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Letters To The Editor

Your efforts to highlight the mining sector are indeed worth appreciating.  It would be great, if you would also cover the Kalabagh iron refinery project. A steel mill was to be set up at Kalabagh.  Kalabagh has the largest reserves of iron ore in Pakistan. This proposed Steel Mill at Kalabagh should be given priority because it will not only provide job opportunities, but steel production within the country will also increase. The best thing about this project is its reliance on the local iron ore deposits. It allows this proposed Steel Mill to produce steel at cheaper rate than presently being produced by PSM due to its imported and expensive iron ore.

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Editorial

Dear Readers,
The Evaluation of goods has always been a thorn in the neck of importers. The process has been a cause of much debate and there have been various rules defined to streamline the procedure. An impartial and fair valuation system is necessary for smooth flow of goods. Considering Pakistan is a signatory to the WTO agreement on valuation of goods based on transactional value, but somehow the agreement has not been enforced in letter and spirit.
As the transaction value system promotes impartiality, it has always been highly recommended that it is implemented, simply because a transparent mechanism is a hindrance in the flow of kickbacks and commissions. To understand the riddle, we have covered the customs valuation process in detail.

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E-Commerce A Layman Guide to Click and Mortar

Babar A. Pirzada

xtending current business to internet or starting up a new e-commerce business while being based in Pakistan is not as difficult as it seems. Its cheaper, has low operational cost, broader market reach and has higher profit margins with virtually unlimited business volume.
The strategic advantages are lot more than being based in US or Europe. Starting up with location, as Pakistan is located in South-East Asia the logistic cost to reach Europe, Middle East, Central Asian countries, Far East, Africa and Australia is competitively lower. Interestingly, more than world's 55% population lives in the neighboring countries i.e. Pakistan itself, China, India, Bangladesh, Iran, Afghanistan, Far East and Middle East. Telecom infrastructure in Pakistan is one of the most advanced in the world. Land in rural areas is cheap; likewise in most urban areas rental cost is significantly low. Skilled IT professionals are abundantly available and cost is little. Branding is another frontier still waiting to be conquered and large number of white label producers make this opportunity more lucrative, as the trend of branding has recently started and only covers very few product segments, with comparatively less number of consumers. National or regional competition is not there; it presently does not exist. For the internet users of more than 30 million, sites like shophive.com, myshop.com.pk etc is one and the same to no competition. With reference to my previous article "e-Commerce: The Pakistani Frontiers" I once again want to emphasize on the right approach, which off course and indeed is market presence (market muscle) and right source of revenue. Even with a conservative but logical approach,  we judge the possibility of success given that we don't have competition, logistic are cheaper, profit margins are higher, strong branding opportunities are available, skilled labor is abundant & cheap, consumer base is highest possible and one of the most comprehensive telecom infrastructure is available. The chances of failure are very few; the only thing required is a "serious initiative". There are some apprehensions by critics, all of them are media hyped except financial transactions. Indeed, there is a remedy and many alternatives like direct fund transfer, money order, western union, internet merchant account in China, Middle East or Far East, moneybookers.com, or any innovative alternate you can come up with.  
For ease and readability, I have divided the guidelines into three sections which are physical requirements and operations, government and legal issues and online presence. The details are given while keeping in view that it is a new startup because the extension in current business to internet is much easier.
Physical Requirements and Operations
Physical requirements are not much, but focus is essential to ensure the best possible use of these assets. One will need to have at least one room with capacity of five persons, furniture, telephone line, fax, high speed internet, computers with UPS, one programmer for web development, one data entry operator/receptionist/coordinator, one internet marketer cum blogger, one physical business development cum marketing professional and clearly defined daily job routines with daily targets versus performance. The more open organizational culture you will promote, the more growth rate can be achieved.
Government and Legal
