We all have heard about the benefits of doing e-commerce business in Pakistan from social media personalities and how they are portraying about earning millions in a single month. There is a popular saying which goes by the words as “all that glitters isn’t gold” . Well , yes same applies to the ecommerce scenario in Pakistan. There are always pros and cons in any business model and ecommerce business isn’t an exception to it.
Why The Hype?
The first ecommerce business was started way back in 1982 by Boston Computers , which was primarily an online market that served people who wanted to sell their used computers. So this business model isn’t new, in fact the hype that is created among the Pakistanis recently about it is something that is worth asking why is that?
well , the hype became to increase on the ecommerce topic started way back in 2018 , when a group of ecommerce startups were seen to be running successfully online. This led to the emergence of people notably Saqib Azhar who founded Enablers , Sunny Ali who founded Extreme Commerce and many others. These institutions and notable personalities used their influence to run their successful training program of teaching the youth on how to do ecommerce business. The fabricated stories of successes were seen to be published every single day to create the hype that the youth is missing out on a “a big new industry” which is in fact an old industry with a lot of risks. All these led to the ecommerce hype we see today.
Is It Worth To Try?
Ecommerce business is definitely not for everyone as not only it demands extensive investments but also demands huge initial workload to make it successful online.
Lets Break it down into stats.
Pakistan total users on social media is estimated to be 31.7% of its total population.
which means , an ecommerce owner can only target this percentage of population only.
Lets assume , someone initially invest 10,000 PKR into launching an ecommerce site ,
stocks up 20,000PKR of initial product that is to be sell
and leaves the rest 10,000PKR for social media marketing.
that means , he initially invested 40,000PKR into the basics of ecommerce business.
lets assume he runs ads for 10,000PKR for 10 Days with 1000 rupees daily budget , there are still chances that he wont get any order, the reason is because of the Facebook algorithm, which takes days to understand who might be the right audience to show the ad and lets assume at the end of its marketing budget, he gets 20 orders from Facebook.
that means ,
cost per product for marketing would be 10,000/20= 500PKR
that means, he would have to increase the cost of its goods to above 500PKR in order to make up for marketing and if he has to increase the price then he would be left with fewer people who will be willing to purchase it, so its a double edge sword .
So , in short , it would be tough for any new individual willing to start an ecommerce business and if he have to make it successful , well he must then bear the cost of losses too initially.
So who becomes more successful in an ecommerce industry? the one who teaches students and take a net profit (fee) back home or the one who has to start with an investment and has to face uncertainty for Facebook or other social media marketing strategies.