*This post has been updated to include Q3-FY20 Numbers – Update Date: 11 June 2020*

The eCommerce market size has fallen on a quarter by quarter basis according to numbers by the SBP. Transaction’s fell by ~100,000 orders in the quarter, while revenue fell sharply by PKR 3.1 Billion to 7.1 Billion rupees.

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The eCommerce and digital payments industry has seen tremendous growth in the last 3 years. According to reports from the State Bank of Pakistan (SBP) the ‘digital-only’ eCommerce market size has increased from 9 Billion to 26 Billion rupees (FY17 to FY19). Growth continues to look promising with the current financial year already seeing 18 Billion rupees in transactions in only its first 6 months.

Growth between FY18 and FY19 for prepayment eCommerce transactions was ~40% and without Covid-19 we may have achieved similar growth numbers this year (FY20) already. However, due to fewer opening hours of retailers and a larger shift towards digital transformation we are expecting a much greater rise in PrePayment orders starting from Q3 of FY20.

Overall prepayment transactions in terms of volumes have risen from 1.2m to 5.7m (FY17 to FY19). This has been accompanied by a sharp drop in the Average Order Value (AOV) from 7,800 to 4,600 rupees over the same period. This is a promising sign as it means that prepayments are being used for a greater number of smaller transactions; not just larger ones.

How large is Pakistan’s eCommerce market size though? Unfortunately there is no definitive answer and predicting or rather guesstimating the COD market size is very difficult. While the general consensus seems to suggest that 90% of total transactions are covered by COD, when it comes to total revenue, COD more realistically accounts for 60% of all eCommerce transactions.

If we take SBPs numbers for domestic prepayment value and work out 60% for COD value then the total domestic eCommerce market size comes out to about 65 Billion in FY19, which is a growth of 40 Billion in 2 years. In the current financial year until December we have already achieved a value of 46 Billion rupees which is the same as we did in a full year in FY18.

With this article we are also releasing our data set that we have been curating for the last few years. You can download a copy for yourself from this google sheet. All eCommerce data is currently up to date and over the next few weeks updating the rest of the sheets with the latest available numbers as well.  

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