CorporateMarket Segments

FMCG Retail Industry of Pakistan at a Glance

FMCG Retail Industry of Pakistan

Retailing is a process of distribution which involves all the activities of selling the merchandise directly to the final consumer for their personal or family use. Often people view retailing as a means of selling a product available in stores but it also involves the selling of services such as stay in a hotel, a DVD rental or a food delivery. There is also a concept of non-store (online) retailing store in Pakistan which includes exciting sales of home and bedding essentials and other items on daraz.pk or ordering food online through foodpanda etc. [FMCG Retail Industry of Pakistan]

The retailing Industry of Pakistan, with a population of 207 million is constantly changing the life of a common man as a result of growing consumerism in the country. These changes are more visible in urban cities where the superstores are heavily focusing in cosmopolitan cities like Lahore and Karachi. So far the consumer industry of Pakistan has made immense contribution to the economic sector of Pakistan. According to statistics from the Pakistan Bureau of Statistics for the years 2015-16, the retail sector is worth $32.89 Billion, which represents around 18.6% of GDP. There are approximately 2 million retail outlets in the country. Out of these retail outlets, nearly 800,000 outlets represent FMCG channels including ‘kiryana’ stores, ‘pan’ shops (kiosks selling betel leaves and cigarettes), department stores, medical-cum-general stores and the like. There has been a massive growth of 130 per cent in private consumption in the five years (2007-12), even though the GDP growth rate during this period was sluggish.

The latest statistics by an international research group Euromonitor revealed that Pakistan retail market is ready to expand at a fast pace over the next five years, as the country becomes the world’s fastest growing retail market. It further stated that the bulk of this growth is being driven by the country’s huge youth bulge. Almost two-thirds of the population, amounting to around 135 million people, consists of those below 30 years of age, and rising incomes in this segment are paying rich dividends for the retail sector.

In addition, an improvement in the security environment, better infrastructure, transport and auxiliary facilities in major cities of the country, relatively cheap consumer prices and economic expansion at nearly five per cent have also been important contributory factors in the growth of the retail sector.

Many retailers who have been successful enough to transform their businesses into major brands now enjoy loyal customer support, further encouraging the rise of the retail market. According to The Express Tribune, Kim Culley, a Britain-based retail expert feels that “Pakistan is 50 years ahead of India if we compare both countries in infrastructural developments.”

FMCG Retail Industry of Pakistan

Kinds of Pakistani Retail Outlets: The important types of Pakistani Retail outlets include:

FMCG Retail Industry of Pakistan

To conclude, the rapid growth of the FMCG retail sector largely shows the positive areas of the advancement of the Pakistani economy. The progress made by the Pakistan retail market can be seen widely in certain parts of the country. The Express Tribune reports that much of the investment in the retail market has been made in Punjab, and more specifically in Lahore. Pakistan’s economic planners need to understand that the fruits of the rapid growth being practiced by Pakistan retail market are reaped by a large section of the population. This will ensure that economic growth and development in Pakistan is more rapid, long-term and equitable.

References:

PakistanShining

Linkedin Publication

Pakistan Statistical Yearbook 2016


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