Online shopping is thriving worldwide because people now prefer shopping from the comfort of their own homes. According to a survey conducted by Statista, 41% of the global internet users have shopped online at least once. With such encouraging numbers, a large chunk of existing and emerging startups are capitalizing on the situation by aiming to build online shopping businesses. Now an unlikely name is arising in the online shopping conversation. We have all heard of TCS and used their services at some point. So what plan does a courier service have to play their part in the growth of online shopping in Pakistan? We recently spoke with Mr. Qasim Awan, Director at TCS Holdings (Pvt) Ltd, to find out first-hand how they hope to play a part in Pakistan’s booming e-commerce setup.
What are the trends changing for online shopping in Pakistan?
Well, if we look at the market we can refer to an industry study, carried out by Tameer Bank, the value of the e-commerce industry in Pakistan will be $5 billion by 2020, up from an estimated $100 million in 2015. With the industry forecasted to grow 5000% in five years it bodes well for service providers to the online shopping space. The expansion of internet access in Pakistan, owing to the rise of 3G and 4G, has been largely responsible for this trend. Once taken not seriously by Pakistani executives, it now plays a central role in overall strategy for banks and businesses across the country.
How has e-commerce shaken up traditional business models?
From students selling stuff on Facebook and multinational startup conglomerates, e-commerce has become the buzzword across a wide cross section of industries. Fashion designers want to expand their customer base while food portals lead the migration of customers towards online ordering and electronics retailers compete ferociously in a price war to find customers across the nation. In a rapidly developing and fast evolving industry, logistics service providers have to evolve in order to embrace the challenges and opportunities presented by online shopping.
How is TCS supporting the growth of e-commerce in Pakistan?
Although various payments methods such as credit cards and online banking are available, the vast majority of online shoppers choose cash-on-delivery as their payments method. For TCS this leads to an interesting dichotomy because in spite of being a B2B service it also represents a cash based earning for themselves and the online retailer (who is a customer). Flexibility hence has to be shown in terms of process design and operational maneuvering as there are two functions we perform for our E-Retailer clients: deliveries and cash management.
How has TCS evolved to meet the changing needs of the market?
Courier companies worldwide have traditionally followed a B2B-centric model based on bulk pickups from offices and deliveries to other offices. With the advent of online shopping the organizational re-orientation towards e-commerce has led to the design of B2C-centric models whereby the bulk of deliveries take place to residences. This has resulted in less profit per delivery but more profit overall after volumes are captured. As such the nascent field of e-commerce logistics has also been called “consumer logistics” owing to its demand of customizing each delivery to meet the wishes of customers. TCS will hence continuously strive to innovate and embrace technology in terms of its methodology in servicing the online shopping industry.
How do you see digital payment methods evolving?
Another industry seeking to provide services to e-retailers is the payments industry. Banks, telecom, and financial tech firms are all scrambling for innovation in an effort to digitalize the payments process. This is a process that might benefit the courier industry owing to greater commitment from buyers. In the end, however, decisions about what payments method to use will rest with end customers because unless they feel secure with digital payments gateways they are unlikely to shift away from cash-on-delivery. One of the considerations is security – how much privacy are you willing to give up for a Shalwar Kameez? And, even more importantly, how safe is your financial transaction?
What advantages does TCS have in the e-commerce industry?
The question now remains about where third party logistics providers fit into this amended paradigm and the answer is everywhere. It is the chief source of competitive advantage for online retailers and plays a critical part in the construction of their customer experience! The clarity of advantage TCS has when it comes to servicing its clients is a well laid out network that bodes well for movement of goods bought online, both within Pakistan and through cross border e-commerce activity. While operating a tight but flexible supply chain to service e-retailers throughout the country it is our intention to maximize customer satisfaction through the delivery of a seamless crafted online shopping experience for those who shop online.