Shayaan Tahir is founder and CEO at the Home Shopping.pk. He is an Internet entrepreneur with about a decade of experience building his e-commerce business in Pakistan. Today, Homeshopping.pk is one the leading e-commerce websites in Pakistan. BR Research recently interviewed Shayaan on this venture in particular and issues affecting online commerce in Pakistan in general. Excerpts are produced below:
BR Research: We keep hearing different estimates on the market size of e-commerce in Pakistan. What is your take on market growth in recent years?
Shayaan Tahir: Pakistan has extreme potential with respect to the e-commerce industry. We keep hearing numbers through different sources but I believe there has to be a special research entity taking care of this to determine the accurate size. Being in the industry for a decade now, I know that the market size has grown with respect to some of the similar countries as well, it’s just this number has to be validated.
Today, the audience is getting more acquainted with the use of e-commerce. We foresee a great rise in the overall industry’s growth trends. The fiscal year 2017-18 has shown phenomenal growth. This has enabled us to forecast even better results in the coming years.
BRR: What led you to launch an e-commerce startup?
ST: It has all been quite unexpected. Back in the days, I wanted to get an iPod, but it wasn’t available in Pakistan at the time. I came across this website which was selling iPods but outside Pakistan; so I ordered one but it made me think about how others who also wanted to buy such products had to go through this tedious process and waiting time. Later, I ended up selling these gadgets from a local classified website. I still remember the name of my first customer whom I delivered the package myself after three months. From there, Homeshopping.pk was launched and it all fell into the place.
BRR: What types of investments were made early on in your firm?
ST: I basically started the venture with $100 out of my own pocket. And the Almighty has been really kind since then. Today, Home shopping is a renowned and reliable name in Pakistan. More than investment, I feel it’s the effort put in by the team and the love from our customers which has brought us to the level where we are today. We have received no external funding so far.
BRR: Your platform has been around for a while. Over the years, what kind of specialization and target market has it developed? And who are you really competing against?
ST: We are one of the oldest e-commerce brands in Pakistan. We are, in fact, the pioneers in this industry. We are extremely customer centric. We believe in giving best experience to our customer base, starting from visiting the website to ordering and having it received. Our focus throughout is not just bringing traffic to our website, but to have people place an order.
We operate with an Omni-channel approach; we also have outlets, which help us to differentiate from others in the industry. We believe in giving customers the best service every time, so they visit us again. This drives loyalty and retention.
We have a number of categories catering to both high- and low-involvement products and services. But mostly, our users rely heavily on buying electronics and mobiles phones from us. Reason is that these items need to have aspects of reliability and authenticity, which we provide to our customer base.
As for competition, I think Daraz is one player to look at, mainly due to the expansion they have done over the years.
BRR: Tell us about your website traffic, your target audience in terms geography, product mix, demographics, etc? What is your market share?
ST: In terms of traffic, we are ranked at number two position in the Pakistani e-commerce arena. We have traffic of 1.5 million visitors monthly.
We have a variety of products ranging from mobile phones to electronics to gaming consoles and gadgets, fashion and accessories to musical instruments. We basically sell anything that can cater to multiple needs of the consumers. We are also working to add more categories, which will enable users to have a one-window solution with Homeshopping.pk.
We have people visiting the website and ordering from all across Pakistan. But 70 percent of the orders are from metropolitan cities (Karachi, Lahore and Islamabad), spread across all age groups. But the larger chunk is of customers in age cohorts of 25-34 years, followed by 18-24 years.
BRR: Let’s talk about the industry in general. Why do you think cash-on-delivery (COD) is still the dominant mode of transaction settlement?
ST: Firstly, you can say, COD is the dominant payment mode in our country because users are either uncomfortable with spending through plastic cards or using online payment system. So, this has a lot to do with the conventional trends. At the moment, Pakistani’s are breaking through the conventional trends and becoming aware of the e-commerce technology.
But still, there is quite a big population which still relies on shopping physically. COD actually helps them to explore online methods in a safe way where they can order something, have it delivered at their doorstep, and ensure product quality before paying for it.
BRR: Based on your experience thus far, what are some of the critical success factors for an online marketplace to become commercially viable in Pakistan?
ST: In the e-commerce industry, we feel that every day you learn and improve because people are far from experiencing the products physically and meeting high authenticity levels with accurate reliability. For us, the user experience is very important – from spending overall time in exploring and coming to their purchase decision to secured payment methods and logistics.
Once all of the online experience is taken care of, responsible delivery of the product to their doorstep comes in second. Our delivery model is also thoughtful; we encourage customers to check their ordered products at the doorstep before accepting it and paying for it. We feel these are the factors which have led us this far & made us stay in the business.
BRR: What are the challenges facing online marketplaces?
ST: Firstly, it is challenging to build a reliable platform where users feel comfortable visiting and spending time on. Secondly, ordering process should be smooth and absolutely verified. Then there is the secure payment system, followed by logistics.
BRR: What kind of policy support can the government offer to this industry?
ST: Now that the industry is expanding with local and international players operating in Pakistan, it is high time that the government should have a specific regulatory framework designed for e-commerce industry. Clear-cut regulations must be made to provide a safe and secure playing field for existing as well as new companies in this field.
BRR: What kind of a policy framework do you have in mind?
ST: It should have guidelines that set certain standards and dos & don’ts for the industry. The government should create a forum with top ten ecommerce players to develop more secured services and safe payment model. By setting such standards, the industry can see tremendous growth.
Expansion in this industry will give rise to employment and enable international giants to invest in the country. That will ultimately result in an improved economy. Countries like China and India have not become billion-dollar e-commerce markets overnight. Those markets were encouraged by their governments and gradually grew to this level.
BRR: Talking of international giants, Alibaba has reportedly acquired Daraz. How do you think this will impact the local market?
ST: The e-commerce space is emerging in Pakistan. To have giants like Alibaba here will bring a lot of dynamism and healthy competition. This will give rise to improved services and better systems. These sorts of ventures bring stability in any industry and especially in the e-commerce sector.
We should expect a bigger shift from the consumer end because people respond to quality services. And that’s how markets change and trends are set. This deal has signaled reliability and prosperity in the industry. You can see that Pakistan is a great market with people wanting to try out new things.
Following this deal, I am quite certain that local giants will now also find it easy to invest which will help the e-commerce scene expand in Pakistan.