82% of Pakistani urban consumers made a online purchase in 2018: Nielsen

LAHORE: A report released by Nielsen “2018 Connected Commerce” has revealed 82% of consumers having access to the internet in urban areas have made an online purchase, up by 6% from 2017.

According to Nielsen, the growth of e-commerce in the last few years because of the rise in internet and smartphone penetration, especially in the country’s urban areas has contributed to the online sale of particular categories.

Fashion accounted for the largest slice of online transactions of 40%, followed by travel 31% and IT 29% respectively.

The report outlines consumers’ online purchasing habits and it disclosed categories which posted significant growth in e-commerce activity included restaurant deliveries 24%, 22% in beauty and personal care products, books and music 28% respectively.

The report determined that consumers are more conducive to making online purchases when offered a couple of purchasing options and quality assurances.

Furthermore, the report highlighted approximately 55% of the consumers stated that a money back guarantee for products not matching what was ordered would encourage them to buy online.

Also, 49% of consumers shared that free delivery for purchases above a minimum spend would contribute positively impact their buying decision.

Managing Director Nielsen Pakistan, Quratulain Ibrahim said, “Travel, fashion and IT are typical categories for first-time online shoppers, but as their familiarization, comfort and trust levels increase, their category range expands.

They start looking into areas like beauty, personal care and baby products, and then move even wider afield to restaurant deliveries or meal-kit delivery service categories.”

“This is evident in the significant jump we have seen in online purchasing within food delivery in recent years, especially in urban areas and city centres,” she added.

Global online sales in 2017 totalled $2.3 trillion or 10.2% of total retail sales and is expected to reach 17.5% by 2021.

“Online retail development correlates strongly with constantly improving internet access, especially in mobile-first communities.

With connectivity and digital development exploding in Asia, it is no surprise that the fastest growing e-commerce markets are located there,” said Nielsen.

The global online sales of fast-moving consumer goods (FMCG) products are growing four times faster than offline sales, and Pakistan, despite facing infrastructural impediments, is expected to follow the same route but at a varied pace, according to “Nielsen Future Opportunities in FMCG E-commerce” report.

As per the aforementioned report, it surveyed the current growth drivers of FMCG e-commerce in 34 markets and projected that the global online sales will touch as high as $400 billion by 2022.

Nielsen said, “Pakistan being a developing country with the largest youth population (which is more tech-savvy compared to older generations) is also expected to adopt the emerging e-commerce trends.”

“Some of the regions in Pakistan, especially rural areas have been fairly isolated and may explain why 24% of consumers strongly agree that internet connectivity is a barrier to online shopping while 37% somewhat agree,” it added.

According to the State Bank of Pakistan’s “Annual Performance Review 2017-18” report released last month, the volume of transactions in FY18 processed via retail e-Banking channels i.e. real-time online banking (RTOB), ATMs, POS, mobile phone banking, internet banking etc touched 756.5 million valued at Rs47.4 trillion.

The number of local e-commerce merchants registered with banks reached 1,094 and consumers carried out 3.4 million online e-commerce transactions valued at Rs 18.7 billion.