E-Commerce Starting to Take Off in Pakistan

[Riaz Haq]

Guest Post by Monis Rahman
Founder, Chairman and CEO of Rozee.pk

Pakistan is late to the party. E-commerce is booming throughout our immediate region. India's leading e-commerce website, Flipkart, recently raised a record $1 Billion in new investment, handling 5 Million shipments each month. The website sees so much potential in mobile shopping that it has a stated goal of becoming "the mobile e-commerce company of the future".

To our north, China's e-commerce leader, Alibaba, set a global record when it listed its shares on the New York Stock Exchange in September. Alibaba's Initial Public Offering raised a staggering $25 Billion, making its record-breaking IPO the biggest in the world. Today the Chinese e-commerce giant's market capitalization is over $250 Billion exceeding that of Wal-Mart, the world's largest old economy retailer. The market value of e-commerce companies in Pakistan's immediate vicinity including Turkey, the Middle East, India and China exceeds half of a trillion dollars.

But the party has indeed finally started in Pakistan as well. By 2017, the size of our e-commerce market is expected to reach over $600 Million from it's current size of $30 Million spent on online purchases annually. There are several factors driving this growth, which will dramatically change the way we buy things over the next several years.

Growth of Internet Penetration

Pakistan's Internet penetration rate historically exceeded that of India until 2009. In 2009, India launched 3G and its Internet penetration sky-rocketed. The same hockey stick growth took place in Sri Lanka's after its 3G launch in 2006. With Pakistan's long awaited entry into the 3G club a few months ago, there will be a similar burst of Internet accessibility which will further catapult online purchases.

Following the pattern of our neighbors, Pakistan's Internet enabled population will increase from 30 Million users today to 56 Million in 2019. Over the next five years, 28% of the country's citizens will have Internet access. This unprecedented reach will transform not just how consumers purchase goods, but will also significantly impact several other industries. My own online jobs classifieds site, ROZEE.PK, today processes 40,000 job applications a day and has helped over 1 Million people find jobs. Social media sites including Facebook and Twitter are transforming how we consume news and shape opinions.

Ubiquity of Access through Mobile

Along with the rise of Internet accessibility through 3G, Pakistan is simultaneously witnessing a surge in smartphone usage. There are an estimated 9 Million smartphone users in Pakistan, using handsets that are fully equipped with web browsers and online connectivity. Smartphones have become increasingly sophisticated, not only substituting many functions previously only capable through desktop and laptop computers, but also greatly increasing the ease of going online. Not only is the Internet becoming more accessible to consumers, consumers are also becoming more accessible to Internet merchants through the ubiquity of the smartphones in our pockets.

While the growth of smartphones in Pakistan is linked to the rise of Internet penetration, it is more so driven by the declining cost of increasingly sophisticated devices. Chinese companies which have traditionally manufactured devices for the world's leading mobile phone brands including Apple and Samsung, are now OEM'ing their own handsets for a fraction of the cost powered by Google's Android operating system. So significant is this trend that Samsung's third quarter profits fell by 50% as its mobile business continued to lose ground to low-cost Chinese smartphone makers.

The sub Rs. 5,000 price point of relatively powerful smartphones in Pakistan is enabling online accessibility to penetrate a lower untapped income strata of society. My cook now downloads recipes from the Internet on his smartphone.

India's Flipkart sees so much potential in mobile shopping that it has a stated goal of becoming "the mobile e-commerce company of the future".

Online Payment Initiatives Are Mushrooming

While over 95% of online purchases are fulfilled through Cash on Delivery (COD) in Pakistan, several promising initiatives are underway which will make it easier to pay directly online. Many banks and telcos alike have launched branchless banking and m-commerce initiatives ranging from MCB Banks's MCBLite, Telenor's Easy Paisa, Mobilink's Mobicash, Zong and Askari Bank's Timepay, UBL's Netbanking and others. The number of branchless banking agents which facilitate offline payments for online purchases tripled from 41,000 in 2012 to 125,000 in 2013, making it increasingly easier and more convenient to transfer money.

