6 Ways AI Is Being Used in Pakistan’s E-Commerce Industry

AI in Pakistan E-Commerce: 6 Powerful Ways It’s Changing Online Shopping

AI in Pakistan e-commerce isn’t a future idea anymore. It’s already working behind the scenes every time you search for “lawn suit under 3000” on Daraz, chat with a clothing brand on WhatsApp, or get a call confirming your cash on delivery order. Most shoppers never notice it, and that’s partly the point.

The timing makes sense. Pakistanis are buying online in bigger numbers than ever. According to the State Bank of Pakistan, consumers made 434.5 million online purchases worth Rs0.47 trillion in just the January to March 2026 quarter. With that much activity, no business can manually sort millions of products, answer every customer message, or check every suspicious order. Software has to help.

But here’s the part that most “AI is amazing” articles skip. The same tools that help honest sellers also help scammers. Fake reviews can be written in seconds. Celebrity endorsements can be faked with deepfake video. Fraudulent stores can look more professional than real ones.

This article takes a balanced look at AI in Pakistan e-commerce. It covers six real ways the technology is being used today, backed by examples from Pakistani platforms and data. It also looks honestly at how AI has been misused in online shopping fraud, both in Pakistan and abroad, and what buyers and sellers can do to stay on the right side of it.

Why AI in Pakistan E-Commerce Is Growing So Fast

Before getting into the six uses, it helps to understand why AI in e-commerce is catching on in Pakistan right now.

More People Are Paying Digitally

For years, cash was king in Pakistani online shopping. That’s slowly changing. SBP data shows that 3.4 billion transactions went through digital channels in the first quarter of 2026, making up 92% of retail payments by volume. Of 268 million bank accounts, nearly 49% are linked to a mobile banking app or digital wallet.

More digital payments mean more data, and more data is exactly what AI systems need to learn from.

The Market Keeps Expanding

Estimates vary, but the direction is clear. One widely cited figure puts Pakistan’s B2C e-commerce market at USD 14.11 billion in 2025, projected to reach USD 20.41 billion by 2029. Another analysis projects Pakistan’s e-commerce spending to grow at an average of 22% a year from 2026 to 2030.

Cash on Delivery Still Causes Headaches

Even with digital growth, COD dominates, and it’s expensive for sellers. A COD order can be refused at the door, and Pakistan’s return rate of roughly 25 to 35% is high by international standards. Every returned parcel costs a seller shipping, packaging and time. That problem alone pushes businesses toward smarter tools.

6 Ways AI in Pakistan E-Commerce Is Being Used Today

Here are the six most practical applications of AI in Pakistan e-commerce, with real examples where they exist.

1. Smarter Search and Personalized Recommendations

This is the most visible use of AI in Pakistan e-commerce, and Daraz is the clearest example.

The scale is huge. Daraz has more than 30 million shoppers and over 23 million products, and customers ran more than 3.5 billion searches on the platform in 2025. Nobody can scroll through 23 million products. Search has to be smart.

In a September 2026 panel discussion, Daraz’s Head of User Growth, Ahsan Ali, explained that the company looks beyond completed purchases at signals like searches, browsing behaviour, clicks, cart activity and transactions. He gave a practical example: a search for “gift for wife under 5k” doesn’t name a product, but it tells the system the recipient, the budget and the purpose.

That’s what Daraz AI is trying to solve. Instead of forcing you to know the exact product name, the system tries to understand what you actually mean. Ali described the long-term goal as making online shopping less like navigating a catalogue and more like an intelligent discovery experience.

Notably, the company was careful not to overpromise. Daraz stopped short of claiming AI could predict purchases with certainty or tell sellers what to stock. That’s a refreshingly honest position in an industry full of hype.

What this means for you: Your searches, clicks and abandoned carts shape what you see next. That’s convenient, but it also means your browsing history is being used to influence your buying decisions.

2. AI Chatbots and Customer Support

Anyone who’s run a small online store in Pakistan knows the daily flood of “price?”, “COD available?” and “delivery kab tak hogi?” messages. AI chatbots now handle a large share of these questions for many brands.

Research on Daraz backs this up. A study based on 423 customers and managerial employees found that chatbots, personal shopping assistance, easy search, fraud detection and supply chain management all significantly affect Daraz’s e-commerce activities.

For smaller sellers, the most common setup is a WhatsApp Business account connected to an automated assistant that can:

• Share prices, sizes and stock availability instantly
• Confirm orders and collect delivery addresses
• Send tracking updates
• Answer in English, Urdu or Roman Urdu
• Pass complicated complaints to a human

The benefit is obvious: customers get answers at 2 a.m. without the seller losing sleep. The limitation is also real. Chatbots still struggle with angry customers, damaged products and refund disputes. The best Pakistani brands use AI for the routine stuff and keep real people for the rest.

