The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has urged the PTI government to pursue a digital market policy to help streamline online transactions in the post-COVID economy. Central Chairman Sohail A. Sheikh and Chief Coordinator Ijaz Khokhar put forward the request at a PRGMEA meeting on Sunday.
The PRGMEA made the request after consulting with other stakeholders in order to better facilitate business to business (B2B) and business to customer (B2C) activities which are becoming more and more digitized ever since the coronavirus pandemic has forced the world to rethink how business is done. The association emphasized that having a digital market policy is vital for being competitive in international markets.
“The coronavirus crisis has accelerated the uptake of digital solutions, tools and services and we must develop a digital market policy to keep up with the times,” said Sheikh.
This is even more important now that Pakistan is once again becoming a major hub for garments manufacturing, with foreign companies bringing huge order to the country. Despite having a relatively strong industry, Pakistan ranks only 39th in the world in ecommerce revenue as per Statista.
The PRGMEA Chairman said that estimated e-commerce sales value, including B2B and B2C sales, makes up 30 percent of the global GDP. Similarly, a World Bank report noted that B2C ecommerce transactions rose from $1.4 trillion in 2014 to $2.3 trillion in 2017, and the figures are projected to increase to $4.88 trillion by 2021. According to MarketWatch, the ecommerce penetration rates are forecasted to increase from 15% globally in 2020 to 25% by 2025. With further advancements in technology such as AR for trying on clothes or seeing how furniture would look in your home, as well as easy marketing tools using Facebook, Instagram, etc. the market seems ready to explode in the coming years.
Therefore, the need for a clear and effective digital market policy has never been more important. As it stands, the current framework for B2C ecommerce exports limits consignments to $5,000. An e-form must be signed to clear transactions higher than $5,000.
“Poor trade facilitation and logistics will have serious effects on the economy in our new world. We need to enhance the digital marketing activities because all physical exhibitions have been cancelled so the only marketing method left now is the digital mode. All our competitors in the region are aggressively capturing the market through the internet,” said PRGMEA Chief Coordinator Ijaz Khokhar.
He noted that the ecommerce industry had a growth rate 4 times greater than the world economy, however hurdles such as administrative policies and logistics are limiting international ecommerce transactions.
“Major online companies have increased their business. Again, we request the government to interact with the concerned stakeholders to urgently form policies in this regard,” said the PRGMEA chairman, repeating the importance of a digital market policy while winding up the meeting. He said that the buying trends all over the world are changing with an increasing trend towards online shopping.