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Pakistan, the Next Frontier for Entrepreneurs and Investors

Adam Dawood
Adam Dawood
2:00 pm on Apr 23, 2013

Adam Dawood is the founding partner of DYL Ventures, a Pakistan-centric internet consultancy firm. One of the first employees of Daraz.pk and its product manager for over six months, Adam has now returned to the family business, DYL Motorcycles, and is looking to the future in both the motorcycle and e-commerce industry. You can find him on Twitter as @adamdawood.

Pakistan ecommerce startups

A stylish newcomer: see the startup e-commerce list below.


The internet industry in Pakistan is currently at an extremely exciting point, and the outlook for local entrepreneurs and venture capitalists is strong in the mid to long run. Being the sixth largest country in the world in terms of population, Pakistan has an ever-expanding internet base which currently stands at 22 million users, with eight million now on Facebook.

With such a wide array of currently undeveloped markets to compete in, the need for online stores will only increase over the course of time. When one further considers the high cost of establishing a traditional brick-and-mortar store, one realizes the advantages online entrepreneurs are privy to.

The Internet industry dynamics have also changed quite dramatically in recent times with 2012 being a possible turning point for rapid growth. As a result of heavy investment in the arena by three major players – the largest courier company in Pakistan, a major retail outlet, and one of the largest venture builders globally – a string of competitors have started to emerge. More on those later.

Early days

Building internet businesses has traditionally not come easily to Pakistan. Our first e-commerce venture began in 2001 with the establishment of Beliscity.pk by Abid Beli. Although initially started as an information website for mobiles and computers, it soon turned into an e-commerce store as a result of its growing popularity.

You might then expect this venture to have turned out a success story, with Beliscity ending up being the equivalent to Amazon in Pakistan. Unfortunately this was not the case. Owing to many complications and troubles, not only was Beliscity forced to changed its name to Gulf Dealz, it also fell into obscurity competing with countless other players in the online retail arena.

(See: Meet Plan9, Pakistan’s First Technology Startup Incubator)
Then we have arguably Pakistan’s greatest internet success story, Rozee.pk. Founded in 2007 by Monis Rahman as an add-on to his main business, Rozee has grown to become Pakistan’s premier portal for jobs. This journey was also not an easy one at all. When Monis was trying to raise funds through foreign investors in the second half of 2007, Pakistan was in the news almost daily with images of the bombing due to Benazir Bhutto’s arrival, and her subsequent assassination.

3 hot e-commerce startups to look out for in Pakistan

Those, however, were just the early days and the environment seems much more conducive to starting e-commerce ventures now. 2012, I believe, will go on record as a landmark year for internet businesses in the nation. The year saw the launch of three very different and important companies taking off with their own e-commerce portals:

  • TCS Connect is the online portal of TCS Couriers, Pakistan’s most reliable and wide-reaching logistics company. In May 2012, TCS launched its online shopping portal, TCS Connect, which has products like computers, mobile phones, home and kitchen appliances, and even automobile accessories.
  • Labels eStore is the online store for Pakistan’s largest high-end fashion outlets. With its product lines covering the biggest fashion designers in Pakistan, it targets high-end consumers in the local market and the Pakistani diaspora across the world.
  • Daraz.pk represents the fashion vertical of the global venture developers, Rocket Internet. The company did not enter into our local online market arena at the behest of Pakistani entrepreneurs who sought funding, but rather as a ‘top-down’ decision by Oliver Samwer to capture the developing Pakistani market in the long-term.

The establishment and subsequent success of these and other businesses have led to a greater focus on e-commerce sites. Whether they be other clothing brands expanding their businesses online, logistics companies either starting online stores themselves or providing tools and consultancy for brick-and-mortar retail owners to start a digital side to their existing businesses, or young entrepreneurs themselves wanting to get into this nascent business – whatever the case, online stores are here to stay in Pakistan and will only attain a larger customer base going forward.

The success of Rocket Internet’s Daraz has also made other venture capital firms take notice and start making initial contact with local players in the industry to fund entrepreneurs.

Future outlook, untapped space

With this hive of activity, the future for Pakistan’s e-commerce and internet industry has a positive outlook. Local entrepreneurs should seize this opportunity to capitalise on the open market space. The diagram below illustrates the vast amount of untouched market space, ready and waiting to be capitalized on. Being a strong first-mover will undoubtedly be an advantage for entrepreneurs and investors alike:

Pakistan's Internet Industry 2013

Disclosure: As mentioned above, Adam was one of the first employees of Daraz.pk and its former product manager for over six months. Please see our ethics statement for further information

(Editing by Steven Millward and Sara Sultan)


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Have Your Say
  • http://uth-oye.com Brand Manager of Uth Oye

    Reports like these usually cost a bundle. We should be thankful to Adam for giving us a free insight into the untapped markets within Pakistan.

  • Azra Sultan

    A very informative report on the state of the net in Pakistan. Certainly holds promise for our e-commerce. With the state of security and traffic hassles, a lot of us could easily get hooked to shopping on the net. All e-commerce needs to become popular would be to put out user friendly and secure sites with good home delivery services. Perhaps payments may also be collected on deliveries to eliminate concerns about net security to get the ball rolling.