One of the most frequent complaints from Pakistan's online sellers of not being able to get merchant accounts that allow them to card payments online, has been abated. While Citibank Pakistan was once the only bank in the country to offer online merchant accounts, it was also notoriously difficult for businesses to get approved. When the bank wrapped up its consumer banking operations in 2012, it left its approximately paltry 14 approved merchants high and dry without an online card processing facility. However, UBL has since launched its Go Green Internet Merchant Account product for businesses which is far more reasonable in its on-boarding criteria. Online merchants can now potentially collect payments electronically from 12 Million debit cards in Pakistan.

Perhaps the most successful online payment solution currently available in the country is Inter Bank Fund Transfer (IBFT). A large volume of payments are made by consumers directly going to their bank's website to electronically transfer funds to online stores. Most banks are now offering their customers net banking IBFT payment facilities through their websites, bringing a majority of the country's banked population into the fold of electronic payments.

Maturing Logistics and Parcel Delivery Infrastructure

Currently 95% of online purchases are paid for through COD at the time the parcel is delivered to customer. TCS, BlueEX, Leopards and other couriers are providing COD delivery services across over 150 cities in the country. This becomes especially relevant when considering that approximately 35% of the the country's monthly 70,000 COD shipments are delivered to cities outside the three main urban centers of Karachi, Lahore and Islamabad. While urban shoppers are more online as a percentage of population, the value for rural shoppers is higher as many products are not available in their local markets. This implies a huge untapped segment of the population that will increasingly transition to online shopping.

Growing Trust in Online Storefronts

One of the main obstacles to the growth of e-commerce is the lack of consumer trust in purchasing from the "cloud". As a dotcom entrepreneur in Silicon Valley during the 1990's, I recall the prevailing conventional wisdom at the time: people would never give their credit card information on the Internet to buy items. Today, over 72% of Internet users in the US are digital shoppers. This contrasts sharply with less than 3% of Pakistani Internet users who have bought goods online. Although we have a long way to go, there is correspondingly huge upside potential as well.

After initial hesitation, an inflection point in consumer behavior was reached in the US during the late nineties with strong online storefront brands such as Amazon taking to mainstream media. The large amount of investment these sites were able to raise, coupled with highly professional teams, led to positive shopping experiences for the risk averse early adopters who ventured to buy online. We will see this same pattern in Pakistan.

For the first time in the country's history, we are seeing online brands deploying significant advertising budgets for mainstream media advertising. Deep pocketed general classifieds sites like OLX, funded by the South African mega media group Naspers, and Asani, a Schibsted funded company from Norway, have embarked in our online industry's first media war with ads competing for our eyeballs. Rocket Internet, which runs Daraz and Kaymu in Pakistan, recently completed an $8.2 Billion IPO in October of this year. Daraz and Kaymu are well funded and will be pouring capital into the Pakistani e-commerce market in a magnitude not seen here before. Several other Pakistani online players will be launching their TV ads in the coming months, giving new credibility to the online medium and e-commerce.

All of these developments will lead to a rapid increase in trust as first time online shoppers experience e-commerce and generate acceptance through word-of-mouth.

Pakistani E-Commerce Companies

Big foreign investors are a swooping in to become first movers in key verticals in the world's sixth most populous country with the goal of claiming online thrones. Visionary local players like Home shopping, Shophive and Symbios are organically emerging from our ecosystem and bootstrapping to success. This is a winner-takes-all market: the largest marketplaces grow the fastest making it unviable for new entrants as the industry heats up. And this industry has a voracious appetite for capital. The e-commerce party has started.

The Author is Chairman and CEO of Naseeb Networks and is one of Pakistan's most prolific Internet entrepreneurs. He runs leading online job classifieds sites ROZEE.PK in Pakistan and Mihnati.com in Saudi Arabia. 

This post reflects the author's assessment of the e-commerce scene he sees in Pakistan. The owner of this blog does not necessarily agree with the contents of this guest post. 

