Electronic commerce or e-commerce is growing at a phenomenal speed all over the world. It facilitates people in buying goods and services and carrying out financial transactions online. Powered by Internet and the availability of options to pay electronically, it even overcomes limitations pertaining to one’s location, mobility and time as is the case in conventional businesses. It is this amazing phenomenon that has helped the likes of amazon.com and alibaba.com become global giants in online retail business and capture markets irrespective of the international boundaries.
However, in Pakistan it has been slow in picking up and there are certain reasons for this. For example, the rate of internet penetration has been too low until recently, there has been a lack of trust among people on transactions made online, the quality of products delivered has been not up to the mark quite often and in many cases the ordered products are delivered late or not at all. The Third Party Logistics (TPL) — courier companies in this case — have also had problems in delivering the products to the desired destinations. The extremely limited use of plastic money and digital wallets is yet another reason.
Apart from these, it is a fact that non-adoption of enabling technologies has been a major issue and many companies entering this arena without doing proper homework have failed to make their mark. The good news is that now the new entrants are benefitting from the solutions available in this sphere. The cloud computing applications offered by different players are something that have made it too easy for the new entrants to enter in the arena and focus on innovation. To put it simply, cloud computing is the hosting and delivery of information and on-demand computing resources on the Internet using a remote network of servers and not the on-premises infrastructure or personal computers.
TNS talked to different people to have an idea about the potential that exists in the country and the support that is available to those mulling to enter this market.
Umair Azam, Founder and Managing Partner at Integration Experts (iX), shares with TNS that today e-commerce companies are largely focused on cloud applications and looking at them as a preferred roadmap. At iX, he says, they act as a catalyst to create technology strategies synchronised with their client’s needs and deliver capabilities on the three most important pillars of digital economy in the modern age-mobility, cloud and big data.
He shares they are working as partners of Oracle — the leading cloud services provider — and have in this capacity introduced company’s applications on e-commerce and retail, supply chain, financial services, healthcare and transport and logistics to clients in Pakistan. By this he means the basic infrastructure and solutions are there and all the businesses have to do is to opt for what suits their specific needs and go live.
He cites the example of an online retailer which has emerged as a promising venture in Pakistan. He says this retailer has tried to meet the basic requirements first and then start its operations unlike several other online retailers that had little idea of the market and limited support from the product suppliers. Azam shares that in Pakistan’s online retail market order fulfillment is the biggest issue and many a times the products are displayed on the website but these are not present in the inventory of the suppliers. “So, what happens is that it may take indefinite time to fulfill the order or it is cancelled due to products’ unavailability.”
To avoid this from happening, what the said online retailer did was that from day one it deployed an Enterprise Resource Planning (ERP) system and got connected with its supplier through similar systems available with them. Through an integrated warehouse management system, the inventories of the suppliers are displayed on marketplace in real time. So, he says, in this case orders of only those products would be taken that really exist.
Umair says the issues about quality control have been taken care of under this system that allows the online retailers to bring products to their own warehouse for quality check before being dispatched to customers. “But this is done only for high end products like smart phones, laptops, televisions etc as it is not feasible to test low-cost products,” he adds. He says in this digital age analytics play a great role in development of business strategies and that is why Business Intelligence (BI) comes a bundle with Oracle’s cloud applications.
Waqas Hashmi, Country Director Cloud Platform Group, Oracle Corporation (Pakistan and Afghanistan), says the new businesses go for quick results and do not want to spend a lot of time in setting up systems and making investments so they opt for cloud. “In cloud environment, the velocity is quick and they get built-in out of box solutions meeting their specific needs, so they go live within no time. Here the systems are integrated and modules like those on customer management, inventory management, back office management, retail online sales etc are all easily available.”
On customer’s apprehensions about data theft during online transactions, Hashmi explains these transactions are normally safe as the data centers facilitating these have to meet global compliance standards. All Oracle data centers, he says, are fully compliant so any data theft through software and hardware is not possible at all. Besides, he says, the in-motion data that is beyond these servers is also secured and they have algorithms in place that ensure this. An algorithm is a process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer. He says, “Two factors of authentication namely password and email code are used to ensure that a transaction made online is totally secure.”
Besides, Hashmi says security also comes from the banking side where issuers like Visa and MasterCard also employ two factor authentication for data security. They have to comply with Payment Card Industry Data Security Standard (PCI DSS) which is an information security standard for organisations that handle branded credit cards from the major card schemes, he adds.
Hashmi is quite hopeful about the growth of e-commerce market in the country and one reason for this, he thinks, is that its potential has been lying unfulfilled for many years. “So, there is a lot of space to be filled.” He shares a good thing is that has taken up fast and a proof of it is that investors like Ali Baba are planning to make inroads into this market. He says Pakistani online retailers have achieved high turnovers based on their Black Friday sales over the last two years which shows the trend is picking up fast. Efforts are also being made to promote online transactions. For example, some local e-commerce websites have collaborated with certain local banks and offered discounts on their products for a limited period in case payments were made through their credit cards etc.
Mubashar Bashir, a chartered accountant and a banker, believes it is right time that this potential is exploited and the impediments removed. “It will be a pity if a market with well above 200 million population with half of it having access to mobile phones remains partially explored.”