Online sellers – Focus on these 5 areas

It is very encouraging to observe that online sales are becoming acceptable in Pakistan.  More and more households are turning to their computers or smart phone to browse, compare and purchase goods and services everyday.  Companies such as daraz.pk, zameen.com, gaari.com, apnimotorcycle.pk, etc. are becoming household names and are doing good business too.  Covid-19 pandemic also acted as a blessing in disguise for online business.  Respecting the requirements of staying at home, going out only when necessary, maintaining social distancing, using masks etc. are not only safe and healthy practices to fight against covid, but they also acted as boosters for people to look for alternatives for their everyday shopping needs.  Following became not only convenient but also cost effective in some cases:

• Doing research online
• Placing sale/purchase ads online
• Comparing prices before actually buying anything
• Placing orders on phone and getting grocery delivered at home
• Placing orders online and getting goods delivered at home
• Ordering gifts for loved ones on their important occasions, and getting the same delivered

Not only the above helped increasing remote and/or online sales, it also supported the shipping/delivery industry.  In addition to formally organised businesses lost of smaller operators got into the delivery business, where they would just pick up orders from suppliers, deliver the goods to the customers and collect the payment.  This also provided employment opportunities.

All above is good, however, can work only in a local and domestic market, where goods can be easily delivered by formal or informal couriers, payment can be collected by same individuals and no specific packaging is needed as shipping is mostly individual items.

Online sales industry in Pakistan is still in its infancy stage.  It has great growth potential but if the industry is looking for more lucrative export market there are some key areas that need major improvement, such as:

1. Payment system
2. Packaging
3. Shipping system
4. Customer service
5. Returns

Let us talk about the above:

1. Payment system:  A vast majority of online sales happens today on COD (Cash on delivery) basis, where customer places order online, but does not make payment online.  When the ordered goods are delivered the customer makes cash payment and collect the goods.  Though it works, COD is not considered best of options for online sales.  Further COD sales can only happen locally, goods and/or services can not be exported using the same payment method.  More common and industry standard payment method for online sales is online payment either directly thru bank transfer, by using debit/credit card or by using a third-party payment processer such as PayPal.  Unless Pakistani online stores can not offer online payment, they are not exploiting full potential of online sales and are missing a big and very attractive market segment of international sales.

Action needed:  State Bank of Pakistan, Pakistani banks and/or some technology entrepreneur need to take initiative and establish some competitive, safe, and internationally accepted online payment channel that can be used for online payments.

2. Packaging:  When things need to go distance, they pass thru several means of transports, stored at several locations in different conditions and are handled by several people in different situations, moods, and weather.  Things need to be packaged accordingly.  Just wrapping or putting in boxes dopes not guarantee things would remain safe.  They need to be waterproof, and load proof to maintain their original shape and form.  Yes, it does cost to package things properly but if things are delivered damaged or deformed an unhappy customer costs may time more.  The point here is not to overspend on fancy wraps it is to package things appropriately considering where it needs to go and how.

Action needed:  Online sellers pay special attention to the needs and appropriateness of packaging of the sold goods to avoid unhappy customers.

3. Shipping system:  In online shopping customer does not only look at the list price of the product/service they are purchasing, but they also look at the total delivered cost to them, a major part of which is the shipping cost.  A very good quality and competitively priced product may not sell online if the shipping cost and time is high or if the product and shipping costs are competitive but the delivery time due to shipping is very long. 

Hence for successful online sales, in addition to offering good quality products at competitive prices the seller must also offer very competitive shipping rates as well as fast delivery.  Ability to track the shipped goods is also considered a norm today.  Pakistan has good intra city and inter city courier networks, but international shipping becomes very expansive. 

Action needed:  Courier companies in Pakistan should partner with international courier companies to offer competitive rates.  Pakistan Post should also revamp its international shipping services and access to local exporters.

4. Customer service:  Lets be honest, customer service is one of our weakest areas as a nation.  Not everyone is that tech savvy, not all sales go smooth and not all goods meet customers expectations.  However, all above can still be good for business if handled appropriately i.e., by providing a good customer service.   For getting answers to their questions, seeking help with placing orders, making complaints, making returns and/or for creating and following up on disputes, the online shoppers rely on the seller’s customer services either thru telephone, text, or emails.  A customer may come back to your site if the product was expansive or was not available but his/her chances of coming back are very slim if he/she did not get a good customer service. 

Action needed:  Focus as much on a prompt, easy, friendly, and fair customer service as you do on making your products better and keeping it competitive.  We need lets of work here.

5. Returns:  A lot of online buying is impulsive buying, and an easy returns process supports impulse buying.  Any idea why people almost blindly buy goods from Amazon or Walmart? Among many other reasons a very popularly talked about reason is the ease with which one can return anything for any reason.  So, people pickup/buy things impulsively that they will think later and would return if they did not like or need the same.  Interesting enough most of the things are never returned, even if buyers do not like or need the same.  Yes, returns cost to the seller but easy returns help increasing sales that more than compensates for the return’s costs. 

Action needed:  On your online store, offer a no hassle, quick and easy return procedure that is 100% risk free and asks no questions.   

So, online sellers widen your horizon by targeting international buyers, but prepare well for this cutthroat competitive market thru offering safe, quick, and convenient online payment options, packaging your products appropriately, using efficient and cost-effective shipping systems, providing a great customer service, and offering a 100% risk free no questions asked return policy. 

Similarly, State Bank of Pakistan, Pakistani banks and entrepreneurs should work to establish a safe and internationally accepted payment processing platform to facilitate online sales internationally.  Idea is to increase exports through thousands of streams rather than just one or two products.

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Babar Saeed

bsaeed@yahoo.com

March 27, 2021