Here's a couple of video clip on e-commerce company leaders in Pakistan:

https://www.youtube.com/watch?v=ehNY5GuY8Vw

http://www.dailymotion.com/video/x1aoyc7_daraz-pk-co-founder-farees...

Daraz pk Co-Founder Farees Shah on eCommerce in... by f555680658

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[Riaz Haq]

#ecommerce in #India: #Cow dung patties are selling like hot cakes online in India for #Hindu rituals and fuel http://www.cbsnews.com/news/why-cow-dung-patties-are-selling-like-h... …

 

Like consumers around the globe, Indians are flocking to the online marketplace in droves these days. But there's one unusual item flying off the virtual shelves: Online retailers say cow dung patties are selling like hot cakes.

 

The patties -- cow poop mixed with hay and dried in the sun, made mainly by women in rural areas and used to fuel fires -- have long been available in India's villages. But online retailers including Amazon and eBay are now reaching out to the country's ever-increasing urban population, feeding into the desire of older city folks to harken back to their childhood in the village.

 

Some retailers say they're offering discounts for large orders. Some customers are asking for gift wrapping.

 

"Cow dung cakes have been listed by multiple sellers on our platform since October and we have received several customer orders" since then, said Madhavi Kochar, an Amazon India spokeswoman.

 

The orders come mostly from cities where it would be difficult to buy dung cakes, she said.

 

In India, where Hindus have long worshipped cows as sacred, cow dung cakes have been used for centuries for fires, whether for heating, cooking or Hindu rituals. Across rural India, piles of drying cow dung are ubiquitous.

 

Radhika Agarwal of ShopClues, a major online retailer in India, said demand for the cow dung cakes spiked during the recent Diwali festival season, a time when Hindus conduct prayer ceremonies at their homes, factories and offices. On a recent day, ShopClues' website showed that the patties had sold out.

 

"Around Diwali, when people do a lot of pujas in their homes and workplaces, there is a lot of demand for cow dung cakes," said Agarwal, referring to rituals performed during the popular festival.

 

"Increasingly, in the cold weather, people are keeping themselves warm by lighting fires" at outdoor events, she said, adding that people who grew up in rural areas find the peaty smell of dung fires pleasant.

 

"It reminds them of the old days," she said.

 

Online retailers said people were also buying the dung cakes to light fires for ritual ceremonies to mark the beginning of the new year and for the winter festival known as Lohri, celebrated in northern India.

 

The cakes are sold in packages that contain two to eight pieces weighing 200 grams (7 ounces) each. Prices range from 100 to 400 rupees ($1.50 to $6) per package.

 

Dung cakes are also used as organic manure, and some sellers are marketing them for use in kitchen gardens.

[Riaz Haq]

#Ecommerce a big success in #Pakistan- Artisans cinnecting with customers. #3G #4G #Smartphones 

http://www.khaleejtimes.com/business/technology/e-commerce-a-big-su...


In the Hindu Kush mountains, craftswomen painstakingly stitch flowing scarves. They are skilled artisans who were unable to sell their products beyond the remote region until mobile Internet came to Pakistan and dropped the market into the palms of millions of previously marginalised people.

The women of northern Chitral are among the unlikely profiteers of an e-commerce boom since 3G and 4G Internet arrived in the deeply conservative Muslim country in 2014, suddenly able to market and sell traditional products without leaving their villages or in some cases even their homes.

"The online platform eliminates the middleman," says Nasrin Samad, the entrepreneur behind the artisan brand Kai, which works with women across the region. Now, Chitrali women "have access to a global audience," she says.

Kai products are sold on polly & other stories (pollyandotherstories.com), which launched late in 2015 to connect traditional artisans like those in Chitral with consumers hungry for "authentic" products.

"Years of working with local community and craft groups had shown us how difficult it was for local small businesses, even the most talented, to access mainstream markets or connect with buyers, both within Pakistan and abroad," founder Amneh Shaikh Farooqui told AFP.

To bridge the gap, says co-founder Ange Braid, the pair built a website to give "small, creative businesses, many of them led by women or young students, the chance to market and sell".

Opportunities like this in a country like Pakistan are "huge", says Adam Dawood, head of online marketplace Kaymu.pk.

