Use of e-commerce in Pakistan:
Pakistan’s e-commerce market size posted a growth of over 35 per cent in the first quarter of
the fiscal year 2021 to Rs96 billion compared to Rs71bn over the corresponding period of last
year, the Ministry of Commerce said on Thursday.
The meeting was informed that e-Commerce merchants with prepayment have been increased
to 2,164 from 1,410 in the past 12 months.
Market expansion in in Pakistan is expected to continue over the next few years, as indicated
by the Statista Digital Market Outlook. It has been predicted that the compound annual
growth rate (CAGR 20-24) for the next four years will be 18%. Compared to the year-overyear growth of 90%, this decrease suggests a moderately flooded market. Another indicator
of market saturation is the online penetration of 19% in in Pakistan; in other words, 19% of
the Pakistani population have bought at least one product online in 2020.
Five categories are considered by ecommerceDB. Fashion is the largest segment in in
Pakistan and accounts for 68% of the eCommerce revenue in in Pakistan. This is followed
by Electronics & Media with 13%, Food & Personal Care with 10%, Toys, Hobby &
DIY with 5% and Furniture & Appliances with the remaining 4%.

The market's largest segment is Fashion with a projected market volume of US$4,251m in
2021.
 In 2021, 36% of total eCommerce purchases will be paid by Cards.

E-commerce has emerged as a revolutionary contributor to the Information Technology
Sector. The term Ecommerce conjures up in mind a litany of axiomatic words and colloquial
terminologies one can recall from the basic jargon etched in our brains. Keeping the general
lexicon aside, the term E-Commerce has substantially expanded world over and has been
expounded to include a host of ventures and businesses like online shopping websites,
Technological Startups, IT companies, etc. Pakistan is the sixth most populous country in the
world (approximately 200 million people) and the nascent Ecommerce industry in Pakistan
has exponential room for growth. There have been a bevy of entrants in the industry as more
and more people are making robust forays in the E-commerce industry. Not only have the
online shopping businesses flourished but a plethora of E-commerce companies pertaining to
real estate, the culinary world, transportation and commuting, sale and purchase of vehicles,
hotel booking, etc. have sprung up given the auspicious economic environment. Infect, the
number of startups and businesses in the sector are predicted to increase significantly in the
near future. E-commerce in the west and globally is ubiquitous as it is an ever expanding
industry worth billions. Innovation and advancement in technology has enabled the world to
enter the epoch of smart homes and cities which currently is an unfathomable phenomenon
for Pakistan but it is happening nonetheless.
There is a direct link between the internet users and Ecommerce industry. As the internet
subscribers increase in Pakistan, the chance of more E-commerce activity increases. Figure 1
shows the number of people utilizing internet services in Pakistan and that only 14% of the
population is linked to the internet. Around 28 million people were using the internet till
2014, however, growth rate of internet users has been exponential. The number of users
utilizing internet services increased by 26% from 2013 to 2014. Based on the average of the
last four years (according to Figure 1) it can be predicted that by the year 2020 the internet
users will increase to 32% of the whole population.
The figures mentioned above show that given the population of Pakistan only a miniscule
portion has direct access to the internet, from which we can extrapolate and further narrow
down the number of people who are amenable to using online applications, who visit online
websites, those people who apply through online job searching websites, etc. Perhaps a small
proportion to begin with, however, this is an extremely encouraging precursor since there is
massive room for growth as the market is virtually untapped. Widespread access of the
internet will mean a greater propensity of the masses to use it. Moreover, Internet Penetration
is a vital factor which can augment the number of potential users of online businesses' and
can ultimately increase customer traffic on such websites.
Mobile Commerce:
In the future a
significant chunk of the
E-commerce activity in
Pakistan will be
supplemented through
mobile phone usage.
