Shops’ Sales Drop as E-Commerce Thrives

November 30, 2024 Mahi Bukhari

Traditional Businesses Face Plummeting Sales, While Online Shopping Surges with Aggressive Discounts

KARACHI:
Small traders and shopkeepers in Karachi are grappling with a significant downturn in sales, witnessing a staggering 70% decline compared to the previous year. This decline is largely attributed to the prevailing economic instability exacerbated by political turmoil. In stark contrast, the e-commerce sector is experiencing a remarkable surge in sales, driven by aggressive sales campaigns such as Blessed Friday, 11.11 sales, and other promotional events offering substantial discounts for limited periods.

Decline in Traditional Retail Sales

Economic Instability and Its Impact

Expressing deep concerns over the plummeting sales, All Karachi Tajir Ittehad Chairman Atiq Mir highlighted the dire situation faced by traditional retailers. He cited various contributing factors, including runaway food inflation, exorbitant energy tariffs, declining incomes, increasing taxes, and overall political and economic instability. Mir lamented that a significant number of traders and shopkeepers, approximately 80%, are now struggling to cover basic operational costs such as electricity bills, workers’ wages, and shop rents.

Government’s Role and Response

Mir also criticized the government’s approach, accusing it of celebrating an artificial rise in the Pakistan Stock Exchange (PSX) while borrowing excessively and presenting misleading economic indicators. He emphasized that the real economic situation continues to deteriorate, particularly in Karachi, the financial hub of Pakistan. Mir appealed to policymakers and the Pakistan Army to intervene, calling for immediate measures to address the economic crisis.

Rise of E-Commerce

Growth of Online Shopping

In contrast to the struggles of traditional retailers, e-commerce is witnessing steady growth. Aggressive sales campaigns and significant discounts have made online shopping increasingly attractive to consumers. Alliance of Arambagh Markets Association Chairman Asif Gulfam remarked on the growing momentum of e-commerce, noting that even amidst some scams, consumers are turning to online shopping for its convenience and competitive pricing.

E-Commerce Infrastructure

Gulfam highlighted that over 350 online shops in Saddar alone operate with their own delivery riders, ensuring efficient home delivery of products. This infrastructure has played a crucial role in the success of e-commerce in Pakistan, particularly in urban areas where consumers are increasingly seeking convenience.

The Competitive Edge of E-Commerce

Festive Shopping Season

E-commerce platforms in Pakistan have adopted promotional strategies similar to those in the West, where the festive shopping season begins on the last Friday of November. Retailers compete fiercely on price, timing, and transportation savings, offering last-minute deals to attract consumers.

Daraz’s Influence

According to a spokesperson from Daraz, the introduction of the 11.11 shopping festival in Pakistan in 2018 has revolutionized the e-commerce landscape. Originally known as Singles’ Day in China, this event has become the largest shopping festival in Pakistan, offering discounts of up to 80% on over 10 million products. This year, a significant portion of orders came from non-metro areas, demonstrating the reach and inclusivity of e-commerce.

E-Commerce Breaking Barriers

Access for Smaller Cities and Rural Areas

The spokesperson from Daraz emphasized that e-commerce is breaking barriers by providing consumers in smaller cities and rural regions access to a wide range of products that were previously out of reach. This increased accessibility is particularly beneficial during times of economic hardship, as consumers can maximize their savings through online shopping.

Mission to Make Shopping Inclusive

Daraz’s mission to make shopping more accessible, rewarding, and inclusive for all Pakistanis is evident in their continued efforts to expand their reach and offer competitive prices. The success of the 11.11 sale and other promotional events highlights the growing importance of e-commerce in Pakistan’s retail landscape.

Conclusion

The contrasting fortunes of traditional retailers and e-commerce platforms underscore the significant shifts taking place in Pakistan’s retail sector. While small traders and shopkeepers continue to struggle with economic instability, e-commerce is thriving, driven by aggressive discounts and innovative sales campaigns. As consumers increasingly turn to online shopping for its convenience and cost-effectiveness, the future of retail in Pakistan appears to be leaning heavily towards e-commerce.

FAQs

1. Why are traditional shopkeepers in Karachi experiencing a decline in sales?

Traditional shopkeepers in Karachi are facing a decline in sales due to several factors, including economic instability, high inflation, exorbitant energy tariffs, and overall political and economic turmoil.

2. What are some of the key sales campaigns driving e-commerce growth in Pakistan?

Key sales campaigns driving e-commerce growth in Pakistan include Blessed Friday, 11.11 sales, and other promotional events that offer substantial discounts for limited periods.

3. How has Daraz influenced the e-commerce landscape in Pakistan?

Daraz has significantly influenced the e-commerce landscape in Pakistan by introducing the 11.11 shopping festival, which offers discounts of up to 80% on over 10 million products and attracts a large number of consumers, including those from non-metro areas.

4. What are the benefits of e-commerce for consumers in smaller cities and rural areas?

E-commerce provides consumers in smaller cities and rural areas access to a wide range of products that were previously out of reach, allowing them to maximize their savings and enjoy the convenience of online shopping.

5. How are traditional retailers coping with the economic challenges they face?

Traditional retailers are struggling to cope with economic challenges, with many unable to cover basic operational costs. They are appealing to policymakers for measures to address the economic crisis and provide relief.