In the first quarter of 2015, smartphone shipments to the country soared by 123 per cent, according to the Pakistan Telecommunication Authority's annual report.

Broadband subscribers have topped 26 million people, the Ministry for Information Technology said in February, with broadband penetration going from three per cent to more than 15 per cent.

The ministry cited World Bank studies showing that a 10 per cent increase in high-speed Internet connections can boost gross domestic product (GDP) by 1.38 per cent, adding the arrival of broadband in Pakistan is set to have a "very positive impact on economic growth".

Dawood echoed the report's optimism. "There are tremendous opportunities for everyone to start selling and buying instantly and earn money," he said.

Women are seeing the benefits, but e-commerce presents potentially an even greater opportunity for young people in a country where roughly two thirds of the population - of around 200 million - are estimated to be under the age of 30.

A recent economic survey by the finance ministry singled out the challenges facing youth in Pakistan, including "limited job search expertise, a mismatch between education, aspirations and employers' requirements and a lack of mobility, among other factors".

Seventeen-year-old Daniyal Admaney says he was able to defy scepticism over his youth to launch his T-shirt design business on Kaymu, however. "I... thought that I should do something productive during summer vacations when I have nothing to do except getting bored and sleeping," he says.

Kaymu, a venture of German company Rocket Internet, which builds online start-ups, has helped launch several other e-commerce companies unique to Pakistan such as consumer goods site Daraz.pk. 

[Riaz Haq]

http://gulfnews.com/gn-focus/country-guides/reports/pakistan/pakist...


The 2014 Pakistan Startup Report insisted it was the right time to build startups and invest in entrepreneurs. Even some of the estimated 12,500 Pakistanis in Silicon Valley were returning home to float their own ventures. The report concluded, “Pakistan will grow, the only uncertainty is the speed at which it does.”
Well, one sector where rapid growth has become a certainty is e-commerce.

Yusuf Hussain, Director of the Islamabad Founder Institute, believes multiple factors are converging to create the right condition for e-commerce in Pakistan — the tech-savvy middle class now numbers around 100 million; investments in the tech sector grew an impressive 800 per cent YoY in 2015, spurred by improved security environment and an expanding tech ecosystem; and buying online is becoming easier with the emergence of mobile payment platforms like Easypaisa, Innov8, and Finja.
“Funding is critical for investment-hungry e-commerce,” Hussain tells GN Focus. “Also, there is greater focus on product and service quality and reliability, with growing competition and the emergence of ratings sites like JustPrice.pk.”
Of mobile payment platforms, he says, “With growing maturity, they are poised to make inroads into the cash on delivery models and expand the pie.”

Jamil Goheer, Co-founder of Virtual Force, which provides technology platforms to startups, attributes the impressive rise of e-commerce to massive infrastructure development, GDP growth, strategic geolocation, the China-Pakistan Economic Corridor and technology upgrades. “Businesses are reaching out to their consumers over various digital platforms and advocating for economic activity over the Internet due to lower costs,” he says.
He says a survey they conducted recently reveals apparel and fashion are the booming sectors, with almost all major brands selling their products online. The electronics, food, beauty, footwear and furniture categories are also picking up steam online.
Game changer
Moeez Javed, founder of online fashion store Virgin Teez, says e-commerce has progressed at an “astonishing speed” and has been “profoundly impacted” by the rise of social networks in Pakistan. He estimates more than 1,000 brands are going online every month, and the pace is only picking up. “Some 73.2 per cent of the entire population now has access to mobile phones, and smartphone users recently surged to 9 million. These internet-enabled smartphones have dramatically increased the ease of internet access and made online businesses much more accessible for all.”
The introduction of 3G/4G services in 2014 was a game-changer, says Arzish Azam, founder and CEO of Just Price, taking Internet penetration from 10.9 in 2013 to 13.8 in 2014. He estimates Pakistan currently has more than 2,000 online stores.
Dr Umar Saif, Founder of Plan9, Pakistan’s largest technology incubator, agrees, highlighting the importance of younger users in urban areas.
Research by the shopping portal Kaymu.pk shows that people aged 25-34 account for the highest number of e-commerce user 

[Riaz Haq]

#HongKong #fintech firm to move #research & #development work to #Pakistan

https://tribune.com.pk/story/1384831/hong-kong-firm-move-rd-departm...

