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Transforming Business Models

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Transforming Business Models

Through Digital Technologies

Digital technologies are rapidly facilitating both small and medium enterprises (SMEs) and ‘innovation-driven enterprises (IDEs). SMEs rely more on traditional business approaches and their scope is limited to local markets. The potential net revenues of such businesses are relatively easier to forecast and are less risky. Digital applications (or apps) have especially enabled SMEs to structure and manage their businesses and services. Furthermore, social media has also aided SMEs to expand their work by promoting it on various platforms. In contrast, IDEs aim for a business style guided by the pursuit of products or services for regional and global markets. This does not necessarily refer to giant technological discoveries; rather such ventures offer new approaches for various economic activities ranging from the provision of services to the development of innovative products, but the innovation itself is technology-driven. Such innovation demands a consistent investment of time, resources and effort. Given that global markets are the target, the risk involved is also higher than for SMEs. However, exponential growth is more likely in this case. While both SMEs and IDEs contribute to a country’s economy, it is the latter that bring about transformative impact due to wider scope, extended reach and high growth prospects. There is more chance of IDE start-ups turning into ‘unicorns’ (companies valued at $1 billion) as opposed to SME businesses or services. When it comes to Pakistan, the number of such enterprises, particularly SMEs, has soared recently. According to a World Bank report, Pakistan improved its position vis-à-vis ease of doing business from 136 to 108 in 2021 which is reflective of good progress. In 2019, there were approximately 3.2 million SMEs in the country. The figure reached around 5 million by late 2021. The growing number of SMEs is a positive development and must be encouraged.
On the other hand, it is equally important to pay attention to empowering IDEs that are fewer in the country so that their (rather Pakistani) products and services can reach global markets. In the first three quarters of 2021, Pakistani start-ups raised $244 million, which is more than the amount of the previous six years combined. Start-ups such as Bazaar, Airlift and Maqsad have emerged as multi-million dollar enterprises. This shows that there are immense growth opportunities for IDEs, especially in sectors like health, agriculture, climate change, green infrastructure and education, amongst others. On the positive side, the Government of Pakistan has been trying to cultivate a business environment that supports IDEs. From providing tax relief of three years to the regulation of local Venture Capital firms to zero tax on IT freelancers, measures have been taken to reduce existing barriers. There is a vast potential for the IT industry in Pakistan. Last year, Pakistan’s IT sector grew by 47 percent and is expected to reach 75 percent in 2022. In one year, IT exports rose from $2 billion to $3.75 billion. These are expected to rise to $7.5 billion by the end of this year and $9 billion by next year. The government is expecting that IT exports could reach $50 billion over the next few years.
This growth in ICTs has also provided our youth with profuse opportunities to earn by working as freelancers as freelancing is making inroads in Pakistan at a rapid pace which is evident from Payoneer’s Global Gig-Economy Index Q2 2019 wherein Pakistan was the world’s fourth fastest growing freelance market having 47 percent growth in freelance earnings. The digital payment gateway in its ‘Freelancer Income Report 2020’ said most Pakistanis under the age of 35 years have been joining freelance work, which is more than the global average of 70 percent. Enhanced internet access to more than 2,000 cities and towns across Pakistan, a large number of ICT graduates inflowing the workforce, and the government’s efforts to promote freelancing are the key factors behind this growth. Pakistan has risen through the ranks to become the third largest contributor of technical manpower in the world. According to a report published by the International Labour Organization (ILO), Pakistan now ranks third in the world in terms of the amount of technical labour purveyed for online services. Young Pakistanis are getting unprecedented online employment earning a lot through these online jobs. This is resulting in these freelancers bringing foreign exchange to Pakistan, which is another major factor in Pakistan’s record foreign remittances.
On the other hand, the entry of Amazon in Pakistan has further expedited the growth of online business in Pakistan. As per a recent report, Pakistan is now the third largest popular new seller on the Amazon marketplace, after the United States and China, with over 1.2 million registered vendors. It is not problematic to witness that Amazon is the most extensive online marketplace for buyers and vendors. Amazon’s online marketplace is liable for about 39% of all US e-commerce sales/deals. Additionally, an analysis found that Amazon’s online marketplace sold roughly four thousand products each minute to small and medium-sized businesses. These numbers indicate that every vendor and company should think about listing their products/services on Amazon. It is also the best online business in Pakistan. Currently, Amazon does not support the delivery system to Pakistan. It means Amazon delivery in Pakistan is not available yet. However, you can create an Amazon account in Pakistan. You can add your business name to the Amazon sellers list in Pakistan. As you can only sell via Amazon but cannot buy or get your item delivered to Pakistan, this account is called an Amazon Pakistan seller account. Applauding the expansion of Amazon, counting Pakistan to its official sellers’ list, and beginning its functions in the country. This necessary progress will support Pakistan’s economy and extend its GDP evolution.