The reason is that there
is insufficient fixed line
infrastructure in
Pakistan and wireless
technology is more
affordable and accessible. Availability of inexpensive smart phones in the market has given a
chance to the common man to gain access to the internet. Smartphones have the ability to
provide an option of interacting with people all over the world and give access to unlimited
information. This opens a window of opportunity for the retail industry, and consequently,
countless ecommerce companies have sprung up in hope of making a mark in this sector.
With the emergence of ultra-fast Mobile Internet subscriptions, internet access in the urban
metropolitan centers has become omnipresent, while in far flung places internet access has
been introduced only recently and is gradually gaining traction.
The awarding of 3G/4G licenses to telecom companies in mid-2014 has also fueled growth of
the internet. According 1 to a report by GSMA , there has been exponential growth of 3G and
4G connections since their introduction in Pakistan. The growth has been 33% in the third
quarter of 2015, due to this great response by the public, 3G coverage is expected to reach
90% of Pakistan by 2020. It was also noted in the study that there are approximately 60
million people who have access to mobile phones in Pakistan. According to the Social
Networking Website, Facebook, there are 20 to 25 million active Facebook users in Pakistan.
Figure 2 shows that 70% of users access Facebook through a mobile device. A 2015 study by
the German Scientific Institute of Market 2 Research GfK found that around 40% of
consumers surveyed in 23 countries use their mobile phones to compare prices of products
when visiting a store. A recent survey by Google revealed that 76% of the visitors used a
mobile device. Similarly, 63% of the visitors accessed Daraz.pk (Pakistani E-commerce
website) via mobile, this number was at 30% just about a year ago and has increased
significantly. Shayaan Tahir (Founder and CEO) of Homeshopping.pk told The Express
Tribune recently that 50% of their traffic is now coming from mobile phones. All these
reasons indicate that mobile commerce will be the market driver in a dynamic market like
Pakistan.
Social Media:
A Tremendous Potential Social Media: A Tremendous Potential for Ecommerce Social media
and its variants intensify internet usage as it cajoles people to explore areas and venues which
as a customer one is not acquainted with or is introduced to for the first time. The rapid
expansion of E-commerce hinges on certain external elements. In today's globalized world of
social media information and its access is intertwined and woven with all subsequent social
media outlets. Facebook, a popular Social Networking Website in turn plays a crucial role not
only in connecting the multitudes but is also a direct and indirect source of marketing. Most
organizations, companies and businesses have their respective pages on Facebook and the
number of likes a company garners discerns the popularity and following of the particular
brand, business or organization. A lot of online businesses and domestic businesses market
their ventures via their Facebook pages and the indirect paid marketing platform which
increases visibility of the particular brand. What this accomplishes is that scores of users can
also order directly from Facebook and can furthermore interact with particular online
businesses with personal feedback in the form of written testimonials, pictures, personal
experiences with the product(s), emoticons, Facebook shares, etc. Since the number of
Facebook users in Pakistan is exceedingly low there is tremendous potential and room for the
industry to grow as the masses indeed show the penchant for adopting and accepting the
online system.
. Pakistan ranks 86 out of 130 countries on this index which summarizes Pakistan's
underlying capability of carrying out B2C E-commerce. The index is strongly positively
correlated to the variation in the share of individuals who shop online. The government has
incorporated E-commerce (with introduction of efficient payment methods) in its vision 2025
which shows that government is completely aware of the potential of E-commerce in
Pakistan. So far the E-commerce industry has been doing rather well.
Various trends of e-commerce that affecting corporate culture:
Evolving Trends in Pakistan's E-commerce Environment
Recent analyses on the global e-commerce environment have revealed one significant
development that e-commerce of today has quickly evolved into becoming a priority for B2B
consumers. In fact, as many as 57% of B2B companies believe that commerce is rapidly
shifting from offline to online.
These buyers increasingly prefer the option to self-serve online by researching, contacting,
buying, and managing their suppliers through a single web-based platform.
