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  • New Tax Measures Trigger 300% Price Surge On Chinese E-commerce Platform In Pakistan

    New Tax Measures Trigger 300% Price Surge On Chinese E-commerce Platform In Pakistan

    Prices on the Chinese e-commerce platform, Temu, have dramatically surged in Pakistan, with increases reaching up to 300% in some cases. This substantial escalation has been reported by customers over the past week, marking a significant shift in the online shopping landscape.

    New Taxes Imposed

    These price spikes appear to be occurring in the wake of new tax measures instituted by the government. The administration last month implemented new taxes specifically targeting online sellers. These levies extend to platforms such as Temu and AliExpress, among others.

    While the companies haven’t issued an official statement providing the reasons behind the price alterations, a spokesperson for Temu pointed to external policy shifts and escalating operational costs across numerous sectors as the primary catalysts for the increases. The spokesperson stated, “We remain committed to providing access to quality products at affordable prices, while fully complying with local requirements.”

    Digital Presence Proceeds Tax Act

    The government disclosed last month that a 5% tax would be put on all goods sold in Pakistan by foreign digital platforms that lack a physical presence in the country. This initiative is part of the Digital Presence Proceeds Tax Act. The goal of this tax is ostensibly to create a more equitable commercial environment. It is said to target online platforms such as Facebook, Google, Spotify and Netflix, in addition to select local online sellers.

    Further, online retail platforms are now also responsible for paying the standard 18% sales tax applicable to local businesses in Pakistan. The government’s rationale for these tax hikes is to equalize conditions for Pakistani businesses that are already subject to both the 18% sales tax and an income tax of up to 35%.

    Concerns Over Impact

    While the government’s intent might be to create a fairer marketplace, experts have voiced concerns over the potential harm the digital tax could inflict on Pakistan’s burgeoning e-commerce market.

    Questions & Answers

    What are the new tax measures impacting e-commerce in Pakistan?
    Last month, the government introduced a 5% tax on all goods sold in Pakistan by foreign digital platforms. These platforms are also expected to pay the 18% sales tax applicable to local businesses.

    What is the rationale for these new taxes?
    The government’s intent with these tax hikes is to create a level playing field for local Pakistani businesses already paying an 18% sales tax and an income tax of up to 35%.

    What are the potential consequences of the new digital tax?
    While the intention is to foster a more equitable commercial environment, experts have raised concerns that the digital tax could harm Pakistan’s rapidly growing e-commerce market.

  • Amazon has no specific time frame for Vietnam website

    Amazon has no specific time frame for Vietnam website

    A senior Amazon official says the firm sees Vietnam’s potential but has not decided on a time to launch services for Vietnamese buyers.

    Bernard Tay, head of Amazon Global Selling Southeast Asia, Australia and New Zealand, said at an event Thursday that the global e-commerce giant sees Vietnam has a potential market.

    He noted that after launching Amazon in Singapore, they would look at opportunities to expand their services to more countries, including Vietnam.

    Amazon Thursday established a team of specialists in Vietnam to support Vietnamese sellers in taking their products to global customers. The company stated that it sees the majority of Vietnamese businesses are small and medium enterprises with large demand for global sales.

    Many Vietnamese leather, footwear, handmade and consumer goods items are selling well on Amazon’s website, Tay said.

    Vietnamese sellers can reach up to 300 million Amazon accounts in 185 countries and territories. Amazon also has 175 fulfillment centers worldwide, he added.

    Bui Kim Thuy, owner of a textile company whose products are being sold on Amazon, said that the e-commerce giant has strict criteria on product origin and quality which Vietnamese sellers will have to meet.

    An apparel product that suits Vietnamese customers might not suit Americans, therefore Vietnamese sellers need to make careful research for international sales, she added.

    Amazon launched a Singapore website last week, the first in Southeast Asia. Vietnamese shoppers can access Amazon.com, but many products are not available for shipping to Vietnam, and those that are available typically involve high shipping fees.

