Indian merchants registered as sellers on Seattle-based online retail giant Amazon could soon find more buyers in Pakistan, if the company’s bid to increase its holding in a Pakistan-based fashion portal Clicky.pk proves successful, according to four people aware of the ongoing negotiations between Amazon and Clicky.pk.Amazon already owns about 33% stake in Clicky.pk through its acquisition in 2017 of online retailer Souq, which is based in Dubai. Souq had invested in the Pakistani company in late 2016. “If a transaction (between Amazon and Cicky.pk) goes through Indian merchants can sell more goods in Pakistan, which can be routed through Dubai, where Souq is based,” said one of the people cited above.Pakistan has a negative list of about 1,200 goods that cannot be imported from India. This has encouraged informal trade between the two countries routed largely through Dubai and occasionally Afghanistan.
According to a 2016 ICRIER paper, informal trade between the two South Asian neighbours for fiscal 2013 was pegged at $4.7 billion, dominated by exports from India. The formal trade between the two countries that year was $2.6 billion and was down to $2.3 billion in fiscal 2017.“Several Indian FMCG products are popular in Pakistan. But a major chunk of products are raw material, unbranded food item, clothing and jewellery,” the sources told ET. Typically, most of these products are routed through Dubai and the big traders in Karachi who import these products, from where they are distributed across the country, the person added.Amazon declined to comment for this story.
Clicky.pk did not reply to email queries from ET.For Amazon, raising its stake in Clicky.pk will also provide the American company with a firmer foothold in a market that China’s Alibaba is also eyeing keenly. Alibaba, is also in talks to pick up a stake in Rocket Internet-owned Daraz, one of the largest online commerce platforms in Pakistan, according to a Bloomberg report last month.Clicky.pk competes with players like Daraz. Pakistan’s online commerce market was estimated to be worth $100 million in 2017.Clicky.pk had raised nearly $1million by selling 33% stake to Souq in late 2016.
In 2017 Amazon completed the acquisition of Souq for $580 million. The deal between Souq and Clicky.pk was not reported till now. Experts are of the view that Amazon will look to consolidate its presence in the Indian subcontinent and the Middle East. “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, optimise its sourcing and reduce single-country dependence for revenue flow,” said one of the sources mentioned above. Ecommerce in Pakistan is set to cross $1 billion by 2020 from $100 million last year, according to a recently published report by the Pakistan Telecommunication Authority (PTA). In comparison, India’s online retail market was pegged between $18 billion and $20 billion in 2017 with overall ecommerce market, which includes areas like online travel, estimated to be worth over $33 billion.