Retail

Wholesale and retail trade forms the 3rd largest sector in Pakistan after agriculture and manufacturing and the second largest employer, employing around 16% of its total labor force. The retail sector constitutes 33% of the overall service sector in Pakistan and contributes around 18% to its total GDP. The country’s retail industry is valued at USD 42 billion, with retail sales expected to cross the significant milestone of USD 100 billion by 2012 end. Moreover, the sector is expected to have grown by USD 30 billion (i.e. almost 70% of what it is now) by 2015 i.e. in a matter of only 3 years

Strengths

  • Pakistan is the world’s 6th most populous country, and Punjab, it’s most populated province, is the retail investment destination for thousands of local and foreign investors.
  • Nearly 73% of the Pakistani population is below 35 years of age, increasingly become active income earners of society and expanding the middle income class in the country.
  • Defining the middle class as daily income/expenditure ranging from USD 2 to USD 20 per person per day, it is estimated that Pakistan respectively comprises as many as 76.7 million/81.3 million within this category.

Potential

  • Both urban and total population are on the rise in Pakistan, indicating greater demand for, and access to, goods and services.
  • At a broader level, factors likes globalization and liberalization of trade are fueling consumerism in Pakistan. Pakistan’s global imports recorded a significant growth of 14.7% in the FY 2010-11.
  • Easy availability of credit, convenience of online shopping and increased access to social media by small and large retailers are other factors continuously contributing to the growth of Pakistan’s retail industry.
  • Pakistan is becoming home to new retail formats with the progression of time – trending away from traditional retail clusters of small sized businesses and ‘mom and pop’ stores, it is increasingly attracting large international wholesalers like Metro, Makro and Carrefour.
  • Retail developments are also fueling the demand for commercial real estate. Low share forganized retailing, comparatively low real estate rents and growing consumer aspirations are attracting investments in both retail and real estate.

Investment Opportunities

  • Innumerate retail investment opportunities exist in a range of sectors in Pakistan like food, apparel, footwear, health & beauty, consumer electronics, home furnishings etc through independent retailing, franchising, joint ventures and strategic licensing agreements.
  • Lucrative real estate investment opportunities exist in the construction of large shopping complexes in Lahore and other major cities of Punjab with thousands of square feet of floor area to attract international chains, and amenities like escalators, wide corridors/walking spaces, clean toilets and ample covered parking to attract consumers.