Three trends in particular that have had a substantial impact on how, when, and where B2B
companies sell their products and services are:

Innovation has made it remarkably effortless than ever for B2B companies to
affordably and quickly create an online buying experience to meet their client’s needs.

Two-thirds of B2B companies expect to stop publishing print catalogues within the
next three to five years. Instead, shifting to a mobile-friendly version for all their
operations.

Before the emergence of e-commerce, most B2B buying processes were managed on
paper, through a digital order entry system or over the phone. Though some old
fashioned B2B customers still prefer those processes, about 60% of business buyers
purchase goods for their companies online.
As businesses across the country, even around the world, grind to a halt amid the coronavirus
crisis, one industry has something of a lifeline: retail. Be it the economic recessions or muchdreaded pandemic; these black swan episodes are changing the entire course of businesses.
With COVID-19, at its all-time high, the early signs of consumer behaviour shifting can be
palpable. While the vast majority of retailers, with the exception of grocers and pharmacies,
have temporarily closed their brick-and-mortar locations, they can still sell goods to
consumers on their websites or the websites of their retail partners.
Brands that have made digital their top priority are in a better position to weather what comes
next. Direct-to-consumer businesses, for one, may find themselves at an advantage. While
some have expanded into physical retail, digital still represents the bulk of their business.
The success of the retail industry, then, would seem to rest firmly on the shoulders of ecommerce. And while digital has long been touted as the future of retail, the coronavirus
pandemic presents an opportunity for it to flex its muscles.
14 Ecommerce Trends Leading the Way
We spoke with leaders in the industry about the changes this year and they had a lot to share.
So, let's explore the biggest ecommerce trends and see where things are headed.
1. AR enhances the reality of online shopping.
2. There will be a growing volume of voice search.
3. AI helps shops learn about shoppers.
4. On-site personalization uses those insights to create individualized experiences.
5. Big data plays a big part in creating personalized experiences.
6. Chatbots improve the shopping experience.
7. Mobile shopping is still on the move.
8. More ways to pay.
9. Headless and API-driven ecommerce allow continued innovation.
10. Customers respond to video.
11. Subscriptions keep customers coming back.
12. Sustainability is becoming more important.
13. Businesses should optimize digital strategy for conversion.
14. B2B is growing...and changing.
1. Augmented reality enhances the reality of online shopping.
Augmented reality (AR) has been a complete game changer for ecommerce. With this type of
technology, shoppers can truly see the item they're shopping for, which helps them make a
buying decision. AR really changes the shopping experience in specific industries, such as
fashion and home decor because the customer can get a better feel for the item without seeing
it in-person.
In 2019, Gartner predicted that 100 million consumers will shop using AR by 2020, so it will
be interesting to see how that shakes out next year.
Michael Prusich, Director of Business Development at 1Digital Agency, agrees with this
prediction:
“Polls have shown some really powerful numbers in regards to AR too: 35% of people say
that they would be shopping online more if they could virtually try on a product before
buying it, and 22% would be less likely to visit a brick-and-mortar store if AR was available
via their favorite ecommerce store. AR grants a person with the ability to not just see a 3D
model of a product but lets a user see how it looks if they were actually wearing it. Some
products and industries lend themself better to traditional shopping methods, but AR is going
to shake things up sooner than later.”
Tessa Wuertz, Director of Marketing & Partnerships, efelle.com, also sees the potential for
even smaller to midmarket businesses joining the trend:
“We are expecting a lot more businesses to utilize AR for their products and businesses — so
much so that it will become more standard in ecommerce and social media platforms. We’re
seeing it put to use with larger companies, but I think we’re soon going to start seeing it
become mainstream for businesses of all sizes.”
2. There will be a growing volume of voice search.
Not only do more people own smart speakers, but they also rely on voice assistants to
complete daily tasks. Loop Ventures forecasts that 75% of U.S. households will own a smart
speaker by 2025.
As more homes adopt smart speakers, more consumers will utilize voice search to shop
online, order food and organize their lives. The rise of voice search creates an opportunity for
ecommerce businesses in terms of keywords and content.
