Islamabad: Pakistan's e-commerce industry is poised for substantial growth, with revenue expected to rise from $5.2 billion in 2023 to $6.7 billion by 2029, according to a new report. Despite this, the sector grapples with challenges that could hinder its development if not addressed.

According to a statement by International Trade Administration, Pakistan's e-commerce landscape, while expanding, remains at an early stage compared to regional markets. The country needs to tackle systemic issues and develop a regulatory framework that supports fair competition and innovation.

E-commerce has opened up business opportunities across Pakistan, allowing individuals, especially in remote areas, to start ventures with minimal capital. This development has been significant for local artisans and small manufacturers, providing them with access to broader markets and increasing their income. Women and students are also benefiting, contributing to household incomes and earning supplemental income.

The report suggests that the e-commerce sector could exceed $6 billion by 2029 if the government implements protective policies to ensure a fair business environment. The growth of e-commerce has also spurred related industries, such as manufacturing and logistics, leading to job creation.

However, the entry of international e-commerce players poses a threat to local businesses. Companies like Temu, using strategies such as predatory pricing, challenge local sellers who have invested in infrastructure. Issues with return policies and logistics also affect consumer trust, essential for e-commerce growth.

Pakistan's e-commerce policy, last updated in 2019, aimed to address taxation and logistics issues. Yet, the rapid evolution of the sector, particularly post-Covid-19, requires an updated policy to address regulatory gaps and protect consumers and the economy.

The report underscores the need for a level playing field to protect local businesses and consumers. It suggests learning from regional initiatives, like Malaysia's and Indonesia's campaigns to support micro, small, and medium enterprises (MSMEs), and India's collaboration with Amazon to boost local industries.

A comprehensive approach is necessary for Pakistan to maximize its e-commerce potential. This includes revising policies to tackle anti-competitive practices and creating incentives for local sellers. Enhancing digital payment infrastructure and addressing consumer security concerns are also crucial for increasing online purchase rates, currently at 18 percent.

Supporting local sellers through government-backed programs and ensuring fair competition are vital for sustaining innovation and consumer choice. The report cites actions taken by Indonesia and Vietnam against Temu and Shein to protect local merchants as examples of regulatory measures.

For e-commerce to become a significant part of Pakistan's economy, fostering a supportive ecosystem, prioritizing local businesses, investing in digital infrastructure, and balancing consumer benefits with economic sustainability are essential steps.