LAHORE: Octo3, a Hong Kong-based financial technology company, has announced to move its entire Research and Development (R&D) wing to Pakistan.

The company, which specialises in development and provision of modern payment and other transactional solutions, further announced that it will invest in the Pakistani market in order to transform its ICT landscape.

The announcements were made based on the robust developments in Pakistan’s Information Technology sector and a rising need of digital payment solutions due to the growing e-commerce segment in the country.
“We have decided to shift our entire R&D department and other core function to Pakistan from Hong Kong as the country offers a lot of talent in the IT sector,” said Group’s Chief Executive Officer Tyrone Lynch.

“Few years ago, we outsourced our R&D wing to India, but after working a while we realised that things didn’t work as per our expectation, and we once again moved back to Hong Kong.

“After analysing the Pakistani market and the rapid developments and upcoming scope of ICT and digital payment solutions, on the back of China-Pakistan Economic Corridor (CPEC), we decided to shift our R&D wing to Pakistan,” Lynch added.

The company, which started its operations in 2009, has its presence in Hong Kong, Singapore, Bangkok and now Pakistan with its clientele expanding in almost entire modern economies.

Since its founding chairman is a Pakistani, it aims to add a lot of value in CPEC-related and other projects by building database centres and other such ICT infrastructure both with government as well as with private and multinational companies.

The management is already in talks with local banks and financial institutions for provision of backend support to locally available payment solutions, which can be accepted globally as well.

“We are a solution provider company but in Pakistan we will work both on ICT as well as digital payment solutions,” said Ajmal Samuel, ,hairman and Co-founder Octo3 Group Holdings Limited while talking with The Express Tribune.

“I have access to foreign players who are willing to invest in emerging economies, however, due to the negative perception of the country they hesitate to visit,” he added.

Talking about payment solutions, Samuel said that existing players offering different wallets have already paved their way and have established the market and “the next step for us is how we can transfer this existing customer base and wallets to e-commerce payment solutions, which can simultaneously be accepted in global markets”.

“The e-commerce growth is so huge in Pakistan that some global players like Amazon have asked us whether our company can provide any digital payment solutions from Pakistan,” he claimed. 

[Riaz Haq]

Growth of #ecommerce in #Pakistan with rising #Internet penetration: Over 65m #3G #4G #LTE subscriptions by 2020
https://tribune.com.pk/story/1394016/bricks-bytes-impressive-growth...

Every minute, 26 Pakistanis access the internet for the first time. By 2020, more than 65 million of them will be using 3G and 4G/LTE on their phones. There will also be 163 million mobile subscribers by then – roughly 89 per cent of the population of Pakistan. Add to this mix the fact that around 60 per cent of our population is below 30 and the rising trend of start-up businesses in Pakistan – and it’s clear that Pakistan has a bright future online.

E-commerce in Pakistan has had a slow start and is still finding its legs but pushed by 3G and 4G/LTE, it is set to cross $1 billion by 2020. This may seem quite low, given that the country’s overall retail market is worth $152 billion but Pakistan’s e-commerce is not faltering. Take the example of Black Friday 2016; it was a massive success for almost every participating e-retailer in Pakistan. Adam Dawood, head of Yayvo.com, agrees with the assessment. “There have been massive strides in e-commerce in the last two years, especially in the online retail market sector. Yayvo has exceeded its revenues of the previous year in the first five months of this financial year,” he says.

Pakistan’s explosive online growth has not gone unnoticed. This year on the sidelines of the World Economic Forum in Davos, Alibaba Group chairperson Jack Ma met with Prime Minister Nawaz Sharif to express his interest in investing in Pakistan’s e-commerce sector. Barely two months later, a delegation from Alibaba landed in Islamabad and held meetings with Finance Minister Ishaq Dar and other officials. Just last week, a delegation headed by Alibaba President and Director Michael Evans met with PM Sharif.