David Zimmerman, Director of eCommerce Solutions, Kensium, included “more
involvement of voice-enabled solutions in the commerce space with Amazon Alexa and
Google Home” high on his list of 2020 trends to keep an eye on.
3. AI helps shops learn about shoppers.
Artificial Intelligence (AI) and machine learning make it possible for the customer to have
automated, personalized shopping experiences. AI is continuously collecting data on how a
customer shops, when they buy purchases and what they're looking for in a product or a
service. It's a piece of technology that really can't be replicated in-store.
Ron Smith, Editor in Chief, The Digital Outdoor, emphasizes how the complexity of AI and
the ability to make it more human is also increasingly important:
“People want to know that brands care about them, and AI will be programmed accordingly.
We have currently seen the opposite behavior on social media, where AIs learn from humans’
more negative remarks, but it’s highly likely that consumers will crave the impact. If bots can
learn how to form sentences to convey an emotion, companies can soon teach them to offer
comfort and products based on customers’ moods.”
4. On-site personalization uses those insights to create individualized experiences.
Buyers of all sorts — including B2C and B2B — are looking for personalized, custom
shopping experiences online. The data collected from AI is what makes it possible for a buyer
to get personalized product recommendations and detailed customer service.
Implementing personalized experiences on-site or in marketing efforts has been shown to
have a strong effect on revenue, with one study finding it had a 25% revenue lift for retailers
scaling advanced personalization capabilities.
For further context, this accounted for 19% of participating companies while retailers that
were "building basic personalization capabilities" achieved "a revenue lift of 10% or
more; the retailers in this tier account for 40% of the participating companies.
Kaleigh Moore, freelance writer and ecommerce specialist, sees AI-powered personalization
becoming increasingly relevant in 2020:
“As brands harness and leverage more data, they’ll be able to create incredibly relevant
experiences for shoppers that feel tailor-made.”
5. Big data plays a role in creating personalized experiences.
Today, many consumers are more aware that ecommerce sites are collecting personal data,
which puts them at risk. Because of this, experts have mixed feelings about the benefits of big
data and how it affects the personalized shopping experience.
Luis Catter, Conversion Rate Optimization Expert at Kensium Solutions, has his own
predictions for how personalization will continue to evolve alongside data concerns:
“As the tech giants continue to expand and bring more services in-house, personalization will
eventually make its way to the internet of things. In addition to seeing suggestions on search
engines or shopping platforms, we’ll also see them on our thermostats and our doorbell
cameras. However, with some of the legislation being enacted, we’ll be able to opt out of it.
This will create an interesting dichotomy — people who have ultra-personalized experiences
and those who do not. This will have interesting impacts on how we as marketers are able to
reach new users.”
6. Chatbots improve shopping experiences.
Chatbots interact with online shoppers much like an in-store sales associate would do.
Today's shopper wants to be able to find and buy a product in just a few clicks, and if they
can't, they get frustrated. This is where a chatbot can step in and save the sale.
Experts predict that 80% of businesses will be using chatbots in 2020.
Shane Barker, Founder and CEO of ecommerce thought leadership
blog shanebarker.com/blog posits:
“Chatbots are all the rage today for customer support. However, I think they’ll drastically
change the way people shop online. They’ll become one of the most important marketing
tools. In the retail space, self-checkout kiosks will probably become the norm and in-store
marketing will increase.”
Duran Inci, CEO of Optimum7, sees chatbots becoming increasingly personalized to improve
the customer experience:
“The same way chatbots are becoming more intuitive, so do I think that personal shopping
assistant bots online will become more prevalent, using previous data to help anticipate new
products that you’ll like. Similar to Amazon’s suggestions for similar products.”
7. Mobile shopping is still on the move.
Mobile shopping allows customers to make purchases from anywhere, which is vital in
today's world. However, if your ecommerce site isn't responsive on mobile or through web
apps, you'll be missing out on big opportunities. Shoppers who are mobile users want the
added convenience, plus the ability to pay digitally.
