he e-commerce industry in Pakistan is positioned to be a transformative force for economic growth and inclusion, especially as internet adoption rises. However, the sector faces significant obstacles, primarily stemming from inconsistent regulatory policies and recurrent internet downtime, which together stymie its potential. Internet disruptions in Pakistan are not merely inconvenience; they are severe impediments for businesses that rely on constant connectivity for transactions, customer engagement and supply chain coordination. The dual burden of regulatory complexity and unreliable internet hinders consumer confidence, business scalability and economic contribution, making it imperative to implement targeted reforms.

Internet downtime is a recurring issue in Pakistan, especially in rural areas and smaller cities. Frequent connectivity issues damage consumer trust, as they disrupt payment systems, prevent timely access to online services and cause order cancellations. For an industry dependent on the digital ecosystem, such as e-commerce, connectivity issues erode the core of business operations. Notably, slow connections or sudden shutdowns lead to abandoned shopping carts, incomplete transactions and customer disengagement, all of which are critical issues for businesses aiming to convert online visitors into loyal customers. Compounded by these challenges, the regulatory environment has yet to catch up, often lacking clarity and cohesion regarding data privacy, digital payments and consumer protection in the e-commerce context. Businesses are left in a difficult position, having to navigate compliance requirements that are either too broad or incompatible with the needs of a growing digital industry. Internet instability makes achieving compliance even more complex.

Kenya’s M-Pesa platform, for example, has set a strong example for other countries with internet access challenges. M-Pesa, a mobile money system, functions on USSD technology, which doesn’t require continuous internet access, enabling people even in low-connectivity areas to transact digitally. Pakistan could benefit immensely from adopting similar offline-compatible payment systems. Such systems would ensure that transactions could continue even during connectivity issues, helping businesses operate more consistently. To promote these solutions, the State Bank of Pakistan could collaborate with telecom companies and financial technology providers to support mobile-based digital payments that don’t depend on stable internet. By removing connectivity barriers for transactions, Pakistan could stabilise its e-commerce transaction volume and improve customer trust in digital payments.

Another approach to mitigating the effects of internet downtime in e-commerce is to build hybrid systems that allow for both online and offline functionalities. India provides a notable example here, where e-commerce giants like Flipkart and Amazon have introduced click-and-collect services, enabling customers to browse products online and pick up goods from physical locations. This model reduces reliance on internet connectivity while preserving the convenience of online shopping, providing customers with alternative ways to complete purchases even during internet disruptions. In Pakistan, a similar approach could help expand the reach of e-commerce to areas where internet access is intermittent or unstable. To support this model, Pakistani regulators could incentivise e-commerce companies to build physical collection points or partner with local stores, ensuring that consumers retain access to their online purchases regardless of connectivity conditions.

However, improving payment systems and hybrid shopping options only partially address the issues caused by internet downtime. Pakistan’s regulatory environment needs to promote infrastructure development that supports internet resilience. Brazil, for example, tackled a similar challenge by incentivising the establishment of content delivery networks and local data centres. By caching high-demand content closer to users, Brazil mitigated the impact of internet downtime and ensured that users could access essential online services with lower latency. Governments in Pakistan could similarly support telecom operators in building local data centres, thereby reducing dependency on international networks and allowing some level of local access even if international connections are temporarily down. These efforts could significantly enhance e-commerce performance in Pakistan, as more consumers and businesses would benefit from faster access to platforms without being overly dependent on stable, high-speed internet from abroad.

Additionally, internet connectivity challenges are compounded by regulatory policies that lack specificity for e-commerce, particularly regarding consumer protection. Unlike traditional retail, online consumers are vulnerable to issues like counterfeit products, undelivered items or misleading advertisements. India’s Consumer Protection (E-Commerce) Rules offer a good benchmark, addressing e-commerce-specific concerns such as transparency in pricing, refund policies and protection against fake reviews. In Pakistan, consumer trust in e-commerce platforms remains tenuous. A lack of clear regulations exacerbates this issue. Pakistan’s regulatory framework could incorporate e-commerce-specific consumer protection clauses, ensuring consumers can seek redress for online grievances effectively. By mandating clear refund and return policies, transparent disclosure of product information and accessible customer service channels, such regulations could bolster consumer trust even when technical challenges persist.

Similarly, supporting technologies like Progressive Web Apps could help e-commerce businesses function more effectively during connectivity issues. Indonesia offers a relevant example, where companies like Tokopedia and Bukalapak have adopted PWAs to address connectivity challenges. PWAs can store essential information offline, allowing users to browse products and check prior orders without an active internet connection. This ensures continuity of the customer experience despite downtimes. In Pakistan, e-commerce businesses could greatly benefit from regulatory encouragement to develop PWAs, particularly for reaching users in low-connectivity areas. Regulators could incentivise e-commerce companies to adopt PWAs or even subsidise the development of lightweight digital platforms that function smoothly despite connectivity interruptions, providing users with a more consistent experience.

Finally, government partnerships with telecom operators to establish a reliable internet infrastructure are essential. Nigeria provides an instructive example, where public-private partnerships were formed to improve internet resilience, especially in underserved areas. Pakistan could benefit from a similar national initiative, incentivising telecom providers to invest in redundant networks and backup systems. Implementing a national internet resilience plan could prioritise network redundancy and enable quicker repairs, ensuring fewer interruptions for consumers and businesses alike. With more stable connectivity, e-commerce businesses could operate without the constant threat of internet outages, leading to a more reliable and user-friendly digital environment.

In addressing internet downtime, Pakistan’s regulatory framework has the potential to make transformative changes that would make e-commerce a viable, trustworthy option for millions of people. By learning from other developing countries with similar challenges, Pakistan could develop a resilient, hybrid e-commerce ecosystem that minimises dependence on continuous connectivity. Offline-compatible payment systems, hybrid retail models, content caching through local data centers, specific consumer protections and PWA technology are all strategies that could collectively overcome the dual challenges of regulatory fragmentation and internet downtime. Implementing these measures can not only enable e-commerce to thrive in Pakistan but also lay a foundation for a more inclusive, digitally empowered economy that is resilient to infrastructural challenges.

The writer is the CEO at ZAK Casa and Verde as well as a managing partner at the Lex Mercatoria law firm