Farees Shah, the general manager of video-on-demand service iflix, says there are very few countries in the world which have as impressive figures of internet growth as Pakistan does. “Pakistan is one of the fastest growing markets in the world and the 3G and 4G technologies are playing a significant role in that. Right now, depending on who you ask, there are roughly about 37 million mobile broadband users in Pakistan. We are adding a million 3G and 4G users every month for the last 3 years,” he shares.

[Riaz Haq]

Foodpanda generates additional Rs1bn for Pakistan's food delivery market

https://www.dawn.com/news/1281787

Foodpanda, Pakistan’s leading food delivery app, estimates that it has generated a staggering one billion rupees in additional sales for the restaurant industry in the last 12 months.

Along with growing adaptation of online service offerings in Pakistan, Foodpanda has accelerated the switch from offline food ordering to online ordering through its website and mobile app, benefiting both its customers and restaurant partners.

Nauman Sikandar, CEO of foodpanda Pakistan notes:

"Over the last three years we have helped customers to realise that they can spend their valuable time pursuing what they love, rather than preparing food at home. We have partnered with thousands of professional chefs at restaurants who prepare the most delicious meals of your choice for you, along with the convenience of having it delivered right to your doorstep."

He further adds:

“I am a foodie at heart and order from my favorite restaurants almost every day.I used to make tons of telephone calls each month to restaurants and the overall process was extremely painful! Finding the correct telephone number, reading out my order from a leaflet, communicating my address, and then the frustrating moment when I realise that they misunderstood my order through the phone."

"With Foodpanda, you simply log on to our app, select or discover your favourite restaurant and place your order with a few clicks. The app remembers all your details, so you only enter them the first time. Now I can place an order at my favorite restaurant within 30 seconds."

Foodpanda estimates over 7500+ restaurants established all across Pakistan, which it aims to add to its portfolio over the next few years.

Last year, the company grew its restaurant inventory to over 1,000 restaurants which is a 360 per cent increase compared to the previous 12 months.
Next to the local neighbourhood favourites, Foodpanda signed partnerships with national restaurant chains, such as Nando’s, McDonald’s, Sarpino’s and Ginsoy.

Over the last few years, Foodpanda has accelerated the growth of the food delivery market to around 20pc year on year, compared to original growth levels of around 7pc.

Raza Pirbhai, CEO of KFC remarks, "Foodpanda as a concept has taken Pakistanis into the future, not only from the customer point of view but also from the business end. With delivery being the fastest growing channel, KFC Pakistan has seen a rapid growth pattern in its online sales which is doubling over time."

"Together with foodpanda we plan to take KFC to every household in Pakistan over the next few months."

The figures in the following infographic represent Pakistan’s enriched and rapidly growing food ordering market and shows that foodpanda is the pioneer leading explosive growth and improvements in the industry.

[Riaz Haq]

#China's #ecommerce #tech giant #Alibaba Group set to enter #Pakistan Market; signs first MoU

https://www.dawn.com/news/1333495

Pakistan on Tuesday signed a Memorandum of Understanding with Alibaba Group Holdings Limited to promote Pakistan's worldwide exports by Small and Medium Enterprises (SMEs) through e-commerce.

Alibaba Group's Executive Chairman, Jack Ma and Prime Minister Nawaz Sharif witnessed the signing ceremony.

Speaking at the headquarters of the e-commerce giant, the prime minister appreciated the success and performance of the Alibaba group.

"I am glad my meeting with Jack Ma at the World Economic Forum in January has come to fruition in the shape of the MoU we have just signed," the premier said.

"My appreciation of Ma's dynamism and performance of [the Alibaba] group comes not only from its success as a e-commerce giant but more so from the focus of the group on job creation and livelihood generation," he added.

"Indeed, the Alibaba group is a business with strong humanistic dimension. These are the values that are the pivot of the policies my government has pursued with determination and commitment since taking office in 2013."

