Greater accessibility gives consumers more choice

Introduction of mega retail stores like Makro, Metro and Hyperstar have led to change in consumer spending patterns.

KARACHI: The introduction of mega retail stores like Makro, Metro and Hyperstar have led to a significant change in consumer spending patterns. Greater accessibility to a diverse range of products gives buyers more options to choose from, according to the managing director of Anjum Asif Private Limited, Anjum Nisar.

In an exclusive interview with The Express Tribune, Nisar shared that sales of tinned fruits have also increased as Pakistani consumers have welcomed them to Ramazan menus.

With particular reference to Del Monte, a product line his company distributes across the country, he said that tinned fruits typically witness a rise in sales of 30 to 40 per cent during the month of Ramazan.

Nisar has renowned names like Del Monte, Langnese, Corolli and Dilmah in his kitty as his company holds the exclusive distribution rights of all these brands in Pakistan.

“About three years ago, hypermarkets were introduced in the country and sales to these markets account for seven per cent of total sales,” he disclosed.

He was hopeful that this figure could be taken to 15 per cent of total sales by next year, adding that the number of outlets that stack these brands is also expected to go up in coming years.

Is it possible?

Importers of edibles have to pay 90 per cent duty on the total value of the product, cost and freight included, which is the highest amongst developing countries, he explained.

“This means that if a product is costing me a dollar, I have to pay 90 cents in taxes. Then there are administration costs, marketing costs and so on. Last year this duty was 55 per cent,” he added.

According to him, the end cost to the consumer is very high because of this, which in turn is a threat to the company’s market share.

Nisar agreed that these duties were in place to protect local industries and brands but complained that the competition was, by no means, fair.

Genuine importers face issues of parallel imports and smuggling from Afghanistan and the United Arab Emirates, therefore it is very difficult for them to work under legal channels. “High duties are an incentive for smugglers to bring in the same products through the red channel,” he said.

When Nisar started off some 25 years back, the government had recently eased restrictions on the import of consumer goods. “I contacted Langnese to apply for distribution rights here in Pakistan simply because we used the product at home. I was young and this was my first hand at business,” he reminisced.

Published in The Express Tribune, August 27^th, 2010.