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  • MyDeal pivots to home wares deals

    MyDeal pivots to home wares deals

    As the online marketplace space becomes more crowded, Melbourne-based startup MyDeal plans to shrink to greatness – when it comes to product categories, that is.

    Like many marketplaces, the e-commerce company founded in 2012 by Australian entrepreneur Sean Senvirtne was initially focused on growing its customer database, supplier numbers and range. In 2017, with 1000 sellers and 25,000 products on the site, it expanded into new categories – fashion and travel – and diversified its offering with the launch of a fintech product.

    But now, MyDeal is paring back its business to focus on the furniture and homewares space, an area where the company has always had a natural strength, according to head of marketing, John Barkle.

    “Prior to the massive expansion of products, those were our strongest categories. I think it’s because we have the best price and range, and we’re very good at moving products that are big and bulky,” Barkle told.

    Today, MyDeal claims to have more than 500,000 products on its site. It aims to surpass one million within the next six months by bringing on board new sellers in the furniture and homewares space, a goal that should be made easier by its recent integration with ChannelAdvisor, a US-based e-commerce company that helps businesses list their products on marketplaces such as eBay, Amazon and now MyDeal.

    “This is a significant milestone in the business that signifies 12 to 18 months’ worth of work to get the technology right on our marketplace platform,” Barkle said.

    MyDeal’s marketplace technology is bespoke, and Barkle acknowledged that, in the past, this may have presented a barrier to sellers wanting to join the platform. Listing products on a marketplace can be a time-consuming and labour-intensive process, depending on the marketplace’s information requirements, the number of products the seller wants to offer and the availability of software to automate the process.

    Since solving its technical issues and narrowing its focus, Barkle said MyDeal is now positioned for rapid growth. But the e-commerce company may face new obstacles in its pivot to furniture and homewares, which puts it in direct competition with some much larger and more established players in the niche, such as Temple & Webster. The listed retailer recently reported $49.3 million in revenue in the six months to December 31, a 40 per cent increase on the previous year.

    Barkle declined to share any earnings figures for MyDeal, which is a private company, but said the retailer recently became profitable.

    “We run a very low-cost model, meaning we can pass on those savings directly to the customer,” Barkle said. “Where we intend to compete is on providing a unique experience that improves discovery and satisfaction.”

    MyDeal recently launched a “shop and earn” program that Barkle said is unique among Australian marketplaces. It allows customers to earn credits that they can then put towards later purchases every time they buy something on MyDeal. The amount of credits they earn depends on the seller they buy from, which is designed to encourage healthy competition among sellers to drive sales. Barkle said the site has seen a substantial increase in customer retention since launching the program three months ago.

    Barkle also spoke obliquely about using technology to bring customers as close to touching and feeling the product as is possible online, something that other online retailers, including Temple & Webster, have flagged as being possible with augmented and virtual reality. But like its competitors, MyDeal mostly seems content to let demographics play to its advantage.

    “We believe the penetration of online sales into furniture and homewares will substantially increase over the next five to 10 years, driven by millennial consumption,” Barkle said.

    Housing slump weighs on homewares

    Whether this will be enough of an insulating factor for MyDeal and other online furniture retailers to weather the current housing slump is up for debate. In its monthly trading figures for January 2019, the ABS reported a 0.2 per cent drop in household goods retailing, the only industry sub-group to fall in the month.

    At the same time, MyDeal’s strategic move away from the general marketplace arena, where online “department store” retailers like Catch and now Kogan.com are competing with the likes of eBay and Amazon across a wide range of categories, may prove to be less effective in the long run, as competition among niche marketplaces increases.

    Jason Wyatt, co-founder and managing director of Marketplacer, a software company that provides marketplace technology to businesses, said retailers, brands and manufacturers are beginning to adopt a marketplace mentality to extend their ranges without the burden of owning inventory.

    “That previously hasn’t existed,” he told.  “I don’t think there’s room for 20 mega marketplaces in Australia, but I think we’ll see more niche marketplaces that aim to be ‘something’ for ‘somebody’.”

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