In 2019, Statista estimated that by the end of 2021, 73% of ecommerce sales will take place
on a mobile device.
Corey Dubeau, VP of Marketing at Northern Commerce, is one of many who see “improved
quality and more mobile payment integrations” to be a harbinger of change in 2020.
8. More ways to pay.
Customers have individual needs when it comes to payment methods, but they might cancel a
potential sale if they can't pay how they want on an ecommerce website. Offering a wide
variety of ways to pay is a good way to increase conversion rates on mobile devices. Plus, if
customers can save their payment information on your site, they'll be able to checkout even
faster the next time they make a purchase.
Joe Chilson, Head Writer and Account Manager, 1Digital Agency sees centralization of
payments also making strides in 2020:
“Think about how easy it would be to buy a product on any website if, at checkout, you could
simply give them an ID unique to you. This unique ID would be for a centralized wallet
service that would securely store all your payment info, shipping and billing addresses,
preferences, etc. Companies like Apple and PayPal have taken shots at this in the past, but I
think it could become more normalized.”
9. Headless and API-driven ecommerce allow continued innovation.
Headless commerce is a solution that allows an online store’s ecommerce platform to be
completely decoupled from the frontend presentation layer.
More ecommerce businesses are adopting headless because of its flexibility on the backend,
plus the added SEO, content marketing and digital experience capabilities.
LARQ Ecommerce Architect Antonio Kaleb explains: “With headless, we get more control
over our content and customer journey through checkout. We had a multi-region need that
was solved for with the headless BigCommerce solution, allowing us to combine all of our
stores into one single domain, for which we have developed additional features.”
10. Customers respond to video.
Video proved to be a great way to engage customers in 2019, and it's not going away anytime
soon. Creating videos for your website is a great way to instantly grab and engage a customer
and inform them about your product or service.
Ron Smith, Editor in Chief, The Digital Outdoor considers how video can be used to help
educate customers:
“I see the use of podcasting and short video content to augment the opportunity for buyers to
learn about how an ecommerce brand’s products and services provide the solution to the
opportunity, challenge or problem a buyer is looking to answer. With these two forms of
content development comes the technology to micro track a viewer’s engagement…”
Shane Barker further emphasizes the importance:
“The importance of videos can’t be understated. Videos can help you explain and showcase
your products better than images ever can. You should consider adding videos of your
products in your ecommerce store.”
11. Subscriptions keep customers coming back.
There are subscriptions of all sorts these days and their convenience is attractive for
consumers. For companies, subscription services create a way to plan for inventory and sales
that are already locked in.
David Zimmerman, Director of eCommerce Solutions, Kensium still predicts that “more
companies will offer subscription services or monthly payment options for larger purchases”
in the coming year.
12. Sustainability is becoming more important.
Consumers and businesses alike are becoming more aware of the environment. Because of
this, consumers are being more conscious about where they shop and the impact it has on the
environment and related effects.
One survey found that 50% of respondents wanted more sustainability in the fashion industry,
and 75% wanted to see less packaging.
Many businesses are finding ways to be more eco-friendly by going paperless when possible,
using biodegradable packaging, and using recyclable supplies.
13. Businesses should optimize digital strategy for conversion.
Getting potential customers to your site is one task but getting them to convert is another. In
2020, businesses are looking to improve their conversion rates by optimizing their product
pages. Multi-channel selling is also another way to get conversions, whether through
Facebook advertising or shopping ads on Google.
Scott Ginsberg, Head of Content, Metric Digital adds:
“More and more brands are competing for the same eyes. Facebook’s algorithm rewards
video and motion-based creative that are more likely to hook your audience quickly. And
customers are also more demanding, impatient and curious than ever before. Make sure you
understand the ins and outs of Performance Ad Creative that doesn’t only look cool, but also
drives conversions. Using those channels intelligently is the best way to make sure your
brand will be uniquely positioned to stand out in the continually changing digital marketing
landscape.”
