The company to retailer relationship in Pakistan is a complicated one because there are so many issues and concerns that still exist at the retailer level even today. Various MNCs dealing in FMCGs are doing quite well in this regard but their heavy reliance on the distributors affects their direct relationship with the company. In a similar manner, distributors are also facing a number of issues because they have to use the bypass strategy in order to facilitate all the concerned parties. Since the retail sector is not organized, there are various limitations that have surrounded the local retail companies. They fail to gather relevant data about the market because of small scale operations and limited resources.
The current scenario of the retail sector demands a new player bridging the gap between the company and the retailers.
Other factors that affect the relationship between the company and the retailer is the lack of functional expertise in terms of supply chain and communication. The needs and requirements of a retailer can only be addressed if the company is in direct relationship with the retailer. As a matter of fact, people are not really in touch with retailers at the level where they should be. Regardless of the mode of business, companies need to get in direct contact with retailers through technological innovation in order to facilitate them in a proper manner.
According to a survey, organized retail penetration is almost 5% in Pakistan. The limitations occurred due to the lack of communication between the company and the retailer are hampering the growth of the retail sector in Pakistan.
Companies are doing quite well in terms of the production of new products but the product is not distributed in a proper manner. If a specialized product is introduced, it fails to make an impact the way it must because the retailers at the lower level are not trained and skilled. They are not qualified and the companies are not doing well enough in order to deal with this issue. This means that there is a lack of understanding between upper management and lower management.
There are nearly 14,000 retail companies with about 900 MNCs working across the country.
Another important fact in this regard is the role of the government. The government is not fully involved in the retail sector and it has not patronized the sector. The retail sector must be streamlined with the efforts of the companies, retailers, distributors, and the government. The retailers working at a small scale must be financially supported in order to join the expanding retail sector.
An innovative body must be established in order to add more flow and regularity between the company and the retailers.
This innovative body will bridge the gaps like streamlining the supply chain process and effective complaint handling. Companies would know about the stock and the products being delivered. In case of late or no delivery, the retailer would be able to contact the company easily so that timely resolution can be provided. Local trainers must be groomed by to represent Pakistan at global platforms and this cannot only be done by the company or the government.
In addition, the companies must have proper training sessions for retailers when they are about to introduce specialized products. One needs to understand that sales promotion strategies would only work if the retailers are totally aware of the company policy. Therefore, it is essential for the companies to stay in touch with the retailers in order to have a proper execution of their objectives and a mechanism needs to be introduced in order to have an organized retail system in the country that would ensure the effective company to retailer relation.