Trends and Observations

Internet is perceived largely , urban use it for entertainment and communication, rather then source of an income Internet appeared to be high in trust and used among the educated class doctors and scientists. However bias towards entertainment was noticeable even amongst persons such as students and also persons in the medium to high socio-economic bracket (monthly income 50k+). Along the communications axis, online communicators appear to carry more weightage than persons in the physical space, as far as trust is concerned.

Among entertainment industry , major use of net is recorded for accessing video and audio , and for keeping in touch wide range of social circle . News is also one of the major online activity.

Online commercial activity was towards payment of bills and banking services, but only amongst a small percentage of users. Direct commerce, such as buying and selling, hardly figured. As far as direct contact with marketers is concerned, the Net (mostly Facebook) ranked second to television in terms of specific advertisement recall, with print media (newspapers) coming in third.

Within online activity, search (Google) and social networking (Facebook) were most frequently reported, with general portals (Yahoo) and video (YouTube) second in terms of popularity, insofar as frequency of access is concerned.

Internet trend is upward as we saw increase in number of users compred with last 5 years. Users are also more comfortable with personal access, at home and/or office, rather than the use of shared points, such as cyber cafes, and more with personal devices such as mobiles and laptops. Affordability also plays a role here, hence fixed line access is found more common than WiFi and cable. Reported bandwidth ranged from 512 kbps to 2 Mbps across the country, at costs between Rs 500-1,000 per month. These figures were sharply divided between regions (provinces).

Duration on internet :

Daily access of 3 hours and more is commonplace, across a spectrum of users from low-income to graduates and post-graduates. There isn't much difference between weekend and workday usage, in terms of online activities. It does seem that some ethnic groups (Punjab, Sindh) consider the Internet more reliable and informative than television.

Within information seeking, news was major, but topics of personal interest and sports is also popular. There is a noticeable gender split, with males seeking out news and sports while women look for healthcare, research/projects and cooking recipes. The two major search resources are Google (maximum) and Yahoo. Aside from text and chat, exchanging photographic material seems very popular. Actually using the capability of self-publishing (posting personal opinions and information via blogs etc) was not reported, compared to relatively passive consumption (ie news and entertainment). Even here, this is more likely to be men than women, insofar as news and sports is concerned, or downloading music/video. The latter is also, not very surprisingly, skewed towards students.

Online commerce is not very extensive, with financial transaction activity being largely banking and bill payment. Such commerce as actually takes place is most often fulfilled through physical cash (cash on delivery), and this can be observed more or less similarly across all demographic groups. However, the possibility of using online commerce to save money seems to be greater amongst lower income reporting groups.

Mobile devices are also used for online access, the penetration of smartphones is increasing according to PTA there are more then 40m mobile phone users and 25m 3g users. 3 g technology has increased ecommerce industry with increase in new customer.

Another concern may be privacy, although awareness seems limited to privacy rights as far as social networking (Facebook) is concerned. The possibility of personal data misuse as a consequence of online transactions through insecure methods does not seem to be well understood, as is evidenced by the fact that some people reported that it is the government's responsibility to regulate online commerce for the purpose.

Respondents seemed to be generally agreed on the need to regulate online content accessibility for the young, but not on what that age limit should be. Perhaps the fact that the value of knowledge accessibility is crucial to build a well-balanced maturity plays some role in recommending younger age limits to accessibility here. Encouragingly, no gender bias is noticed.

Consumer Research

To study the consumer behavior of online shoppers in Pakistan in order to gain insights into their attitudes and preferences, decision-making frame work, attributes for store selection and life styles encouraging online shopping. The target population for this study consists of the urban consumers who are educated and belong to Upper and upper-middle socio-economic classes (SEC A and SEC B) who can be divided into two broad segments, first having ages from 16-25 and second with age 25 years and above. The first stated segment is the major segment and insights about its behavior towards online shopping can provide a sound basis for further research. A substantial size of this segment comprises of students. An effective presence on social media websites is necessary and used as a channel to draw more traffic which is another reason for youth segment for being the majority of consumers. Since this industry is still in its infancy in Pakistan, the innovators and early adopters who are in bulk at this time mostly belong to the description above. This consumer segment is experiencing an increase in spending power which is mostly consumed by purchases of clothing and accessories, food and electronic products such as cameras, cell phones, tablets, computer or computer related stuff. Thus we see a resemblance among these products and the product lines of major online shopping sites.

