The Success Story of Retail Sector of Pakistan. The retail sector of Pakistan has flourished a lot since the last decade and has established itself as the second largest sector in the country. It not only operates in the big cities of Pakistan but has also captured the smaller urban centers and towns. Not only the local retail groups have benefited form this market, and have established their businesses into proper brands, but the global brands have also opened their outlets here. It holds 16% of the country’s labor force and provides an enormous support to the country’s economy by bringing foreign direct investment through attracting the international brands. All the big cities of Pakistan now have big malls and supermarkets which provide a platform to the different merchandises and the international brands to deliver under one roof.
Retail Sector of Pakistan has Witnessed Huge Boom in Last Decade
Today, the projected mass of Pakistan retail market is approximately $50 billion. The reason behind this, as stated by the State Bank of Pakistan, is an increase in the middle class. A study conducted by the Standard Chartered Bank discovered that Pakistan has around 30 million household units whose annual income is more than $10,000. According to International Financial Firm, Pakistan is one of the top ten emerging economies mainly because of its retail sector. Foreign brands have given Pakistan a visible appearance in the global retail sector. Pakistan now holds many fast food chains, home delivery services and suppliers which supply quality meat and poultry.
An Important Pillar of Pakistan’s Economy-Retailing
Above all, the retail industry is also benefiting from the technological advancement because it is cost effective and reach out to an enormous number of customers at a time. A study has shown that now the retailers are more interested in investing in the online sector as it is going to be very beneficial in the years to come. This advancement in the retail sector has not only benefited the industry but has helped people to reach the global market easily.
The Ecommerce sector is also growing at a very high speed holding over $60 million. The biggest event of Ecommerce was introduced by Daraz, an online shopping store, in 2015. The event is named as black Friday which has now become a trend. During this event, Daraz and kaymu surpassed 1 Billion rupees. Yayvo.com exceeded 60,000 orders as these online sites provide the customers an opportunity to shop from home. Now this concept of Black Friday is followed by every brand, present in the country, both at outlets and on online stores. Besides that, every year, the size of commerce sector gets double as its compound annual growth rate is 100%. Pakistan is expected to see a boom in e-commerce in the next five years. By 2020 Pakistan’s e-commerce Market is expected to surpass $1 billion. This represents a huge opportunity for both start-ups and investors.
The Ecommerce sector is also growing at a very high speed holding over $60 million
Despite an astonished growth in the retail sector, Pakistan faces many problems while introducing new franchises in the markets. Today, there are huge number of department stores in the major cities meaning that there is not enough space for the foreign brands to operate in the market. The international brands are also facing the problem of the replica products as, within a week. Usually within a week, replica product is introduced in the market which is same as original. Above all, law and regulation remain a major problem in the main cities of the country. The government of Pakistan needs to take major steps to improve the security situation. Thus, the key decision of Pakistani operators and the professional activity of the national and the international companies, operating in the country, will determine the direction of future growth in the retail sector.