Price Dispersion and Frequency of Price Changes in Pakistani Mobile E-Stores

Abstract

This thesis investigates the dynamics of price dispersion and the frequency of price adjustments within the rapidly evolving Pakistani digital mobile-phone ecosystem. The Pakistani smartphone e-commerce market has grown into one of the most active product categories within the country’s broader digital retail economy, driven by rising smartphone penetration, the rapid expansion of price-aggregator platforms such as PriceOye.pk, and the heterogeneous brand mix of premium imports (Apple, Samsung) alongside dominant value brands (Xiaomi, Infinix, Tecno, Oppo, Vivo). Despite the theoretical expectation that digital transparency reduces search costs and leads to price convergence, this study identifies a persistent “Search Cost Paradox” in this market. Through a quantitative research design utilising secondary archival data retrieved from the Internet Archive’s Wayback Machine for two leading Pakistani mobile e-retailers (PriceOye.pk and Telemart.pk) across a 25-month observation window, the research examines how localised market frictions — including a significant trust deficit, dependency on imported devices, and the algorithmic pricing behaviour of price-aggregator platforms — sustain price variance. The study further explores the impact of macroeconomic conditions, specifically the 2025 Digital Presence Proceeds Tax (DPPT), implicit PKR/USD exchange-rate movements, monthly mobile-phone import value, and the Herfindahl-Hirschman Index (HHI) of vendor market concentration, on retailer pricing strategies. Findings indicate that price dispersion is not merely a market inefficiency but a tier-dependent strategic outcome for retailers navigating a high-volatility environment characterised by product life-cycle repricing, brand-reputation differentials, and the risks associated with a Cash-on-Delivery (COD) dominant market. This research provides an empirical foundation for understanding digital economics in an emerging market context, offering critical insights for retailers, consumers, and policymakers in the Pakistani mobile retail sector.