Pakistan’s retail sector has embarked on a growth trajectory that can see the industry become a major hub for growing businesses. Though retailers have existed in Pakistan for a long time, the induction of global brands and outlets has really kick-started the sector forcing local retailers to expand their boundaries to compete with their larger international competitors.
With a rise in disposable income, especially in the middle class, this sector is now flourishing even outside of Pakistan’s mega cities. Pakistan is an emerging market where the size of the retail market is estimated around $42 billion, growing faster than the economy at a rate of 5.3%.
This year seven Pakistani brands were nominated for the first time for the World Retail Awards held in Paris last month, in which three brands were shortlisted. Although none of the brands won any award, this event forced local retailers to think globally to take advantage of such forums.
The sector could possibly be a huge job creator, and attracting foreign investment into Pakistan, attracting global brands to the local market. All that is needed is skilled labour, education, training and a retail body to promote the sector and engage the government. And the stakeholders are thinking of exactly that, joining hands to create a platform to address local issues and to present Pakistan at global platforms in future.
Chief Executive Officer of LXY Global, Yousaf Jamshed, is the man at the head of this initiative to streamline the retail sector.
He has successfully organised two World Retail Congress Pakistan in Lahore, attracting international players to the local market.
“The way Pakistan’s retail market is booming is positive, but some local players need some grooming to represent Pakistan at global platform,” Jamshed said while talking to The Express Tribune.
There is a dire need for training of man power, clearing supply chain issues and other related problems. Though global brands arrange trainings regularly, local chains often fail to do this, he added.
Jamshed said that the institutions are very late in responding to his suggestions of starting such courses. He believes that the coming years will see retail businesses which need qualified and experienced manpower, something which Pakistan currently lacks in both upper management and lower management positions.
“Only 10% of local retailers are doing business with a vision. The rest are able to expand their business but their business models are still old and highly centralized. They are still shopkeepers”, he said.
Many local brands are expanding and have started their business globally by adopting global trends.
The retail segment includes small karyana shops, small and medium scale outlets providing which provide various different categories of products under one roof, big shopping malls and hypermarkets.
The main segment within retail sector seems to be the apparels, which saw large gains throughout the country, and is in need of qualified personnel to operate, according to Jamshed.
A retail association is on the cards, which will streamline many things, said Jamshed. For instance, Jamshed says, there is no proper data of total number of retail outlets in Pakistan. Retailers never disclose about their sales due to taxation issues, they avoid proper training and grooming of their staff.
Jamshed believes that a strong retail body will tackle all these issues, force some quality institutions to include courses on this particular sector, local training workshops and things like this will boost the confidence level of locals, which ultimately would result in global presentation of Pakistan retails sector the potential of which can force many more to foreign brands to start business in Pakistan.
Published in The Express Tribune, November 9th, 2013.