The second segment consists of working professionals or business men who have sufficient income to purchase products online. Their purchases are less both in frequency and quantity as compared to the former segment.

The rural Pakistani reports that the Internet is important for determining ratings on products and films, but for taking control on the defects, or for critical information like quality of local schools, a physical

visit or authentication is the norm. Significantly, rural E-commerce activities altogether are not among the 5 most common online activities in Pakistan.

Users involved in “buying a product online” account for 6% of all e-commerce activities. 45% of the users realized that shopping is appropriate via internet. Moreover, 33% believed that online store prices are lesser when compared to physical stores. Cash on delivery (71%) was selected by online buyers as mode of payment, while 22% selected Credit cards.

Additionally, statistics by a mobile company, Ansr.io says that Pakistani internet users have crossed 30 million and 15 million use the internet through their mobile phones.

Consumer Research

To study the consumer behaviour of online buyers in Pakistan in order to gain perception about attitudes and preferences, decision making model, factors for store selection and lifestyles boost online shopping.

The target population for this study comprises of the urban customers who are educated and belong to upper and upper – middle socio economic classes (SEC A & SEC B) , who can be divided into two broad segments, first having age ranges from 16-25 and second with age of 25 years and above. The first mentioned segment is the major segment and preferences towards online shopping can give a complete basis for additional research. A significant size of this segment consists of students. An effective existence is important and used as a medium to attract more traffic which is another reason for youth segment for being the majority of customers.

Since this industry is still in its early stage in Pakistan, the innovators and early adopters who are in huge quantity at this point in time belongs to the picture given above. This customer segment is experiencing a major rise in spending power which is usually consumed by purchasing of food, clothes and accessories, electronic products like tablets, cameras, cell phones etc. therefore, a major resemblance among such products and product lines of major online shopping websites.

The second segment comprises of employed customers (professionals or business men) who have adequate income to buy the products online. Their purchases are less both in occurrence and quantity when compared to previous segment.

Methodology

5 detailed oriented and in-depth interviews were conducted and the methodology was to choose a mix of people who are regular online buyers and those who have purchased once or twice in last 1 year and a potential online buyer for online websites.

Interviewing such a combination of interviewees facilitated us in developing the characteristics that leads to purchase (switching behaviour) and aspects valued the most before making a purchase decision by existing online shoppers.

A focus group was also conducted which facilitated in defining the online shopping behaviour in Pakistan and the key attributes that contribute to the switching pattern of consumers. 5 contestants from the recognized segments were asked to be the partakers.

Finally, a questionnaire was modelled on the schematic delivered by qualitative input, after which the researchers had gone through various iterations to finalize the questionnaire.

Findings

The respondents were regular online shoppers who had previous experience of online shopping and had a variety of preferences that they wanted from specific shopping experiences. The respondents basically viewed clothes shopping as a highly complicated and involved purchase.

In situation of online shopping behavior, the respondents purchased products to which they referred to as “standardized’ products which included laptops, cell phones and TVs. The most important reasons that various respondents stated for their online purchases was price economy. A regular online store that the respondent viewed was homeshopping.pk. They identified homeshoping.pk to be the most price-effective when compared to other websites and also to wholesale shops at Saddar. As per the respondent, a certain TV was valued at Rs 38,000 at a nearby shop, while at Saddar it costs Rs 36,000 and at daraz.pk it costs 42,000. The respondent bought the TV from homeshopping.pk at Rs 32,000.

