Amazon Comes To Pakistan

Amazon.com, one of the largest e-commerce retailers in the world, added Pakistan to their sellers list last week. This is a major development as for any economy that is aspiring to grow, there are two key verticals that are relatively easy to initiate from an export perspective: Services (freelancers, software companies etc) and goods – (exports of products to international markets); Amazon falls into the latter category.

Amazon has a gross merchandise volume (GMV) of over $450 billion, which is almost twice that of Pakistan’s GDP, and several companies have registered four to five billion dollars in sales at Amazon. For context, Pakistan’s IT exports amount to less than two billion dollars. In contrast, India’s exports are valued at two billion dollars per annum through approximately 70,000 unique sellers; anywhere between 750,000 and one million people are deriving value from these exports be they direct employees, premises rentals, transporters, small services providers for whom these 70,000 businesses are customers.

Allowing Pakistani sellers to join Amazon’s network was not a simple task by any means. The process began when the First National E-commerce Policy was approved in 2019, by virtue of which the National e-commerce Council was formed, which reported directly to the Prime Minister about developments in Pakistan’s e-commerce landscape.

During one of the consultative sessions that took place in Islamabad in December 2019, Aisha Moriani, Joint Secretary for the Ministry of Commerce, and Badar Khushnood, Member NeCC (National E-commerce Council) and Co-founder, Fishry.com, decided to take it upon themselves to try and initiate the ‘Amazon connection’. The Pakistan Consulate in Los Angeles was engaged due to its proximity to Seattle (where Amazon’s headquarters are located) and a search began for experienced individuals of Pakistani origin to facilitate the process.

As a result of this search, Omer Gajial was identified. Gajial has experience with major global corporations and more importantly, he spent almost five years at Amazon in senior management roles, and helped kick off conversations with between Amazon and the Pakistan Consulate and the team dedicated to this task. Thus, Amazon decided to allow a one year trial for 30-40 Pakistani companies.

“This is a great milestone for public-private joint efforts with a laser-sharp focus on e-commerce. Amazon's addition of Pakistan in their sellers’ list will go a long way in growing Pakistan's small-packet micro-exports by SMEs, women entrepreneurs and start-ups. Sellers and exporters now need to add a B2B2C element to their business models and sharpen their skills for online selling with a very data-driven scientific approach,” opines Khushnood.

Meanwhile, the Adviser to Prime Minister on Commerce and Investment, Razak Dawood, says, “The Ministry of Commerce will continue discussions in Focus Groups for Amazon which will include sellers, logistic companies, various ministries and the State Bank of Pakistan to further guide Pakistan’s business community with regard to how to make best use of this opportunity. In order to reap the full benefits, a lot of hard work has to be done in training, quality assurance, improvement in logistics, payment systems, customer relationship management, etc. I encourage young entrepreneurs to train themselves in this regard and strive for continuous product improvement as a long-term continuous endeavour.”

The registration process is simple and can be completed within minutes; however, it is advised that all sellers (businesses as well as individuals) intending to register, sign up for Amazon Seller University courses first to familiarise themselves and their respective teams about the processes and quality control regulations that they must adhere to. A second option would be to partner with companies that have the requisite expertise.

Payments for all sales taking place on the Amazon platform will be sent directly to designated Pakistani bank accounts listed at the time of registration and these will qualify as export based earnings for those businesses (and attract the relevant tax incentives where applicable).

Unfortunately, only the seller side of the Amazon Marketplace is currently open to Pakistan and not the buyer side. So businesses will be able to export from Pakistan, but individual customer based imports are not yet available.

Now that these gates are about open, it is up to our industrialists and business owners to meet the standards and benchmarks set by Amazon.

Imtiaz Noor heads OrangeFox, a marketing technology company focused on making digital businesses more efficient. imtiaz@orangefox.io