Pakistan's fashion exports can tap global consumers through e-Commerce trade of US$ 837 bn.

The Pakistan Business Council (PBC) recently published a report titled 'Using E-Commerce to Promote Exports of Pakistani Fashion Products' in which it estimated that the global revenues of e-commerce retail trade in fashion products is valued at US$ 837.3 billion.

Pakistan's overall B2C e-commerce trade in 2022 is estimated to be US$7.7 billion domestically with US$ 1.4 billion in fashion products. Meanwhile, cross-border B2C e-commerce trade from Pakistan in 2022 is reported to be US$ 368.3 million, the majority of which is fashion products. This is comparison to a global estimate of US$221 billion in cross-border e-B2C e-commerce trade in the fashion segment which is forecasted to grow at 6.2% annually over the next 3 years. Therefore, Pakistan's current share is approximated to be under 0.15% with room to grow exponentially.

Retail brands such as Limelight, Gul Ahmed, Khaadi, Sana Safinaz and Al Karam Studio are reported to be exporting tens of millions of US dollars in women's clothing, primarily to overseas Pakistanis. Dozens of other fashion brands are also observed to be serving customers in U.S.A., the U.K., the U.A.E., Canada, Australia, Europe and Gulf countries, with upto 30% of their revenues being generated from these international markets.

The comprehensive report goes on to highlight key recommendations for stakeholders such as merchants, E-commerce companies, logistics providers, the financial sector, and the government, as follows:

1. Training and Awareness Sessions for Fashion Designers and Merchants

2. Facilitate International Logistics in Pakistan

3. Creation of Third-Party Service Providers in Pakistan to Handle Specific E-commerce Tasks

4. Banking, and Customs Procedures Need to be Digitalized

5. Revision of SBP and Customs Laws

6. Pakistan’s Image needs to be Improved

7. Promotion of Pakistani Fashion through Collaborations with International Designers

8. Issuance of Certification or Badges to Genuine Websites of Fashion Brands

9. Improvements in Pakistani Payment Gateways

10. Facilitating Digital Marketing Services Providers in Pakistan

11. Development of Ancillary Products, Fusion Wear and Western Wear Brands

12. Industry needs to implement Standardization

13. Focus Towards a More Diversified Client Base

The report can be downloaded from the PBC website here.

Online card payments show 28% growth compared to last year

Compared to October-December 2021, the value of e-commerce transactions by credit and debit cards showed an improvement by 28% for the same period of 2022. However, the number of transactions decreased by almost 40%, in comparison. The details were published in the State Bank of Pakistan's Quarterly Payments Systems Review for the Quarter ended December 2022.

In comparison to the previous quarter (July to September 2022), the e-commerce transactions by credit and debit cards showed a decline of 8.4% (5.2 million transactions), but the value of the transactions improved by 2.2% to Rs. 34.2 billion over the last 3 months. The quarter-to-quarter transactions value showed growth primarily due to e-commerce payments made through foreign cards almost doubling from Rs. 5.1 billion in Q2FY2021 to Rs. 10.1 billion in the latest reported period. Meanwhile, e-commerce payments using domestic cards stood at Rs. 24.1 billion, a 11.6% increase from the same period last year. Online merchants accepting online card payments through local banks (or fintechs) grew by 50% to 5,954 merchants compared to 3,968 last year.

It is important to mention that the e-commerce transactions reported by SBP only include card payments whereas many e-commerce digital transactions are conducted through mobile banking, online banking and via digital wallets. The e-commerce related transactions are not yet disaggregated from payments via these channels in the central bank's reports.

Although online consumer and merchant behavior is gradually shifting towards digital payments, various industry sources estimated that 80-90% of e-commerce transactions still take place through cash, primarily cash-on-delivery through logistics service providers.

TRAX: Fresh funding breathes new life into e-Commerce logistics contender

The e-commerce logistics space has recently seen some players bow out but TRAX, backed by Genesis Holdings, has bounced back after concerning rumblings of late, with a reported US$3.7 million investment via renowned foreign investors.

US-based Amaana Capital co-led the investment with UAE-based Tricap Investments. PNO Ventures and a few angel investors were also involved, according to a press release by the logistics player.

In the recent past, TRAX was rumoured to be in financial trouble as a result of rapid growth, spike in fuel costs and cut-throat pricing by various players.

However, a renewed focus by the owners and management team seem to be steering the ship out of stormy waters and validation from overseas investors in this challenging time indicates a promising future.