pakistan
- Have appropriate knowledge of internet and technology
- Have an adequate monthly income
- Use online payment systems such as Debit/credit cards
- Have friends and family who make purchases online
How many people could account for the segment with traits mentioned above? Obviously there are very few in ratio over the population. When we say population we are not mentioning rural areas, we are purely talking about urban population with more or less similar traits mentioned above. In comparison, Daily mail UK reported that almost 95% of UK population buy goods or services from the internet retailers.
In Pakistan, if we just ponder urban population the percentage would be less than 10. These figures are alarming for ecommerce growth, People must have prejudice of being cheated online or they have heard some reviews from others which makes them reluctant to make online purchases. This prejudice can be removed by creating chain reaction. For instance, if ecommerce industry can set the target of acquiring more users and develop a strategy to achieve those targets, people’s mind could be changed. It might take some time to happen but it is the promising for future growth.
The Chain Reaction
Consumers who often buy products or services are the igniters to amalgamate the chain reaction. Retailers must create offers for user registrations and allow heavy discounts, giveaways or monetary benefits to users for bringing more users for registration. This is really important, you may not be able to acquire a customer through advertisement but word-of-mouth builds trust in the new comers. For instance, a person who never bought a product or service online have some reservations to go online and click buy now button but when his/her friend will convince him/her to get registered and make a purchase, with all the previous experience to verify and guarantee the satisfaction, it is much easier for the new comer to get registered and start making purchases online. Ecommerce industry is lacking in demand and this can be filled up by creating chain reaction which has a multiplier effect in users and eventually in demand for products and services.
Starting from the famous movie “Godfather’s” dialogue “I will make him an offer; He can’t refuse” is the real deal in an online environment. Users who watch advertisements online or offline should be engaged to maximum possible level. The products and services which online retailers offer to consumers should be astonishingly appealing to them so that the user could not insist on not to buy. As the industry is in growing stage Ecommerce retailers should not always focus on making money from sales, their prime target should be making money from users. In business, logically it is better to acquire 1 returning customer than making 10 one time sales.
Offers & discounts
Offers and discounts plays a vital role in making products and services more and more appealing. Offers like; get 50% discount on your next purchase or buy one get one free, do shopping for Rs. 10,000 and get free smartphone or get 5% commission from every purchase of your syndicates, retailers can also introduce points system for every single purchase which at the end can be used to buy more products. These are the offers which will eventually induce new users to start shopping online. Retailers can offer a lot more than that, but the idea remains the same, get more engagement rather than more sales, get more users rather than more profit.
There are also some barriers along the way of changing consumer’s behavior, consumer satisfaction and customer service should be the top priority for online retailers in order to remove those barrier which could curb the future growth.
Easy, Fast and Secure Transactions
Not everyone uses credit/debit card online nor online banking and transfers, this is one of the biggest barriers in user growth. There should be an online payment system which can be accepted by almost every online retailer. Fewer developments have seen in the past like Jazzcash by mobilink and EasyPay by Telenor. Retailers have started accepting payments through these systems which makes it easier for users to make payments directly to online merchants. Users feel secure when making payment through these systems.
Building trust is two-way traffic, retailers should build trust in customers and customers should build trust in retailers. Retailers must not misguide customers when selling online. For instance, product images, descriptions, prices and other details should accurately reflect the original product that would be delivered. If customers receive the product which does not closely represent the details published online he/she may not return for the next purchase even if the money has been refunded and the product has been returned.
On the other hand, customers should also be honest and easy going; they should not force retailers for unnecessary refunds, returns or exchanges. Honesty is the crux which will build trust in both communities.
But retailers have more obligation in this scenario, they should do every possible thing to make customer happy and build trust, even if they incur some lose in doing so.
Refund, Returns and Exchange Policies
Retailers should clearly define and communicate their Refund, Returns and Exchange policies; I would strongly recommend that retailers should always make customer friendly policies. The user would happily try to purchase from them if they know their money would not be wasted and they always have a room for settlement. This encourages users to make online purchases and eventually helps a lot in changing their behavior.