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The digital ecosystem in Pakistan

The digital landscape is constantly expanding globally. Everyday it is transforming and impacting our lives in new and different ways. With an estimated internet user base of over 35 million (at least three times the population of Sweden!) and more than 40 million people nationwide having a smartphone (greater than the total population of Canada!) – the digital age has influenced the average Pakistani tremendously.

On the demographic front, over 40 per cent of Pakistan’s population of 200 million people constitutes millennials. This sizeable aspiring, ambitious and aware segment has been a catalyst in the evolution of the country’s digital eco-system. Technology has enabled them to connect, purchase and engage in ways like never before – creating a powerful digital narrative, not to mention extensive marketing, promotion and commercial opportunities.

The industry’s digital revenue in absolute terms is still comparatively small (USD $50 million) but growing at a YOY rate of approximately 20 per cent – which makes it the second fastest growing touch point in the country after OOH. This recent surge in expenditures has allowed established advertisers to explorer beyond the usual social media dynamics and produce dedicated ‘content’ for online mediums. In this transition, Youtube and other popular local streaming websites such as tune.pk and tapmad have become lead contenders – all of them witnessing significant online traffic in a digital market, where 40 per cent of all the data consumed online is video driven.

Advertisers keeping abreast with the fan following for social media and streaming content have also shifted focus towards developing exclusive OLVs. This phenomenon has led to the emergence of local social media celebrities and Vlogers – some of them making it ‘big’ through endorsement opportunities with leading global FMCG brands. The digital ecosystem has become a blessing for marketers to engage with the largest segment of the population, efficiently and effectively, through previously more optimized and targeted investments.

Another aspect of the digital ecosystem that has taken the country by storm is the boom of e-commerce and digital entrepreneurship. The total value of e-commerce is expected to cross the USD $10 billion mark by 2020. The concept of purchasing goods and services online has been welcomed across Pakistan, with 65 per cent of the sales being generated from smaller cities and semi-urban areas of the country.

This has captured the interest of reputable multinational companies like Rocket Internet, Careem, Uber, Foodpanda, Alibaba, etc. who are making huge investments in the economic arena. The digital landscape has upgraded lifestyles – whether it’s ordering in, commuting, sharing or buying – all is at the click of a button now.

The success of the lead players in the e-commerce segment has also given rise to a robust breed of budding digital entrepreneurs, who aspire to launch online products, services and apps that are in direct competition to established online brands. They have a macro advantage in terms of better understanding of the local consumer market, access to a large pool of qualified IT professionals, and lower operational costs. These online wars are fostering both healthy competition and end consumer benefits in the shaping up of the digital eco-system of the country.

To cater to the growing digital appetite and facilitate online inclusivity, a parallel economy has come into existence in Pakistan. With lead online financial networks like PayPal unwilling to enter the market, the country has created its own mobile financial payments solutions. It has a large and rapidly growing branchless banking system that is supported by lead telecom and banking players. This has made online transactions more credible and easier. Furthermore, established local logistic companies have ventured in to the digital arena, making the flow of goods and services smoother.

Undoubtedly, the digital eco-system in Pakistan is buzzing. The country’s increased use of internet, high tele-density, large youth population, strong infrastructure (large scale implementation of 3G/4G, logistical footprint, Online Financial Service Providers) and supportive government initiatives are the fundamental ingredients behind the phenomenal growth of the digital landscape.

However, to achieve more and better, the country needs to direct and consolidate these energies and efforts collaboratively and there is an urgent need for regulatory framework to be set in place. Towards this need, the Government announced the Digital Pakistan Policy in April 2017 – albeit a delayed step in the right direction. With this initiative, the digital eco-system is expected to improve and evolve further by attracting the attention of players previously averse or nervous due to the lack of systems and SOPs.
To conclude, it can be safely said that good times are definitely ahead for the vibrant digital landscape in Pakistan!

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