Mobile phones may change Pakistan’s entrepreneurial culture

Mobile commerce is an area which has massive potential in Pakistan. The user base is growing rapidly and the use of smartphones is likely to become a key element in educating the lower socio-economic classes. Regulatory authorities are working on ways to increase mobile commerce in the country. Despite this, a lot more work still needs to be done. Small businesses and entrepreneurs should take the lead and start promoting through e-commerce now!

Going forward, the online market place is set to become the ultimate growth driver for micro enterprises and small businesses.Accessibility to online communication and e-commerce has increased substantially over the past decade.

According to the Pakistan Bureau of Statistics (PBS), mobile phone imports to the country crossed 753 million dollars for the fiscal year 2015-16 – the number stood at $722.6 million for the previous year.

Pakistan is not a manufacturer of smartphones, and even the largest player in the country’s smartphones market, QMobile, uses Chinese vendors for its manufacturing. Since domestic production is non-existent, it is fair to ascertain usage based on the import numbers.

Rising imports show that the spending power of the nation is increasing, and a smartphone is almost becoming a necessity. A wider user base is positive not only for the cellular companies, it is also an invaluable resource for budding entrepreneurs and small businesses.

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Entrepreneurs and small businesses need to increase their presence on the social media. Small businesses can benefit a lot from having their own apps and reaching their customers through smartphones, having a presence through web is not enough anymore. Small businesses need to make their apps a key selling and marketing tool in their overall marketing and growth efforts. These apps can help grow their business, enhance their advertising ability by making it more timely and responsive, and increase their sales through active promotions like online coupons and other announcements.

Two issues that businesses relying on e-commerce face in Pakistan relate to the outreach to the lower income classes, and the lack of well-established and shared mobile payments systems in the country.

In case of the former, groups in the lower socio-economic strata can be brought into the network of mobile commerce over the course of time. The key ingredient here is to ‘educate’ these groups such that they get more and more ‘comfortable’ with in mobile commerce.

The idea is to give them a sense of the benefits going forward, especially in terms of facilitating them in a way that improves agency and empowerment over individual transactions.

If bourgeoning businesses can ensure the inclusion of people into e-commerce from all rungs of the economic spectrum, they will not only gain more access to the public through their phone applications (apps) and social media, they will also be able to tap into previously unexplored markets. This therefore, is the time to jump right in and test the waters.

As for the latter, the State Bank of Pakistan is targeting 50 million accounts on mobile by 2020 and some other measures are also being taken in order to ensure secure mobile payments. Service providers are also extensively focusing on investing in making mobile payment more secure and e-commerce more reliable. These initiatives can help in the development of a market for mobile shopping and payments. People are still reluctant to use mobile payment methods due to the security concerns as well as complex procedures. Regulatory authorities need to make the process simpler, more use-friendly and secure. This will give the required push to mobile phone commerce in Pakistan.

About the Contributor:
Ishtiaq Ahmed is an equity research and financial analyst. He has been studying the North American, European, and emerging markets. A regular writer for Seekingalpha.com and Motleyfool, two of the most read equity research platforms in North America. His areas of interest are Oil & gas, Utilities, Technology and Telecom. Ishtiaq is a graduate of Lahore School of Economics and currently a c andidate for CFA level III”.


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