To become a legal entity, the legal registrations with different government organizations and bodies is required. The process of registration starts with company registration. In company registration, one has to get a company name reserved, you'll need to create your account on the website of SECP (Securities and Exchange Commission of Pakistan) https://eservices.secp.gov.pk/eServices/. You'll have to fill online form and then will have to submit a fee of Rs. 200/- for company name reservation. This will take 3-4 working days. Once your company name is reserved you'll require to get a Digital ID (PKI-Public Key Infrastructure certificate) issued from the NIFT e-trust for Rs.1275, this will take one day. After you have digital ID with you, install the digital certificate and required application (You can find details on SECP's website) and then log onto your account and submit the documents, which will include Article of Association, Memorandum of Association, NIC numbers of Directors and some other forms mention on the website of SECP.
The second step is to register with other professional bodies i.e. FBR (Federal Board of Revenue) for NTN (National Tax Number) and STRN (Sales Tax Registration Number). The process is simple and you can find details on the website of FBR (http://www.fbr.gov.pk). Like SECP eservices FBR provides facility of filing over the internet through their website. You can register with FBR and PRAL will provide you the user name, password and PIN through an automated process. As the NTN certificate is issued the tax registration is almost complete and registration for other applicable taxes e.g. FED and STRN can be initiated as per requirement later.
Other registrations you might consider are:
1.     Filing for Professional Tax Certificate (District Excise and Taxation Authority i.e. "Kachehri")
2.   Employee Social Security Institution.
3.   Employee Old-Age Benefits Institution.
4.   Pakistan Shops and Establishment Ordinance.
Online Presence
You must understand that getting your e-commerce website developed from a software house will be quite costly, so you should not consider it as an option. Hire one or two developers, who not only will create a website for you, but will also maintain it and perform e-marketing activities.
You have two options, either you can get your whole website designed from scratch (which your developers will say) or develop it using an existing Open Source CMS (Like Joomla (virtue Mart etc), Magneto, osCommerce etc).  Go for customization of open source CMS, but keep in mind that CMS should be php based, as you will find it easier to find add-ons, modules and competitive hosting. It will not only reduce time of your development dramatically (It should not take more than 12 working days to fully customize the CMS and front end for a small to mid sized ecommerce store and upload it) but will also save you quite some money.
Once your website is developed, get your domain registered, the domain name should be 5-7 characters long, preferably on a .com domain and should be easy to remember. Buy a decent shared hosting account, get an online merchant account (if you have bank accounts in UAE, Singapore etc it will be easier for you and will save you high fees of alternates third party merchant accounts e.g. 2checkout etc), upload your website and put the merchant account details in it.
Additionally go for a corporate rate agreement with a logistics company like DHL and try to get plug-in or module for integration to your website. Clearly let your customers know that additional taxes and import duties will be charged to the customer.
Now start uploading information and product details to your website and start e-Marketing of your website. Now as you are in the market now, it is crucial to drive traffic to your website, following are the dimensions to the e-Marketing (I am just highlighting the tips):
-SMM (Social Media Marketing):  Create pages on FaceBook, twitter etc and start a campaign for increasing the awareness and fan base. Regularly update the page. Just integrate twitter with your FaceBook page and update status etc through your cell phone (get a PDA and install twitter and FaceBook apps).
-SEM (Search Engine Marketing which includes SEO, SES, directory listings and Back links): This is bit technical like web development. Just make sure that your website is submitted in all the popular search engines, every page of your website contains keywords with more than 10,000 average searches, all the keyword has KEI better than 0.5, your website is included in at least 500 directories and your team is continuously blogging and developing back links.
-e-Mail marketing (emailing your website and promotions directly to the mailboxes of your potential customers): e-Mailing is an important tool for marketing which we normally over looked and under estimated.  As, in one year total number of email addresses grew by 480 million (in 2010) and FaceBook + twitter users grew to 250 million in 2010. Globally, total number of email addresses is 2.9 billion which is a lot more than social media users. So, start growing your email list and use it as a regular tool for traffic growth.

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