"E-commerce is a powerful tool to stimulate economic activity, effort, innovation and entrepreneurship across all sectors of the economy," the prime minister added.

"When Jack Ma shared with me his interest in establishing an e-platform in Pakistan, i instructed my office to facilitate Alibaba's initiative in every manner and in the shortest possilbe time frame," he the prime minister said, adding that the MoU had been signed within four months of when the initiative was first conceived.

The agreement between Alibaba and Trade Development Authority of Pakistan (TDAP) was signed by Commerce Minister Khurram Dastgir and Michael Evans, President of Alibaba Group, and Douglas Feagin, Senior Vice President of Global Business of Ant Financial, on behalf of Alibaba, during the visit of Prime Minister Muhammad Nawaz Sharif to the headquarters of the company.

Explore: PM Sharif, Alibaba president discuss e-commerce giant's prospects in Pakistan

Under the terms of the MoU, Alibaba, Ant Financial, and TDAP agreed to foster growth of worldwide exports of products by small and medium sized enterprises (SMEs) in Pakistan through e-commerce.

Online and offline training programs for the SMEs would also be conducted by Alibaba in a bid to assist SMEs with on-boarding on to Alibaba's platforms and optimizing exports through e-commerce.

TDAP will help identify suitable SMEs to participate in the training programs while Alibaba will be responsible for providing industry analysis to TDAP to assist them in their selection process.

In addition, Alibaba, Ant Financial and TDAP have agreed to promote the growth of financial services in Pakistan in areas such as mobile and online payment services.

The parties have also agreed to adopt cloud computing services to support the online and mobile e-commerce businesses of SMEs in Pakistan.

The Alibaba group has in recent years been aggressively courting foreign brands to set up Tmall stores to sell to China's vast and growing middle class by offering to smoothen out Chinese sales, payment and shipping processes.

[Riaz Haq]

Alibaba inks deal with Pakistan to promote exports

http://www.thehindu.com/news/international/alibaba-inks-deal-with-p...

Pakistan today signed a deal with Chinese tech giant Alibaba to promote the export of products by small and medium enterprises through its e-commerce platform globally.

Online and offline training programmes for the Small and Medium Enterprises (SMEs) would also be conducted by Alibaba in a bid to assist them with the company’s platforms.

A Memorandum of Understanding (MoU) between Alibaba and Trade Development Authority of Pakistan (TDAP) was signed by Commerce Minister Khurram Dastgir and President of Alibaba Group Michael Evans and Douglas Feagin, Senior Vice President of Global Business of Ant Financial.

The development occurred during Prime Minister Nawaz Sharif’s visit to the company’s headquarters in China, where Mr. Sharif with Alibaba Group’s Executive Chairman Jack Ma witnessed the signing ceremony, the Associated Press of Pakistan reported.

Alibaba, Ant Financial and TDAP agreed to foster growth of worldwide export of products by SMEs in Pakistan through e-commerce.

TDAP will help identify suitable SMEs to participate in the training programmes while Alibaba will be responsible for providing industry analysis to TDAP to assist them in their selection process.

In addition, Alibaba, Ant Financial and TDAP have also agreed to promote the growth of financial services in Pakistan in areas such as mobile and online payment services.

The parties have agreed to adopt cloud computing services to support the online and mobile e-commerce businesses of SMEs in the country.

http://www.thehindu.com/news/international/alibaba-inks-deal-with-p...

[Riaz Haq]

#Alibaba's online payment service #Alipay to launch in #Pakistan very soon, Anusha Rehman. #PayPal http://bit.ly/2rlxPBi via @techjuicepk

Minister of Information and Technology Anusha Rehman has today announced that Alipay will be working in Pakistan very soon. She was speaking at the National Competition of Final Year Projects at Islamabad. The event was organized by National ICT R&D Fund.

While speaking with the winners and participants of the event at the closing ceremony, Anusha Rehman reiterated the mission of Pakistan’s Government to connect the unconnected population of Pakistan with Internet and technology. She mentioned that Prime Minister of Pakistan has recently signed a MoU with Alibaba, the ecommerce giant of China. She added that Alipay, another venture of Alibaba, for online payments will soon be available in Pakistan.