3. Fraud Detection and Fake Order Prevention

This is where AI in Pakistan e-commerce saves real money. Fraud in Pakistani online shopping comes in several forms:

• Fake COD orders placed by pranksters, competitors or people who never intend to accept the parcel
• Payment fraud using stolen card details or hacked wallet accounts
• Account takeovers where someone hijacks a buyer’s account to redeem vouchers or change addresses
• Seller fraud where fake shops take money and ship nothing, or ship something completely different

AI systems look for patterns humans would miss. For example, a new account placing five high-value COD orders to different addresses in one hour is a red flag. So is a phone number linked to dozens of refused deliveries across different stores.

Academic research on Daraz specifically identifies fraud mitigation as one of the areas where AI tools have a significant impact on its business. Courier companies and COD verification services also use similar scoring to flag risky orders before they’re shipped.

The ethical catch: Fraud models can be wrong. A genuine customer in a remote area, or someone who once refused a damaged parcel, might get flagged unfairly. Good systems let a human review borderline cases rather than blocking people automatically.

4. Demand Forecasting, Inventory and Pricing

Every Eid, 11.11 sale and wedding season, Pakistani sellers face the same question: how much stock should I order? Order too little and you miss sales. Order too much and your money sits in a warehouse.

Demand forecasting tools use past sales, search trends and seasonal patterns to make better guesses. This is where search data gets especially useful. As Daraz explained, search behaviour can indicate rising interest before it shows up in sales, since a transaction shows what someone bought, while searches show what they’re considering.

Daraz says aggregated customer activity helps sellers see shifts in demand across categories, products and price points, so they can make better decisions about inventory and emerging trends.

Larger retailers are investing too. Naheed, one of Karachi’s best-known retailers, has reportedly announced plans to develop an AI-driven data centre to improve operations, customer insights and scalability.

Dynamic pricing is the related piece. Some sellers use software that adjusts prices based on competitor pricing, stock levels and demand. It’s legal and common, but it raises fairness questions. If two people see different prices for the same item based on their browsing history or location, is that fair? Pakistan doesn’t yet have clear rules on this, and shoppers should compare prices before assuming the first one they see is the best.

5. AI-Generated Product Content and Ads

This is the fastest-growing area, especially among small sellers on Facebook, Instagram and TikTok. Social commerce is a huge part of online shopping in Pakistan, and AI tools now help sellers:

• Write product descriptions in English and Urdu
• Remove backgrounds and clean up product photos
• Generate model images wearing their clothing designs
• Create short video ads and captions
• Translate listings for overseas Pakistani customers

For a home-based business in Faisalabad or Hyderabad with no budget for photographers or copywriters, this is genuinely empowering. A single person can now produce content that looks professional.

But this is also where honesty matters most. An AI-generated image that shows a kurta in a different colour, fabric quality or fit than the real product isn’t marketing. It’s misrepresentation. Pakistani shoppers already have a phrase for this problem: “what I ordered vs what I got.” AI can make that gap wider if sellers aren’t careful.

6. Logistics, Delivery Routes and Address Matching

Pakistani addresses are famously tricky. “Near the green mosque, second gali on the left, house with the black gate” is a real delivery instruction. AI helps courier companies and platforms by:

• Matching messy, informal addresses to actual locations
• Planning more efficient delivery routes for riders
• Predicting delivery times more accurately
• Flagging addresses with a history of failed deliveries

The Daraz research mentioned earlier lists supply chain management as one of the key AI tools affecting the platform’s operations. Better logistics means fewer failed deliveries, lower costs and, eventually, lower prices for customers.

The Dark Side: How AI Has Been Misused in Online Shopping

Any honest look at AI in Pakistan e-commerce has to include the problems. The same tools listed above have already been used for fraud, and past cases show clear patterns.

Deepfake Celebrity Ads

Scammers love using famous faces to sell fake products. Internationally, AI-generated ads using Taylor Swift’s likeness fooled some fans with a fake cookware giveaway designed to lure people to counterfeit websites and steal their payment details. In another case, a deepfaked MrBeast appeared in a TikTok ad offering iPhone 15s for $2, and he publicly called it a scam.

The scale is enormous. Meta says it removed more than 159 million scam ads in 2025 and took down 10.9 million Facebook and Instagram accounts linked to criminal scam centres. Pakistani users scroll the same platforms, so deepfake ads showing local celebrities, cricketers or TV personalities “recommending” a miracle product or investment app are a real risk.

AI-Written Fake Reviews

Fake reviews have always existed, but AI in e-commerce has made them cheap and endless. A seller can now generate hundreds of believable five-star reviews in minutes.