14. B2B is growing...and changing.
If you were ever worried that B2B would go out of style, fear not. Global retail ecommerce
sales for B2B are expected to reach $1.1 trillion in 2021, according to data from Statista.
Forrester predicts that by 2020 almost half of all adults will be Millennials, which also means
an increase in Millennial B2B buyers. Both of these audiences want to be able to easily
research their needs and related products without conversing with salespeople.
B2B ecommerce brands are working to meet these needs. Connie Wong, Marketing
Manager, Silk Software, talks about this transition:
“The days of orders needing to be placed through fax order forms or phone calls only are
shrinking. More and more businesses are beginning to see the value in servicing their
customers online. By automating these tasks through their ecommerce site, teams are moving
away from spending the bulk of their time on processing order entries from email
spreadsheets or hard copy forms. Instead, they are shifting their focus towards what matters
most: engaging with customers, providing them with an excellent customer experience, and
establishing ongoing client relationships.”
Weighing Your Options: Deciding if a Trend Makes Sense for Your Business
Not every trend is worth jumping on, but which one deserves your time and effort? While
some will provide a huge value-add, others might be out of touch with your particular
audience or might be too costly to implement for your business to maintain a reasonable ROI.
Knowing what trends will be a good fit for you will often come down to knowing your own
customers, vertical, and competitors backwards and forwards. There's several things you can
do to evaluate industry trends and make the right move for your B2B.
1. Keep track of industry influencers and publications.
Follow blogs and related news in the industry so you can stay on top of what's happening.
Start by finding influencers and publications related to your industry specifically, and then
branch out into other markets to get the whole picture.
2. Absorb up-to-date industry research and trends reports.
Every industry changes at some point or another, and staying up to date via reports and data
can show you where things are headed. The numbers in these reports often come from
original research you can trust, instead of just following the popular word-on-the-street. Plus,
when you're regularly aware of what's happening in your industry, you'll grow a sense of
what trends are worth the effort and what ones can wait.
3. Make the most of digital tools and analytics to assess your customers' behavior.
Use customer data to evaluate if a trend is right for you. What do the numbers show? Many
trends might work for other businesses, but you know your customers best. Consider utilizing
more than one data gathering tool so you can see customer trends from different sources. Use
these numbers to see the overall trends in your business. Would adopting a new trend
interrupt your customer behavior?
4. Get feedback from your customers.
Don't be afraid to ask current customers what they need. Getting feedback from current
customers can give you insight into trends, and you can create more specific plans for the
future. You never know, a customer might even suggest an idea you hadn't thought of yet.
5. Observe your competitors.
Take a look at your competitors. Did they jump on a specific trend? If so, how did it work for
them? Of course, you don't have to do everything your competition is doing, but being aware
is another way to measure a trend.
Conclusion
Okay, so there's a lot of new things happening in ecommerce. Technology and people are
always evolving, and since ecommerce brings it all together, we are always going to be
looking toward the future. One thing is for sure, is that it's never too late to jump right in,
learn something new, and evaluate if it's right for your business. For now, consumers are in
the driver's seats and ecommerce businesses will be customizing the journey ahead for them.
Diversity of E-commerce Players in the Country


Multi Retailer Platform
These are the dominant forces in the e-commerce industry having a wide collection of
products listed on their websites. Examples of these platforms are Daraz, Symbios,
Foodpanda, Bookme.pk, Yayvo, Goto, Well.pk, etc.


Niche Retailers
They focus on one niche and try to leverage their speciality to drive sales. Examples are
online stores like Higher.com.pk and Babynestboutique.com.


Retailers
Companies having their own online stores through which orders can be placed. Retailers like
Gul Ahmed, ECS, J., Sana Safinaz, and Khaadi are good examples of this category.


