Pakistan’s booming retail sector

Growth more evenly spread out in Punjab, growing middle class one reason


Shahram Haq April 26, 2016
Growth more evenly spread out in Punjab, growing middle class one reason.

LAHORE:


Pakistan’s retail sector appears to have grown at an accelerated pace, however, some regions have leaped ahead while others continue to drag their feet.


Punjab in particular appears to be leading the retail frenzy.

The government has managed to provide better infrastructure, transport and allied facilities in major cities of the province, and this has made Punjab, and more specifically Lahore, the biggest beneficiary, as far as inflow of investments in the retail sector is concerned.

The encouraging future of e-commerce in Pakistan

Ten years ago, people had few options to shop, with fewer small-scale shopping malls and global brands. Now the scenario is changing rapidly.

Some retail gurus have successfully managed to morph consumer’s perception of physical shops into brands and the rest are now following. This has helped real estate investors put their money in medium and large scale shopping malls, as a result several local and international brands have emerged in the last decade.

“Pakistan is 50 years ahead of India if we compare both countries in infrastructural developments,” Kim Culley, a British based retail expert, told The Express Tribune.

He said that Pakistan, however, was still lagging behind when compared with India in term of retail or more precisely in Mega-Mall culture. “It is less advanced than India’s as their key cities have established this culture over the last two decades. Unlike Pakistan, where people tend to shop in these retail centres and malls, India has its own problems; there is a huge social resistance from people to shop in such malls who prefer traditional retail centres,” Culley added.

Lahore, according to retail experts, is currently leading the race in retail and construction of multi-purpose malls, as some big business houses were taking keen interest, claiming that it would become the key contributor to the national economy.

Retail Leaders Conference: Exponential growth seen in sector

Planet Retail, a global retail forecasting firm in its recent report, has calculated the country’s retail market size to be around $152 billion with an annual growth rate of 8%. However, some local retail experts termed it peanuts when compared to other countries.

“Though the retail sector is expanding rapidly, however, the market still needs maturity which would come through introducing the same culture in second and third tier cities,” said Yousaf Jamshed, Chief Executive Officer of LXY Global, a retail network.

He said that people’s spending power in central Punjab was better than south as almost every family had at least one member working overseas and sending money to them. The currency conversion has increased their spending power and they spend more shopping, Jamshed added. He also claimed that almost 70% of the business of fashion apparel brands was in north and central Punjab.

By 2020: Pakistan’s e-commerce market to surpass $1 billion

Unlike Sindh or Khyber-Pakhtunkhwa, where the retail growth is limited to fewer cities, the sector in Punjab was expanding to many cities, like Rawalpindi, Faisalabad, Multan and Gujranwala, where investments are already under way to establish shopping malls to cater to the needs of those cities.

“People normally opt for such retail centres and malls to boast rather than to fulfil their needs,” noted economist Dr Qais Aslam. This trend is likely to increase as better infrastructure, especially in Lahore, is meant to attract such investments, especially foreign investments. This may allow the economy to grow but the small retail businesses, which are likely not to be able to transform and maintain quality, will suffer, he added.

Published in The Express Tribune, April 27th,  2016.

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COMMENTS (29)

Anne | 5 years ago | Reply So pathetic to see such negative comments from the other side of the border. The fact that Indians trawl through Pakistani newspapers everyday and leave disparaging comments everywhere clearly highlights their insecurity, easily bruised egos and how they can't bear to see any progress in Pakistan. Take care of your own problems first, then criticise Pakistan. Of course, right wing nationalists will deny having any 'problems' and will speak about India's rising status to that of the next 'global superpower'. Please tell me then why citizens of the next 'global superpower' spend so much time on Pakistani newspapers and their articles, leaving negative comments demeaning and ridiculing Pakistani people, their economy, culture, fashion, politics, movies and whatnot. Clearly you must have something better to do than trolling. What an unproductive and immature way to act. Grow up.
Anuj | 5 years ago | Reply @Haji Atiya Oh! I didn't realize Pakistan is way ahead in e commerce race so much so that its several alibabas and amazons at its disposal and already in decline phase after seeing boom period. BTW, what is next coming from futuristic PAK?
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