Why brands like Unilever are redoubling their attention to ecommerce in Pakistan

Online shopping for retail is a dominant trend prevalent in Asia-Pacific as compared to the rest of the world.
Published February 3, 2018

There is no stemming the digital tide. The last two years saw digital advertising revenues overtake TV ad spends, with revenues for the former surpassing the latter as well.

Ride this bus or get thrown under: the cultural and commercial imperative to go live and be connected has engulfed commerce. Businesses both big and small, whether e-tailors or brick and mortar, have done well to heed this.

As digitisation continues its onward march in Pakistan, it is worth considering how big brands are leveraging ecommerce, and its concomitant channels of digital marketing, to bolster brand presence and generate revenue.

On the marketplace front, Daraz has emerged a key portal, housing brands both humble and huge, offering them a medium to optimise e-commerce prospects and drive conversions.

Unilever and Daraz on their mutual embrace of ecommerce

Unilever launched Pakistan’s first FMCG ecommerce solution with Daraz back in 2014. At that time, ecommerce was merely in gestation phase. Four years later, Pakistani ecommerce has come of age and stands on firm ground. It is still young though, much like the predominating demographic it serves in Pakistan.

With 30 million active internet users in Pakistan, brands are redoubling their attention to ecommerce.

Daraz Account Manager, Maheen Yousuf, who has worked closely with brands in the FMCG space, insists that “major players like Unilever recognise that ecommerce is a future-proof investment.”

“If businesses do not begin to create an online presence for themselves today then they run the risk of being left behind in a highly competitive digitising landscape," says Assistant Manager Ecommerce at Unilever Nauman Lakhani. "As consumers place higher value on convenience and accessibility against the backdrop of busier and accelerated lifestyles, they’re turning to online shopping."

Which categories have the most potential for digital success?

Nielsen’s research about digital shopping identified two barriers and two enablers that help identify categories that are well-positioned for ecommerce success.

Stock-up categories like personal care and household products are prime inventory, while immediate use items like fresh and frozen foods, condiments and beverages will be slower in adoption.

Data from Daraz bears this out, with Unilever’s highest-sellers for 2017 being the 1 kg pouch of Surf Excel washing powder, and Lux Peach and Cream trio pack.

Online grocery sales have been boosted by continued progress in mobile adoption and broadband penetration, particularly in developing countries like Pakistan. Zooming out and speaking of the broader region, Asia-Pacific consistently ranks above the global average for adoption of online retailing options.

Ordering online for home delivery is the most commonly preferred retailing option in the region.

Why is online shopping for FMCGs so prevalent in Asia-Pacific compared to the rest of the world?

A few factors come into play. First, Pakistan and its neighbours to the north, east and beyond comprise a rapidly urbanising region, with a high population density making the home delivery model economically scalable. Paired with low labour costs, one has the necessary ingredients for an ecommerce boom in place.

Additionally, growing smartphone ownership and usage have created significant mobile commerce opportunities.

Willingness to use digital retailing options in the future is highest in the developing markets in the Asia-Pacific (60% on average), followed by Latin America (60%) and Africa/Middle East regions (59%). It falls behind in Europe (45%) and North America (52%).

In the consumer packaged goods industry, change has been more evolutionary than revolutionary, but digital is redefining what it means to “go” shopping. And Daraz is on the frontline of this evolution.

Shoppers are getting more and more accustomed to the benefits of digital in other retail categories and are now beginning to have the same expectations when it comes to grocery as well. Savvy brands and retailers like Unilever and Daraz, respectively, are winning by leveraging technology to enhance the shopping experience and satisfy consumers’ evolving needs.

How is the relationship between offline and online shaping up?

This is an aspect of ecommerce that is often glossed over and misunderstood. In Nouman’s words, “Some businesses worry that they could lose the importance of their physical channels, but in reality having an online presence adds to revenue instead of cannibalising already existing business channels.”

Indeed, the Nielsen study corroborates this claim, claiming that a ‘bricks versus clicks’ approach is not a relevant paradigm anymore. Bricks-and-clicks is the current and future retail reality.

And with an established ecommerce platform like Daraz available to the likes of major multinationals like Unilever, the clicks are here to stay.


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