Amazon is looking to take on Alibaba and enter the Pakistani market by acquiring more stake in a local online retailer.
Pakistan’s e-commerce market is on the rise and increasing exponentially. According to a report by Pakistan Telecommunication Authority (PTA), the online retail sector will cross the $1 billion mark by 2020.
Thanks to this rise in the online shopping trend, global online retail market leaders are keen on investing in the country’s e-commerce market.
Alibaba, China’s largest e-commerce platform, is reportedly looking to reach an agreement for the acquisition of Daraz.pk as well. Alibaba will be facing competition from the popular e-commerce platform Amazon to establish a firm foothold in the country’s growing IT and e-commerce market. Amazon is planning to invest in Pakistani e-commerce market with an aim to secure some share of the rapidly growing market.
The entrepreneur Adam Ghaznavi, who led Rocket Internet’s Easy Taxi and Kaymu.pk, told;
The China Pakistan Economic Corridor is also bringing in a lot of Chinese investment to the country, which will attract investors. Both Alibaba and Amazon will be interested in Pakistan, which has 70% mobile phone penetration in its 220 million population.
Amazon in Pakistan
Amazon doesn’t operate directly in Pakistan, however, it does own a fair stake of 33% in Clicky.pk through its acquisition of Souq, a Dubai-based online retailer. Clicky.pk competes with Daraz and other online stores in the fashion and home decoration sector.
Clicky.pk raised $1 million by selling its 33% stake to Souq in 2016. Amazon later acquired Souq for a reported amount of $580 million. The deal between Souq and Clicky was made public just now.
According to some sources, Amazon is looking to further increase its stake in Clicky.pk in order to lead the competition in the region. If the deal between Alibaba and Daraz goes through, Amazon and Alibaba will enter a direct competition. The source told;
These three geographical locations — India, Dubai, and Pakistan — makes sense for Amazon to scale up. Amazon will make entry into multiple Asian countries, a new strategy to increase its volume, optimize its sourcing and reduce single-country dependence for revenue flow.
Alibaba recently stepped up its efforts to bring Pakistani exporters onboard for its B2B Portal.
Amazon’s entry in Pakistan, directly or indirectly, will surely prove beneficial for country’s IT and online retail market.
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