Significant Growth in Digital Payments in Pakistan: Insights from the Daraz Index
Daraz, a leading e-commerce platform in Pakistan, has launched the country’s first e-commerce index, providing valuable insights into consumer behavior and tracking the growth of the e-commerce industry. The index was unveiled through an online event hosted by Daraz, which was attended by Federal IT Secretary Shoaib Siddiqui.
Despite being a cash-dependent economy, Pakistan has seen significant growth in digital payments. The Daraz index aims to establish benchmarks for online consumer behavior and help industry stakeholders understand online buyers. To generate this knowledge, Daraz relied on its internal data for 2019, as well as Nielsen data, which claims that 85% of private e-commerce customers contributed to its purchase.
Understanding Online Consumer Behavior
The index analyzes the behavioral patterns of a growing segment of Pakistanis who shop online, outlining factors that encourage or discourage customers from switching to online channels. This information is crucial for businesses looking to tap into the e-commerce market in Pakistan. The index also highlights the e-commerce potential of Tier 2 cities, such as Sialkot, Gujranwala, Hyderabad, and Multan, demonstrating the widespread use of e-commerce in Pakistan.
One of the key findings of the index is that digital payment methods shifted in 2019. At Daraz, digital payments accounted for 32% of total consumer spending, while e-wallet usage grew by 8.2% year-over-year. This growth in digital payments is a significant indicator of the increasing adoption of e-commerce in Pakistan.
Impact of COVID-19 on E-commerce in Pakistan
The index also highlights changes in consumer demand in the second and third weeks of March 2020, following the outbreak of the coronavirus in Pakistan. Notably, the percentage of FMCG product sales at Daraz doubled during this period and is expected to increase to 70% of the platform’s total revenue in the coming weeks.
“In this uncertain period, we saw a change in customer behavior, where the demand for key products grew rapidly – a strong indication that e-commerce can currently serve as a solution. It is our responsibility to ensure continuous access to these goods to facilitate social distance, help our country, and serve our customers,” said Dr. Ehsan Saya, Managing Director of Daraz Pakistan.
Frequently Asked Questions (FAQs)
- What is the Daraz index? The Daraz index is Pakistan’s first e-commerce index, providing insights into consumer behavior and tracking the growth of the country’s e-commerce industry.
- What are the key findings of the index? The index highlights the growth of digital payments, with digital payments accounting for 32% of total consumer spending at Daraz, and e-wallet usage growing by 8.2% year-over-year.
- How has COVID-19 impacted e-commerce in Pakistan? The index shows that the outbreak of the coronavirus in Pakistan led to a significant increase in demand for FMCG products, with sales doubling in the second and third weeks of March 2020.
Overall, the Daraz index provides valuable insights into the growth of e-commerce in Pakistan, highlighting the increasing adoption of digital payments and the potential of Tier 2 cities. As the e-commerce industry continues to evolve, it is essential for businesses to understand online consumer behavior and adapt to the changing market trends.
