Fancy a trip to the Mall? No thanks
No apologies for a follow-on from last week’s column about the changing ways of life in my home village. Apart from clean water and a plummeting infant mortality rate I saw something first hand that I had hitherto only heard of second or third hand – courier deliveries by motorbike. Three that I noticed in the course of a single day’s stay.
A typical day, I heard. So…21 a week. And 1,092 a year if the average is maintained. Extrapolate that across thousands of similar villages in south Punjab and you are looking at a sizeable slice of retail activity. It may be – probably is – that these are low-value items being delivered, costing 1000 rupees or less, but their value is in a sense immaterial it is the volume of trade that is interesting, and who is doing the buying.
The nearest shopping mall of any size that has a range of brands beyond the local is in Rahimyarkhan about two hours to the south by road, or Bahawalpur about the same distance in the other direction. The fare for a round trip would be more than 1000 rupees. The fare to the nearest town, Feroza, which is a dusty rundown strip that straggles for a kilometre either side of the road – is 20 rupees. You do the math.
And how much is a phone package? As little as 100 rupees. And is there a single household in the village that does not have at least one smart phone? Probably not. And are the owners of these cheap or secondhand smart phones the shiny new millennials of the stereotype? Certainly not. So they can read and write, right? Well some can, yes, and if they can’t they know somebody that can. Are there courier company offices in Feroza? Two. So given the chance and a small sum of disposable income that can be spent on something other than what is available in the village shop might people just cut out the middle person and go shopping on the phone? Indeed they do.
And if they are doing it in villages then they are doing it in towns and cities. But don’t they need a debit or credit card? Nope. Cash at the gate. So no bank involved? Nope. The vendor will have a record of the transaction and so will the delivery agent, but there is nothing by way of a unified national record of just how many of these small and very small purchases are being made which makes me wonder at the accuracy of official figures for online retail activity.
Now get your Googling finger working. Just take a look at how many online retailers there are in Pakistan. The first online retail store, the birth of e-commerce, opened in 2005 and is still going. They will sell you the latest HD smart TV for Rs207,999 or a can of premium motorcycle engine oil for Rs450. And just about everything else in between. Including condoms. There may be a dozen or more online malls with vast product ranges, attractive, beguiling websites that look like they cost a rupee or two to put together and updates and special deals galore. Somewhere at the back of all this are warehouses that hold the goods being sold, and essential linkages to the distribution companies that are enjoying something of a golden age. And jobs. How many? Who knows.
All of this is there for you whether you live in the back of beyond or an inner city, though some of the more remote parts of the country are not covered by courier delivery. They will be. Eventually.
So lets crunch the numbers that are available. A report by the State Bank of Pakistan last October said that e-commerce doubled in the fiscal year 2017-18. The SBP data only covers transactions made by debit or credit card and interbank funds transfer etc. Market estimates put the share of postpaid cash-on-delivery transactions at about – and here the numbers make the eyes pop – 80-90 percent of the total volume, and the total value of e-commerce in FT18 may have reached Rs99.3 billion. And most of that was COD but there are no verifiable figures, just some informed speculation.
There are about 152 million cellular subscribers or about 73 percent of a total population of around 207 million. The total internet subscribers are about 62 million and rising. There are challenges – slow internet speeds, building customer trust, glitchy supply chains and unreliable or slow delivery.
Despite this the e-commerce sector is growing like Topsy. There are three malls in advanced stages of construction within five minutes of my front door. None of them is likely to offer much beyond a covered version of the open bazaars they are replacing, and certainly not the diversity of shopping I can experience without moving out of my armchair. Online groceries and fresh foods? Watch this space. And down there in my home village? Well we are doing very nicely thank you. A trip to the mall? No thanks. Tootle-pip!