TCS braces for impact as Pakistan moves online
As the country embraces the impact of a growing e-commerce market and the China-Pakistan Economic Corridor (CPEC), logistics and courier companies are also looking to cash in on the opportunity.
Pakistan is set to see its biggest infrastructure development project in the shape of CPEC that would upgrade its road network as well as add much-needed electricity to the national grid. On the other hand, the arrival of latest mobile broadband technology and a young, tech-hungry population would only enable e-commerce players to grow as well.
Online shopping making its way into rural area
TCS Holdings is also one such player aiming to tap the growing segment and take advantage.
Pakistan is experiencing a boom in e-commerce so the market is responding to any player that is entering, said TCS Holdings (Pvt) Ltd President and CEO M.A. Mannan. However, he was quick to caution that while the segment is growing, unsatisfactory services would not be tolerated since Pakistan had become a mature market.
“Today’s customer is much more aware than he was ever before. Once a customer gets a bad product or service he will never go back (to that company),” Mannan told The Express Tribune in an interview.
Since it is a learning curve, companies that learn from mistakes and improve their services will grow, said Mannan, a graduate of the Institute of Business Administration (IBA) who has previously served in local and international banks at top positions.
“My own sense is that some players will not be able to survive and, going forward, we will see more of that.”
TCS, which was founded in 1983, employs about 12,000 people, and has been among the leading logistics and courier companies in Pakistan.
But as its business grew, its diversification increased as well.
The company has also been offering services to small and big e-commerce players through its ECOM Solutions, one of its core corporate businesses that caters to the needs of e-retailers who want a quick flow of goods.
“This is the fastest growing business segment in our overall operations and it is for sure doubling every year.”
Two years ago, TCS also launched its own web-based retail platform, Yayvo.com.
Although owned by TCS, it operates independently with a Chinese wall, separating its business from the rest of the operations.
Mannan, who joined TCS about three and a half years ago, believes Yayvo has provided an important platform to reach a fast growing market segment that prefers to shop online.
E-commerce and new trends
“The e-commerce revolution is already happening and it will only gain momentum in Pakistan.
“I think we should not be afraid but understand that this is a better way of doing business as it brings down costs and improves service quality,” he said.
With real estate prices and rent increasing each year, it makes sense for businesses to move their merchandise to sell online.
Retailers’ growth has always been organic and used to take time to reach customers. But now one can reach a huge population of over 200 million people from just one e-commerce platform, eliminating the need to have multiple outlets across different cities.
Size of the market and growth
Mannan says it is too difficult to predict the growth rate of e-commerce market.
Some say the market may grow 15-25% while others say it will grow over 50%. The current size of the e-commerce market is not even 0.05% of the total retail market of Pakistan so the growth is nothing compared to what it would be in the coming years and we need to move away from the statistics, he said.
“All we can think about right now is that the growth would be faster and bigger.”
TCS market share and its traditional business
Since there is no authentic market data, Mannan believes it is better not to comment on the market share of TCS in Pakistan.
However, with over 900 retail outlets and coverage in more than 300 cities, TCS’s reach is huge.
You can buy anything online in China, even a jumbo jet
“Our annual growth rate is over 15% and I can guarantee you that there has never been a month in the last 15 years when TCS has not grown despite all the political and economic challenges the country faced during this time,” he commented.
CPEC and new investments in the sector
Like other sectors, logistic companies are also preparing for CPEC.
“CPEC is a logistic project so it will definitely create a positive impact on the transport industry. Those companies that are not ready should get ready for this mega project,” said Mannan.