We have always heard every eCommerce business owners in their Interviews or on Social Media that the Industry will cross 1 billion or 2 billion mark by the end of this year or that year.
But everyone in Pakistan know that it might not be possible due to some Bad practices they're doing. whether it's Sales or Product Quality, Order Delivery or Customer Service, they still lag on most of the core operations.
Immense Challenges for eCommerce Businesses
- One of the immense Challenge they face is Order Cancellations
Why? Every online Store uses a Common payment method COD (Cash or Collection on Delivery). This method was introduced long ago to facilitate every customer who doesn't have any access to banking facilities or just for their ease. But most of the people uses method just for Fun (Let's say window shopping in other words). They order any certain product and when the Store Dispatches the product, Customers either cancel the order or refuse to take the delivery from the courier company (indirectly cancelling the order).
Because of those customers, every other customers and the online store faces trust issues in the future. Many Online stores have also witnessed that their competitions have placed orders on their portals to increase their cancellation ratio resulting in negative reviews.
- Second challenge they face is absence of Banking facilities for their online businesses
Banks in Pakistan are still not yet prepared for any Credit Card or Debit Card Payment Acceptance made through online stores resulting in Long payment processing which takes more than 10 days (well most of the times). Either the Customers makes their payment or the Store issues a refund and asks the bank for the reversal of the amount.
Because of the Long Reversal Process, the customer thinks that the store is Fraud and files complaints to the agencies and in some cases they've even registered court claims.
- Another challenge is from the courier companies
By Using COD options, courier companies holds the amount collected from the customers for upto 15 working days. This causes issues of Cash Flow for the Online Stores to make further payments to the merchants to continue their Partnership.
With a loose interest in doing business with an Online Store, merchants doesn't fully corporate with them causing low updates on Inventory which results in order cancellation due to non availability of the products or merchant demanding advance amount from the online store to provide the inventory.
- One more challenge is Lack of Knowledge and Bad Influence
Many people in Pakistan are not fully familiar with the eCommerce industry in Pakistan, how it works. They misguide others which triggers suspicion among them in trusting online stores. This suspicion provokes online stores to offer COD to make a sale and the Cycle Continues....
Why These 4 Factors are Significant
If Banking operations are nimble enough for Online Transactions via Online Stores, they will only get Legit Customers who want to make purchases with the them. By receiving the payment in Advance they wouldn't have to wait for 15 Days to get the amount from Courier Companies resulting in swift payments to the merchants and making a Win Win Situation for all 5 Parties involved in a Single Transaction
In the End, if eCommerce industry doesn't spread the awareness and literacy among the people of Pakistan in the 1st Place, and keep promoting their Sales plans with Banking Institutes instead of Upgrading Banking Operations for Smooth & Rapid Online Transactions with Credit & Debit Cards or By Online Banking, They can never achieve the Mark they have promised or they Claim to achieve.
We'll get back soon with the Other side of the coin, The Customer. They also face many challenges like the eCommerce Industry does. Keep tuning-in
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