Amazon Pakistan sellers can now ship their goods and products via the Amazon marketplace. Moreover, Pakistani Amazon sellers can now utilize the 3P model to trade their creations on Amazon. The 3P model permits landlords to trade their products to consumers via a third-party connection instantly. As per a 2019 case study/survey, this Amazon business in Pakistan had over 300 million enthusiastic users, with deals of more than 280 billion dollars. In Pakistan, you can easily set up a drop-shipping shop/flagship store on Amazon and convert it into a thriving experience. While talking about Amazon Services in Pakistan, they are huge on the list. It includes Amazon Shopping, Amazon Web Services, Amazon E-commerce, Amazon Affiliate Marketing, and Amazon Prime Video Pakistan. But there are some specific regulations you ought to follow to begin an Amazon business in Pakistan. It only wants you to specify your business as a particular Pakistan Amazon sellers list with a distinctive individuality. The Amazon official packing labels and invoices will be delivered with the products you trade online and should also carry your business/store name as the vendor. Amazon also wants you to be exceptionally liable in spans of client assistance. So, you have to take orders and procedure returns responsibly, keeping in mind the Amazon guidelines and also your dealer contract with the company.
Young entrepreneurs and SMEs across the country will be able to avail the benefits offered by the platform which will widen and diversify Pakistan’s export basket. This will not only enhance their revenues but will also help the government in improving the macroeconomic outlook of the country. The expansion of the e-commerce industry is important to support the medium and small-sized businesses to help operate profitability with the rising cost of doing business. Pakistan’s e-commerce policy is part of the overall ‘Digital Pakistan’ policy launched, aimed at paving the way for holistic growth of e-commerce in the country by creating an enabling environment in which enterprises have equal opportunities to grow steadily. The major exports of Pakistan that contribute over $28 billion per annum to the national economy include textiles, leather and sports goods, chemicals, carpets and rugs. Pakistan also exports significant quantities of rice, sugar, cotton, fish, fruits and vegetables. According to e-commerce analysis, “Pakistan is the 37th largest market for e-commerce with a revenue of US$5.9 billion in 2021, placing it ahead of Iran and behind Israel.” With an increase of 45%, the Pakistani e-commerce market contributed to the worldwide growth rate of 15% in 2021. Just like in Pakistan, global e-commerce sales are expected to increase over the next years. As new markets are emerging, global growth will continue over the next years. This development will be propelled by East and Southeast Asia with their growing middle class and their lagging offline infrastructure”. With a yearly growth rate of 7% between 2021 and 2025, Pakistan is even expected to outperform the global average of 6%, it further adds. Pakistan adopted an e-commerce policy in 2019 but a lot more is required to do on a privacy statute of general application or national consumer protection, which applies directly to electronic commerce. E-commerce’s success is solely linked to the consumer’s trust and sense of satisfaction which must be ensured on industrial and state levels to give exports a further stride.
Pakistan is the fastest growing freelancing market in the region and the fourth largest in the world which shows its immense potential. With a young generation entering the workforce, it is imperative to foster an environment where technology-driven entrepreneurship is promoted. Hassle-free government policies, reinforced by funding from the private sector, can play an effective role in supporting young entrepreneurs. Pakistani conglomerates should also invest in tech start-ups to help them grow and provide employment platforms. However, awareness must be created among young people to explore IT-related fields. This trend can become more prevalent in universities and schools and nurture an environment where the importance of both entrepreneurship in general, and IDEs in particular, is cultivated in the younger generation. Amazon is one of the amplest e-commerce business organizations on the planet. It is situated in Seattle in Washington, USA. The organization was established as a web-based book shop. However, considering the power of the internet business initiative in this day and generation, it developed its services and activities. Today, it has one of the world’s biggest online marketplaces, which trades in an immense assortment of consumer merchandise and automated items and services.

The writer is a PhD scholar (English Literature). He can be reached at

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