Equity Analysis /

Time is ripe for Pakistan's digital revolution in fight against Covid-19

  • Covid-19 accelerates e-commerce in Pakistan – an indication of what could happen worldwide

  • Pakistanis are switching to online options for banking, groceries, health care and education

  • We expect the pandemic to push Pakistan towards more digitalisation more quickly than previously anticipated

Time is ripe for Pakistan's digital revolution in fight against Covid-19
Vahaj Ahmed
Vahaj Ahmed

Head of Industrials Equity Research

Rohit Kumar
Rohit Kumar

Global Financials/Thematics

Tellimer Research
4 May 2020
Published byTellimer Research

In the context of the Covid-19 restrictions on business activity in Pakistan, there is very little resistance against ‘tabdeeli’ – urdu for ‘change’, and Prime Minister Imran Khan’s political slogan. It is a great opportunity for Pakistan’s leadership to embrace smart government and to properly document the economy. 

Moreover, with 165mn mobile subscribers (78% 'teledensity' – the number of telephone connections for every hundred individuals living within an area), 76mn active 3G/4G subscribers and c30% of currency in circulation/M2 (one of the highest rates in emerging markets), Pakistan has a great deal of catching up to do with the rest of the world in terms of digitalisation and e-commerce.

Since the first major provincial lockdown on 23 March, the bricks-and-mortar mindset has been abruptly replaced by virtual workspaces, and not just in the corporate sector – government meetings, press briefings and even opposition meetups have also gone online. Furthermore, Pakistani urbanites are switching to online options for services including banking, groceries, health care and education. And now, with Ramadan having started, online shopping for Eid – the festival that marks the end of the month-long fast – is picking up steeply. 

There are significant obstacles for the country – Pakistanis will need to become more tech-savvy and the digital infrastructure will have to become more secure (and stable) – but we expect Covid-19 to rapidly accelerate Pakistan towards digitalisation. Huge numbers of Pakistanis, as in other countries, are looking to technology and e-commerce to help them cope with lockdown – and it is hard to imagine a return to the pre-coronavirus world. In this report, we look at the sectors ripest for modernisation.

Online banking

Aside from a lack of awareness among the public, one obstacle to increased uptake of online banking is that account holders continue to question the security of online transactions, more so following two back-to-back cyber-attacks, in November 2018 and January 2019, that leaked details of up to 88,000 people (c0.5% of the total number of online bank account holders). Other reasons include: 

  1. The convoluted process of setting up online banking (which is not yet paperless at most banks; moreover, customers are unwilling to visit their branches in the current environment); and 
  2. The limitations on the size of transactions (most banks usually have very low daily limits). 

To overcome some of these issues and to promote transactions through digital channels, all banks are encouraging customers via emails and text, and the central bank has waived online banking transaction charges.


Young people (the majority of whom still live with their parents) are encouraging usage of online grocery providers (from a fairly number of e-retailers), but with limited success. Those with the money – typically, the parents – are very hard to convince, their major reasons being: 

  1. The unknown quality of perishable food items bought online; 
  2. The price differences compared with open markets/street vendors, as well as with their ‘ancestral’ retailers/wholesalers (shops that families have trusted for years, sometimes generations); and 
  3. Delivery times, which average 2-4 days in the current environment. 

In the end, the youth are reluctantly obliged to run shopping errands to keep their elders safe.

On the other hand, most the retailers/wholesalers (even the ‘ancestral’ ones) who have had no intention to accept card payments (previously fearing that documentation would lead to accountability and, eventually, to tax payment) now have a point-of-sale machine. Most have three reasons for adopting the technology: 

  1. A reluctance to deal with cash during the Covid-19 period; 
  2. Not having enough change/small denomination cash; and 
  3. A reluctance to provide credit sales to their customers, especially in these uncertain times. 

As a result, some traditional grocery stores have started online businesses. Moreover, some brands, like Olper’s (popular packaged milk brand by the listed Frieslandcampina Engro Pakistan) and Pak Elektron (one of the listed white goods manufacturers), have set up online stores and offer free delivery (and installation).


Health care

With hospitals inundated with potential Covid-19 patients, those with minor illnesses are looking towards telemedicine (caring for patients remotely). Organisations/apps such as doctHERSTele Polyclinic and Karachi-based Find My Doctor have reportedly seen a 10-fold increase in incoming calls, texts, Facebook/WhatsApp messages and Skype/Zoom calls. Meanwhile, testing labs are offering to collect samples from home and upload the results online to support the doctors, and most pharmacies are now offering delivery services. The most common issue almost all telemedicine providers face is frequent incoming prank calls, especially harassment calls aimed at female doctors, but the significant benefits, particularly given the importance of social distancing, offset the negatives.


Although the federal government has decided to keep educational institutes closed until 31 May, many schools have turned to online learning through applications like Microsoft Teams and Zoom. However, parents and teachers are, on the whole, not especially tech savvy, with parents fumbling through technology and dealing with weak internet connections, and teachers struggling to create engaging content. Online platforms, though, such as Alt Academy, are keen to help vast numbers of students by making education accessible and cost-effective through recorded video lessons and interactive sessions.


Another trend gaining momentum is online shopping for Eid. Many Pakistanis are turning to their favourite clothing and footwear brands (like BataGul AhmedJunaid JamshedKhaadi and Service) as well as other digital platforms (like Daraz and HomeShopping). This is because provincial governments have decided against setting up discount bazaars during Ramadan; allowing the masses to do Eid shopping (which usually takes place after sunset) remains out of question. Online shoppers, however, are facing slow deliveries (ranging from 7-10 days) and dread receiving the wrong deliveries closer to the Eid festival.