Amazon.com is world’s largest retailer and services providers. It is a widespread internet based enterprise that sells books, movies, electronics, toys, housewares and variety of other goods either directly or through a third party retailer. In addition to the goods, it also deals in sales of data storage and computing resources also called “cloud computing”.
Impact of Amazon on Pakistan’s Economy
Amazon is 2020’s most powerful company which has earned a gigantic amount of reputation over the past decade. The reason for this massive progression is their focus of customer service and satisfaction. The way people shop is highly disrupted by the Amazon.com. It has created a ripple effect in the macro-economy of the world by impacting jobs, inflation and investment. Amazon had added Pakistan to its list it means that there will be a huge trade going on in Pakistan through this platform. Also the people will get the opportunity of shipping products from all over the world. But question over here is that how it will be affecting the economy of Pakistan. Here are some impacts of Amazon.com on Pakistani Economy.
A Massive Retail
Amazon offers products at a much lower rate than the other retailers. This serves as a bridge between consumer purchases and sales. Pakistan’s economy is a mediocre one which has suffered a lot particularly during 2020 due to pandemic. Many businesses have shut or switched to other business but still there is a huge amount of uncertainty in the economy. Enablement of Amazon in Pakistan is a positive step in bridging the businesses to the international retail. In US alone amazon generates 23.1% revenue of web purchases. Even in 2020, the revenue hyped up to 26%. If we implement this revenue scenario in Pakistan, then there will be a huge revenue generated through the online purchases of Amazon.
Due to COVID-19 there is a change in pattern of selling and buying of goods. People are reluctant to go and buy things. During the past decades, retailer platforms like DARAZ, Alibaba, OLX has served here but the progress isn’t significant. The reason is that the retailers don’t provide quality products, also the prices aren’t reasonable. People are often discontented on the private retailers present on these platforms. But with amazon this issue is diminished because it’s a huge retailer which considers quality and prices at the same time.
So, Pakistani retailers as well as the people can enjoy Amazon for sales and purchases generating a huge revenue for their economy thus blessing it with the stability.
Lowers Inflation
Pakistan is currently facing an economic recession and inflation is touching the skies. Inflation has troubled everyone. The government and economists are working on it but still there is no way forward to eradicate it. Amazon has broken the traditional trade market and without any front store it is selling products at much lower rates. This gives it an advantage to have a thinner profit margin and break the rivals at lower prices. When there is unemployment in a country there is a wage increase but amazon cuts this rule off by providing the employment and maintaining the wages thus there is no inflation. This inflation rule is completely applicable in Pakistan because retailers will have a huge platform for trading, also enough employment will be provided therefore the inflation rate will decrease.
Jobs at Amazon
From 2019 and onwards, the job market in Pakistan is facing serious recession. There are no jobs for fresh graduates and also many people are facing unemployment already. Government is working on creating job market but still its unsuccessful. Amazon offers millions of jobs every year worldwide. These jobs have different mode i.e, part time, full time, contract based. So by addition of Pakistan to the Amazon list will create jobs for capable individuals. Thus, Pakistan will experience an economic progression.
Facilitator of Small Businesses
Amazon not only sells products but it also provides an opportunity to the other small retailers, businesses and people to list here and reach a large number of international customers. In Pakistan, if small businesses will be allowed to sell their products at Amazon.com it will create local job market and will decrease inflation. According to Amazon, 900,000 jobs are created outside the company due to Amazon Marketplace.