For the uninitiated, Alipay is a third-party online payment solution. The platform has the biggest share in China’s market and most of the online payments in China are processed by Alipay.

Alipay is a venture of AliBaba Group which means that the recent collaboration between Government and AliBaba will finally pave the way for an online payment platform in Pakistan.

An online payment solution will mean huge growth and transactions influx in the ecommerce industry of Pakistan. Previously, Anusha Rehman has been quoted as saying that the government is working hard to bring Paypal and Amazon to the country but nothing could materialize on that end.

With the ever growing friendship between Pakistan and China, it seems that if not Paypal, Alipay will be available in the country very soon.

[Riaz Haq]

#Pakistan to launch state-of-the-art E-payment gateway. #PayPal #AliPay #ecommerce

https://tribune.com.pk/story/1420372/pakistan-launch-state-art-e-pa...

Finance Minister Ishaq Dar announced on Friday that Pakistan would open international electronic payment gateways ahead of the likely arrival of PayPal and Alipay in the country.

While presenting the budget for 2017-18 in the National Assembly, the finance minister said the State Bank of Pakistan (SBP) was developing a state-of-the-art e-gateway at a cost of Rs200 million.

“The system will facilitate transactions through mobile banking,” he said. “The Rs200-million investment is being undertaken by the SBP.”

Even though PayPal is a world-renowned international e-payment system, Alipay is not as common across the globe. However, recently, Prime Minister Nawaz Sharif developed an understanding with Alibaba Group Founder and Executive Chairman Jack Ma, who also owns Alipay, to open its office in Pakistan. Alipay will enable Chinese and Pakistani traders to make easy e-payments between the two countries.

Meanwhile, information and communications technology expert Parvez Iftikhar said the establishment of the e-gateway system at the highest regulatory level – the SBP – was an effort towards replacing the existing manual trade payment system by opening Letters of Credit.


Digital Pakistan

The finance minister said the telecommunication sector was one of the important pillars of the country’s economic development. Hence, in order to further incentivise the sector, customs duties at the rates of 11% and 16% were being withdrawn and a uniform rate of 9% regulatory duty was being levied on telecom equipment in the coming fiscal year.

Additionally, Dar said start-up software houses would be exempted from income tax for the first three years. Similarly, exports of information technology (IT) services from Islamabad and other federal territories will be exempted from sales tax.

Mobile phone industry – another important element in the IT sector – received a further relief as withholding income tax on mobile calls was reduced from 14% to 12.5% and federal excise duty was reduced from 18.5% to 17%.

“We hope that provincial governments will also reduce the rate of sales tax on mobile industry,” he said. “In order to encourage the use of smartphones, the customs duty will be reduced from Rs1,000 to Rs650.”

Iftikhar commended the incentives and tax relief for the IT sector, which were meant to enable industrial players to invest more in the sector. “Digitalising Pakistan is the way forward. This is how we will cope with the developed countries,” he said.

Nevertheless, he added more could have been done to achieve a faster growth in the sector. “Reduction of withholding tax on phone calls and duty on smartphones is an encouraging development. However, calls and phones should have been made tax-free in the larger interest of digitalising the economy.”

Branchless banking

Dar announced exemption from withholding tax on cash withdrawals by branchless banking agents.

The move has been undertaken to realise the government’s dream of providing 50% adult population of Pakistan access to banks under its Financial Inclusion Strategy 2020. At present, 25% adult population has access to formal banking channels.

E-commerce and IT need to watch out for the budget

Iftikhar said the exemption from withholding tax on cash withdrawals under branchless banking would enable the government to document the economy, which would be one of the great efforts towards minimising the size of undocumented economy.

“Progress in almost every sector of the economy – like banking, agriculture, education, health and governance – is now linked with adoption of telecommunication,” he said.

Meanwhile, Jazz Director Communications Anjum Rahman said the government was supporting the agenda of ‘Digital Pakistan’, which was in line with the company’s vision and aspirations.