  • Azra Sultan

    A very well done piece, Adam. Easy read for the lay person and truly educational about the untapped potential for e-commerce in Pakistan.
    With the current state of security and traffic hassle in our cities, one could easily get hooked to shopping on the net. Certainly a great place to display wares for quick home deliveries to start with!

  • http://www.dealtoday.pk Shahrukh Chaudhary

    I am surprised at this report, coming from someone who is part of the industry and has so little knowledge on the subject.

  • Gonemen

    It’s a good overview. What are you trying to say Shahrukh? Could you elaborate? Give us more knowledge if you will.

  • http://www.planet40.com/ Moin Ramiz

    it means we should invest in Internet in coming days.

  • Raja Changez Sultan

    an eye opener for me. Had no idea Pakistan represented such a huge market! wonderfully done!!!

  • harpreet

    A very well written article by Adam, enumerating the journey and clearly pointing out to opportunities as they exist in the internet space in pakistan !!

    As a country , its a large market , waiting to be tapped.

    Funds are an issue but only from foreign investors , the domestic capital can bridge the gap in the interim , maybe the govt itself can step in and provide seed capital !!

  • http://www.dyl-ventures.com Adam

    BM @ Oth-Oye – We try and make as much data available as freely as possible, we like many other just want to see Pakistan succeed in the technology sector.

    Thank you Azra and Changez for your support!

    Moin, the best thing about investing in the internet and ecommerce sphere is that the startup costs are incredibly low. For as little as $5 a month you can have a fully running ecommerce website (you will need products however and a marketing strategy)

    Shahrukh please do elaborate on your comments further. We can all only grow by learning from each other.

  • Murtaza J. Bhatti

    Thanks for sharing. Indeed a very good and informative article Mr. Dawood. There is no doubt about the rise in internet and mobile platform proliferation in Pakistan, a huge potential untapped market. I would like to add some. Firstly, looking at the upwards trends, fuelled by fast growth in internet access and smart phones, the biggest opportunity here lies for Venture Capitalists and Angels with a mid to long-term payback perspective. Especially, the local investors and businesses; they have to realize that there are better opportunities other than importing used cars or stocking sugar. Secondly, the biggest challenge that we face being a start-up at http://www.hotinarea.com, is lack of mentorship and counselling to the newbies. Though there are small organizations like TiE, Plan-9 [only initiative of Shabaz Sharif I loved, despite being a PTI supporter 😉 ] working in that direction, but certainly not enough, we need more LOCALIZED and open forums, to help and encourage.

  • http://www.thetechnologycafe.com Samir Saleem

    So I am an entrepreneur from Pakistan and lucky to be incubated at Plan9, Pakistan’s first technology incubator funded by the PITB, Google Pakistan and P@SHA. What adam has written is remarkable and commendable but there are a certain points I would like to discuss about the market. E-commerce is definitely going to be big but companies like mine (Social media and ROI analytics tools provider) are also needed to be nurtured.
    If e-commerce and success on online industry is to be measured, then you need people and tools to measure ROI and KPI’s as well. That analytics industry will help make brands make better decisions for e-commerce and hence taking that few are only going into this vertical and people like me really would need help to get boosted.
    All in all a country like Pakistan’s needs to be nurtured around the VC ecosystem.
    I could be reached out on samir@hybridsignals.com for more questions etc.

  • Ghaffar

    Is this a thoroughly worked out research or an educated guess?? I dont think blogging is saturated in Pakistan, at least.. similarly i have reservations over putting Retail, “local discovery”, Deals and Auto in one category..it can true for big cities like Karachi and Islamabad but not for whole Pakistan..
    overall a good effort and a good initiative.. I appreciate the effort !!!

  • http://gameventures.com Zaki Mahomed

    Oh, very cool. I’d rank the lack of 3.5/4G (or heck, even 3G) as the biggest obstacle or startups in Pakistan. The govt just can’t get its act together and let the operators do what they would do (or, if they won’t, sell spectrum to someone else who will).

  • Basit

    Very interesting read. I have got a glimpse now of best websites in Pakistan for each and every niche. Just one thing I want to share that German originator company of Rocket Internet of daraz.pk has now shared another e-commerce website in Pakistan http://www.azmalo.pk which is a sign that e-commerce industry of Pakistan would see some very good players in near future.

  • Anum Saeed

    Agreed. Must have attended that workshop. Wondering how could I’ve missed that. Retail industry in Pakistan is facing a lot of challenges. They are the most underserved sector of Pakistan’s commerce industry. Naive to be exploit technology for their business purposes. I’ve read interviews of mobile phone retailers of Hafeez Center and they have no idea how to advertise their business. Here is one of the interviews that I read:

    [http://towntawks.com/blog/2013/08/al-fareed-mobiles-township-lahore-phone-prices/][1]

    In which a retailer of Lahore clearly said that they don’t advertise because of a lot of manual efforts involved. E commerce websites are good but brick and mortar shops are here to stay for quite a long term. and they aren’t going any where for various product categories. So a solution has to be there for them. in this context, towntawks, an emerging startup seems to be quite a potential venture to drive retailing to new dimensions. Besides, I’ve also read hubspot blog in which they formulated that 59% of SMBs think doing business in today’s age is more complex than before because of evolution of technologies.

  • http://lootlo.pk/ Khurram – Lootlo.pk

    Very nice article! I would like to thank you for the great effort you have made in writing this article. I am hoping to add our website in this article :)

    Cheers !