Pakistan’s 5mn+ SMEs building on rented land

In Pakistan, more than five million small and medium-sized enterprises (SMEs) make up over 90% of businesses and contribute around 40% to the country's GDP. These SMEs have been increasingly shifting their business models to digital platforms, driven by the growing popularity of social commerce. With the rise of social commerce, consumers are now discovering products through stories, creators, recommendations, and short-form videos before actively searching for them.

However, this shift in buying behavior has introduced new challenges for both consumers and businesses.

Trust is no longer just a consumer concern but has become a crucial economic infrastructure. Every step in the customer journey involves multiple platforms, such as Instagram, WhatsApp, and payment systems, which can lead to increased friction and opportunities for fraud. Additionally, the financial cost of failed deliveries is significant for SMEs, leading to lost advertising, packaging, and shipping expenses.

The rise of generative AI has further intensified competition for consumer attention, making it easier for illegitimate businesses to create convincing fake storefronts. As a result, the trust challenge is becoming increasingly difficult to manage, as most SMEs lack the infrastructure to fully understand their customers due to the fragmented nature of customer data across various platforms.

The next generation of commerce in Pakistan is evolving from merely enabling transactions to creating an ecosystem that encompasses discovery, trust, identity, payments, reputation, logistics, and intelligence. By building trusted infrastructure, Pakistan can further support the growth of its burgeoning entrepreneurial ecosystem.