The local retail and economy does not stand to lose all with the arrival of Chinese in retail trade
KARACHI: With the much anticipated entry of Chinese retail chains in Pakistan, there are many apprehensions over the impact that this development may have on existing, locally-owned chains in particular and the manufacturing sector in general.
But some apprehensions relating to the impact on the economy, such as loss of employment and annihilation of local manufacturing, are unfounded and exaggerated. Bulk of product ranges at local retail chains already comprise goods majorly imported from China. With Chinese investment in this sector this is unlikely to change but there have been talks about the government encouraging Chinese investors to set up plants for manufacturing products to market within Pakistan. Ideally, joint ventures are the way to go about it, which implies that the manufacturing sector is bound to gain from the prospects of Chinese investment instead of losing out. Additionally, expansion of retail setups, local or foreign, is likely to create more employment opportunities. The share of retail in domestic employment is bound to increase but it is unlikely that it may come at the cost of other sectors.
It is worth pointing out that many Pakistani retailers are well established in Western and ethnic fashion retail but the consumer hasn’t benefited yet, from the growth of fashion retail. The point to keep in mind is that any competition is expected to benefit the consumer eventually. Regardless, no foreign competitor has challenged local manufacturers and retailers in ethnic retail yet. So the local retail and economy does not stand to lose all with the arrival of Chinese in retail trade.
Muhammad Rehan
Published in The Express Tribune, May 2nd, 2018.
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