Regulators are responding. In the US, the FTC finalised a rule in 2024 that prohibits fake reviews, including AI-generated ones, and bans censoring honest negative reviews or paying third parties for positive ones. Pakistan doesn’t have an equivalent rule specifically targeting AI reviews yet, which means shoppers here need to be extra careful.

Impersonation and Fake Investment Stores

Pakistan’s cybercrime authorities are dealing with fraud that increasingly uses the same digital tools. In August 2026, the NCCIA arrested 28 suspects in Punjab for organised online fraud using impersonation, fake investment offers and fabricated official identities. The suspects posed as relatives, visa agents, government officials and Punjab Safe Cities Authority staff to gain victims’ trust.

In a separate case, NCCIA Punjab uncovered a fake trading call centre in Lahore, where a complainant said he was lured into a fake online trading app and lost Rs 2.779 million. In Faisalabad, officials said a victim was persuaded to invest after being shown fabricated trading records, wallet balances and profit statements.

These cases aren’t all AI-driven, but they show the playbook: build trust with professional-looking material, then take the money. AI simply makes the fake material cheaper and more convincing.

Data Privacy Concerns

Personalization depends on collecting your data: what you search, what you click, what you leave in your cart. That’s not illegal, but it deserves transparency. Pakistan’s data protection framework is still catching up to this reality, so shoppers often have limited control over how their shopping data is stored, shared or used.

How Buyers Can Shop Safely in the Age of AI

A few simple habits protect you from most e-commerce fraud in Pakistan:

1. Check the seller, not just the product. Look at the store’s age, ratings history and real customer photos, not just polished images.
2. Be suspicious of perfect reviews. Dozens of five-star reviews written in the same style, posted on the same day, are a warning sign.
3. Don’t trust celebrity endorsements in ads. Check the celebrity’s official, verified account. If they haven’t mentioned the product, assume it’s fake.
4. Watch for impossible prices. An iPhone for Rs 15,000 is not a deal. It’s a trap.
5. Prefer COD or buyer protection when trying a new seller, and open the parcel in front of the rider when the platform allows it.
6. Never share OTPs or wallet PINs with anyone claiming to be from a store, courier or bank.
7. Report fraud to the platform and to the NCCIA through its official channels.

Ethical Guidelines for Pakistani Sellers Using AI

Sellers who use AI in Pakistan e-commerce responsibly will earn trust that lasts longer than any sale. Here’s what responsible use looks like:

• Show the real product. Use AI to improve lighting or backgrounds, not to change colours, materials or sizes.
• Never buy or generate fake reviews. Encourage genuine buyers to leave feedback instead.
• Keep a human in customer service for complaints, refunds and anything sensitive.
• Be clear about data use. Tell customers what information you collect and why.
• Review fraud flags fairly. Don’t blacklist customers based on one automated score.
• Don’t use anyone’s face or voice without permission. Using a celebrity’s likeness in ads without consent is deceptive and can create legal trouble.

What’s Next for AI in Pakistan E-Commerce

The next few years will likely bring more conversational shopping, where you describe what you want in plain Urdu or English and the system finds it. Voice search, visual search (upload a photo, find similar products) and AI shopping assistants inside WhatsApp are all realistic near-term developments.

At the same time, pressure for regulation will grow. As deepfake ads, fake reviews and data misuse become more common, Pakistan will need clearer consumer protection rules, stronger platform accountability, and faster cybercrime enforcement. The businesses that get ahead of those rules, by being transparent now, will be in a much stronger position.

For deeper reading, The Nation’s report on how Daraz is using AI to improve search and seller insights gives a useful inside view, and The Express Tribune’s coverage of SBP’s latest digital payments data shows how fast online spending is growing. For the fraud side, Dawn’s report on the NCCIA’s crackdown on online impersonation fraud and TechCrunch’s explainer on the FTC’s ban on AI-generated fake reviews are both worth reading.

Conclusion

AI in Pakistan e-commerce is already reshaping how millions of people search, shop, pay and receive their orders, from Daraz’s intent-based search across 23 million products to WhatsApp chatbots, fraud scoring on COD orders, demand forecasting, AI-generated product content and smarter delivery routing, all driven by a market where digital payments now make up the vast majority of retail transactions. The benefits are real for both shoppers and sellers, especially small businesses that can now compete with larger brands. But the same technology has been misused through deepfake celebrity ads, AI-written fake reviews and professional-looking impersonation scams, some of which Pakistan’s NCCIA is actively prosecuting, so the future of online shopping in Pakistan depends as much on honesty, transparency and smart shopping habits as it does on better algorithms.

Keywords: