E-Commerce: IT-intensive logistics provider sees room to expand

70% of e-commerce is based on cash in China and Pakistan has a similar trend where most of the online shopping is done in cash.


KARACHI:There is every reason for Imran Baxamoosa to think big about his business. A few years ago, he along with few other like-minded individuals started a company that helps connect customers with vendors like Liberty Books.

Now as people spend more time online – thanks to spreading mobile phone coverage – he sees previously unimaginable opportunities.

“It took a couple of years for the buyers to use e-commerce,” says Baxamoosa, CEO of BlueEx. “Pakistan is still in the transitional phase. So this online shopping trend will set in slowly.”

Similarities 70%

of e-commerce is based on cash in china and pakistan has a similar trend where most of the online shopping is done in cash.

BlueEx, an IT-intensive logistics provider, took inspiration from the food delivery model. “We improvised on that, helping sellers like a clothing vendor from Zamzama to reach a broader clientele in another city,” says Baxamoosa.

A company that started with just four entrepreneurs, BlueEx now employs 500 people, most of them associated with operations side of the business.

Improvising on the peculiarities of the domestic market has been a key for the company, he says. “For us, e-commerce has a broad meaning. It’s a transaction that involves online booking, telephone orders and cash-on-delivery.”

But anyone having the slightest idea of how the logistics and distribution business works, would know that controlling costs could be a particular challenge, especially when products have to be moved around the country.

While some large logistics companies have finances to support warehouses at strategic locations like airports, BlueEx and some others are relying on IT solutions to keep the cost down.

Estimate $25m

to $35m, is the range between which thecombined sales of all major players fall

“It’s a mix of call centre, IT infrastructure and in-house solutions that help us cut the cost,” Baxamoosa says. “For instance, the vendor doesn’t need to call us to tell where the product has to be delivered. As soon as people provide the input, the system does the calculation.”

The company does keep inventories, spreading them over different stations, depending on the nature of the product.

Baxamoosa says the most important outcome of e-commerce penetration has been the opportunities provided to small-sized entrepreneurs. “Women who used to make clothes at home didn’t have a wide market. We helped them reach a large customer base by building websites for them.”

This is the side of the business, which offers vast potential for growth, he says. “The future of e-commerce lies in international penetration. Imagine how much Pakistan’s economy will benefit when someone from here can easily sell a product to someone in Australia.”

Even though e-commerce in Pakistan mostly banks on cash-based transactions, Baxamoosa says that wouldn’t hamper growth in any way.

“This is a cultural problem in this region. Interestingly, 70% of the online deliveries in China involve cash. So instead of getting bogged down, we should use this to our advantage,” he said.

By Saad Hasan, Published in The Express Tribune, September 22nd, 2014

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