Pakistan’s e-commerce sector has witnessed remarkable growth, reaching a valuation of $7.7 billion in 2024, with retail e-commerce alone contributing $5.4 billion. This upward trajectory is expected to continue, with projections indicating a compound annual growth rate (CAGR) of 17% through 2027. Despite this rapid expansion, small and medium-sized enterprises (SMEs) face significant challenges in fully capitalizing on the e-commerce boom.
One of the primary obstacles for SMEs is the integration of digital payment systems. Many businesses struggle with adopting seamless online transaction mechanisms, limiting their ability to cater to a broader customer base.
Additionally, unreliable internet connectivity, especially in rural areas, hampers the efficiency of online business operations. Another pressing concern is consumer trust, as apprehensions regarding online fraud and counterfeit products deter many potential buyers, affecting SMEs' customer acquisition and retention.
These hurdles also restrict SMEs' access to international e-commerce markets, reducing their competitiveness on a global scale. However, initiatives from both the government and private sector aim to address these challenges. Visa, in collaboration with 1Link, is working to increase the number of businesses accepting digital payments tenfold over the next three years.
Infrastructure development is also being prioritized, with efforts underway to enhance internet reliability and accessibility. Furthermore, cybersecurity measures and consumer education campaigns are being introduced to build trust in online transactions.
With sustained efforts to overcome these challenges, Pakistan’s e-commerce industry is poised for continued expansion. By addressing the existing bottlenecks, SMEs can gain better access to digital opportunities, enhance their market reach, and contribute more significantly to the nation’s economic growth.