CPEC amplifies E-commerce in Pakistan

Pakistan is experiencing a lot of changes right now, from the political landscape to social demographic changes. The one factor that is becoming more and more noteworthy with all these changes is the economic condition of the average Pakistani. It can be noticed that Pakistan is experiencing high inflation like other countries in the world because of domestic and international factors. During these trying economic times, Pakistan has witnessed a boom in the digital economy through e-commerce, which sprouted from the COVID-19 lockdowns. The pivot to geoeconomics at the national level concomitantly appreciates the current trend of e-commerce in Pakistan. It is prudent to navigate it in this article by linking it with China. Pakistan has been undergoing the mega-construction project CPEC since 2015. Geopolitics around the globe is changing rapidly, and geoeconomics is a critical part of the competition among great powers. Pakistan has a great opportunity to capitalise on the benefits of entering into an e-commerce venture with China.

Therefore, it is important to see Pakistan’s current e-commerce state of affairs. In 2022, the e-commerce market is expected to generate 6,807 million USD in revenue in Pakistan. Market volume is anticipated to reach 10,230 million USD by 2027, with revenue predicted to rise at an average yearly rate of 8.49 per cent (Global Green Wall Market 2022–2027). With 7.4 billion USD in revenue in 2021, Pakistan ranked 39th among all e-commerce markets, ahead of South Africa and behind Nigeria. The Pakistani e-commerce market grew by 84 per cent in 2021, contributing to a global growth rate of 18 per cent. These figures reflect a very promising future for e-commerce businesses in Pakistan. The geographical proximity with China indicates that e-commerce between the two countries is going to be the next step in bringing both countries to the next level of trade cooperation. By enhancing current and future coordination in the supply chain for e-commerce within Pakistan, the digital connection, together with and as a result of the CPEC, would positively contribute to the development of the overall economies of both countries.

The geographical proximity with China indicates that e-commerce between the two countries is going to be the next step in bringing both countries to the next level of trade cooperation.

In this direction, Pakistan and China have started taking different steps, like the Pakistan Pavilion on Jing Dong or JD.com, one of the most well-known and prominent e-commerce platforms in the Chinese online industry. It will aid in the introduction of Pakistani products to the Chinese market. Pakistan’s first national online pavilion on JD.com went live intending to give Chinese and Pakistani traders a beneficial platform to market Pakistan’s high-quality goods through China’s sizable online market. JD.com, a comprehensive 2C (consumer-to-consumer) online retailer with 700 million active users, is one of the largest online platforms for selling products. Since its inception in December 2021, it has increased its product categories from zero to 72, covering a variety of fundamental aspects of everyday use and consumption, such as casual snacks, grain and oil flavouring and tea brewing.

The trend of buying online Pakistani products among the Chinese is growing. In March 2021, there were 2.8 million total purchase orders for a biscuit product, placing them highly among comparable items in all national pavilions. However, there are some impediments as well. For instance, cultural differences, Chinese buyers’ ignorance of Pakistani goods, incompatibility between the production and packaging technologies of the products, and regional policies and regulations are the present barriers to the growth of the online Pakistani national pavilion. On the other hand, within Pakistan, the Chinese multinational e-commerce company Alibaba has undertaken several measures to capture Pakistan’s untapped e-commerce potential. The largest Pakistani e-commerce network, Enablers, has inked a global service partnership with Alibaba in order to establish an efficient e-commerce supply chain within Pakistan. Pakistan’s e-commerce business will benefit greatly from this.

Enablers will help Pakistani Alibaba sellers increase sales after the agreement. E-commerce platforms like Alibaba have helped live commerce in China succeed. Pakistani enterprises could list their storefronts on Alibaba to offer to B2B (business-to-business) buyers worldwide. Pakistan, the 5th most populated nation, has 64 per cent youth. These figures show that Pakistan has great potential for e-commerce entrepreneurs. The country has deep Internet penetration. It had 61 million Internet users in January 2021, up 11 million from the year before.

The e-commerce partnership between China and Pakistan is extensive, encompassing everything from infrastructure development to humanitarian projects that can be carried out online, as well as through livelihood industries, cultural exchanges, and financial cooperation. Both governments have realised the timely cooperation in the domain of e-commerce. Therefore, in November 2022, China and Pakistan signed a Memorandum of Understanding (MOU) on E-commerce Cooperation. This is the right step to reap the benefit of the CPEC that has entered into the second phase of development.

The needs of both countries’ economic development through practice are being met by the development of e-commerce. It not only encourages the expansion of industrial capacity but also satisfies consumer requirements, creates new demands, and eventually becomes a way of life. The cooperation between the two nations will equally benefit both countries.

Tauseef Javed

Tauseef Javed works at the Centre for Strategic and Contemporary Research (CSCR) as a Research Associate. He is currently enrolled as a doctoral student at Fujian Normal University in Fuzhou, China. His research focuses on international relations, history, and area studies from an interdisciplinary perspective.

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