Social Media Retailers
Social media retailers having well established Facebook or Instagram stores or groups.
Certain organization that adopted a certain Ec model.
Founded in 1999 by Jack Ma—who claims to have no knowledge of coding and very little
experience with computers—Alibaba is an unlikely retail juggernaut.
What was once a startup employing only 18 people now has over 22,000 employees.
The international company’s market cap recently broke $400 billion, and currently
claims 80% of online sales in China.
So what’s it about?
Alibaba helps connect wholesalers primarily based in China with nearly 200 businesses
around the world.
This structure enables a company in the United States to identify a manufacturer abroad and
have various products made and shipped.
Recently, the company has set it sights on increased international brand recognition. Last
year, the company announced that former basketball player Kobe Bryant and the music group
OneRepublic would join singer Katy Perry as global ambassadors.
And as of 2017, some market analysts have noted that Alibaba is a better investment than
Amazon. That’s a pretty tall order. Let’s take a look at the inner workings of Alibaba.
he international business-to-business (B2B) site connects suppliers with buyers across the
globe on a single marketplace platform.
Suppliers manufacture and sell products in bulk to buyers looking for inventory for their
companies.
The company also operates other related e-commerce sites, including Taobao, Tmall, and
AliExpress.

Taobao: C2C site similar to eBay

Tmall: B2C site similar to Amazon that allows foreign companies to sell to Chinese
consumers

AliExpress: Alibaba’s B2C international arm that offers international shoppers goods at
factory prices without a minimum order size
Alibaba’s Top Selling Products
Given that Alibaba is a B2B website, their best-sellers are generally items that can be massproduced and sold wholesale to replenish inventory for companies.
Apparel and electronics are huge. Consistently popular items range from synthetic
bracelets and underwear to Bluetooth music systems.
Private labelers would be wise to focus on products that are small and light to reduce
shipping costs–items that sell for between $15 and $200 are ideal.
A higher price point is risky because such items require higher capital to begin with and
selling lower-valued products is generally untenable because most markets lack the volume to
create a worthwhile revenue.
Selling on Alibaba
While sellers can join for free, basic membership on Alibaba severely limits the number of
products displayed as well as access to promotional tools, rendering it functionally useless to
most companies hoping to expand.
For vendors, then, it is important to examine the market to make sure there is an audience for
said goods.
Alibaba is readily used to export items from China.
This, however, may change. Alibaba has announced an initiative to invite American small
business owners and entrepreneurs to focus on products targeting Chinese consumers.
As it stands, selling on Alibaba can be cost-prohibitive to smaller retailers.
Tmall, the division that targets foreign companies, requires that verified Gold members
provide a security deposit of up to $25,000, pay annual seller fees totaling up to $10,000, and
give Alibaba a 2-5% commission on each sale.
These seller fees are in addition to the 1% charge associated with Alipay, the company’s
Paypal-like payment processor.
Alibaba is an excellent marketing engine for suppliers, but new vendors should keep in mind
that it can take years rise to the top of Alibaba’s search results and account for this expense.
Overcoming the Language Barrier
Language barriers are among the most difficult challenges of global retail and international
trade, but Alibaba has tools to help tackle traditional communications barriers.
Multi-language sites: Alibaba’s 15 different language sites help suppliers connect with
businesses whose preferred language is not English.
Apps to Aid Communication
The AliSuppliers Mobile App, available for Andorid and iOS phones, allows suppliers to
manage their buyer inquires, check new requests for quotations (RFQs), respond to requests
from buyers, and directly chat with buyers using the TradeManager function.
The TradeManager Chat App is an instant messaging/chat service for suppliers and buyers.
Through it, businesses can receive instant notifications when a message is sent to them.
In addition, they can create contacts and search their chat history. This messaging tool is
available for Windows and Mac operating systems, in addition to the AliSuppliers Mobile
App. Currently it is only available in English and Chinese.