When asked about whether lower prices shaped any doubt or not, the respondent replied that since he had purchased from there earlier, he was satisfied with the service and quality. Where the riskiness of online shopping is concerned, the respondent replied that the cash on delivery feature was involved in moderating that risk. While on the other hand, when asked about other classifications, e.g. garments or shoes, the respondent stated that he would prefer to try them before buying. Nevertheless, when questioned about the probability, whether a software were to be developed which would calculate the exact measurement of the shoe size or the shirt size, then the respondent suggested that he may shift to purchasing these ‘customized’ items online.

The belief statements of some of the respondents are as follows;

1. Price is an important benchmark.

2. Homeshopping.pk is price effective.

3. Homeshopping.pk is even low-priced than Saddar.

4. Daraz.pk is high-priced.

5. Service is also important criterion as well.

6. Homeshopping.pk has a good service.

7. Online shopping is convenient.

8. Cash on delivery is highly important for a purchase

Upon detailed discussion with the interviewee, it was found that price was the most important factor in their decision for selection of a retail channel, and that price and quality did not inversely relate.

The behavioural statements of some of the respondents are as follows;

1. I buy standard products, usually electronics.

2. I bought three cell phones, one television and one laptop.

3. I made all my online purchases from homeshopiping.pk.

4. I would not buy clothes from an online store.

5. I spend 3 to 4 hours on shopping for clothes.

6. I like to try out clothes and feel the fabric before I buy them.

7. If I can somehow get a trial and a good price then I might buy clothes online as well.

8. I confirm the prices from Google, nearby shops and Saddar before I make my purchase online

9. First I select the products I need, and then I do price comparison.

As realized from the behaviour, the interviewees were attracted in a particular category if they decided to make an online purchase. Even after deciding for an online purchase, they would conduct their research so that they’re confirmed about the product requirements. And finally after deciding the price they research on prices and make purchase from wherever they get the best lowest price. ALthough homeshopping.pk gives the convenience the respondents want, the respondents majorly attract towards homeshoipnng.pk is due high discounts.

Competition Analysis

Direct

Homeshopping

This store has physical outlets in Karachi, Lahore, Rawalpindi and Peshawar offering wide category of products ranging from local merchandise to popular international brands and also provides improved customer feedback services. The website gives an interactive section for each product with ready-and-active staff that provides an instant feedback to all queries potential customers. The website receives orders of almost 1000 and more than 15,000 visits per day, among whom majority are returning customers. Homeshopping has its own delivery staff and offering cash on delivery in more than 40 cities in Pakistan. It has a low profile on social networking sites compared to other leading online stores.

Shop Daily

The store does not have much brand variety due to which it loses score but the overall website experience is good. The store is investing in advertising campaigns which suggests that they are going to be here, competing. This online store is owned and run by the owner of other known projects like tohfay.com and Dealsdaily.pk.

Kaymu

Kaymu probably has lot of product categories (from tech gadgets to perfumes) in store but that does not mean it has huge variety of products. The portal does 1,000 transactions daily with an average turnover of Rs1.2 million per day. This website buy or sell all kinds of goods and is working on the similar model of eBay in Pakistan but the transactions take place through Kaymu.

Techcity

The personal experiences and customer reviews suggest that the store has poor return facilities for clothing category with not-so responsible product dispatch team however techcity.pk is a major tech store with wide product variety and team experience of 12 years.

Symbios

They offer a wide range of tech products and discount deals known as “Jadoo Offer” everyday. This online store started-up as a basement car garage which turned into serious business. Symbios needs improve little in the quality of information for products. Symbios attracts over 30,000 visitors daily. Of these, about 1% or 300 people place orders and 600 products are sold in a day on average. It has a good presence on online social networks which suggests good things about the store.

Shophive

The fact that Shophive was refurbished recently which is one of the major reasons this site secured the third spot on our list. A lot of Pakistani e-shoppers are attracted with its new optimized web design and its amazing discount/deal section. The instalment plan is offered to its customers making it easy for them to pay for the more expensive items. However, this option is only available for the Lahore customers. Shophive is quite active on its social media pages by giving timely reply to the queries of their customers, however most of their posts are promotional.