Global retailers eye Pakistani consumers for big money

LAHORE: Macroeconomic stability and the billions of dollars worth informal economy have encouraged global retail chains to visit Pakistan and assess the local potential.

In this regard, the Retailers Leader Conference would be held in Lahore on Thursday, March 31 (today) under the Chairmanship of Mian Muhammad Mansha. The participants include the CEO of Majid AlFuttaim Ventures Ahmad Galal Ismail; Abhishek Ganguly Managing Partner Puma India, Mehmood Bhatti famous Paris based fashion designer; and Sailesh Chaturvedi CEO Tommy Hilfiger Apparels India.

The economic turnaround in the last three years has encouraged famous foreign brands to come to Pakistan. The GDP growth rate of 4.5 percent and total GDP of $250 billion does not look so lucrative to attract foreign and Pakistani brands to branded shopping malls. However, the retailers base their calculations on the informal economy that is thought to be higher than the formal economy.

So, in fact the retailers are eyeing an economy of $600 billion or more. Most analysts agree that the majority of the middle class comes from the informal sector.

All professionals like doctors, engineers, beauticians, textile designers and others have much higher undocumented income than their officially declared earnings. The traders that account 16 percent of the GDP contribute only four percent in tax revenue. In fact, the entire service sector, barring telecom does not contribute much in the national revenues. All these and of course the agriculturists are big and quality consumers. Better economy and the hope created by China-Pakistan Economic Corridor, all local and foreign brands are positioning themselves for good times.

There are quite a few shopping malls in Karachi, and a few very large malls are in the offing in the city with a population of around 20 million. Two of them are mega malls, one being built by a real estate tycoon and the other by Yunous Brothers, one of the largest business group of the country. Lahore with half the population of Karachi lacks any real branded shopping mall like Dolmen in Karachi and Centauries in Islamabad.

The Mall of Lahore is a mini version, but the city is launching shopping malls of global standards in 2016. The Nishat Emporium owned by Mian Mansha and family would open in June this year. It is by far the largest shopping complex in the country with an attached hyper store and 140 room five star hotels. There is a food court for 2,000 people, play land, cineplex and banquet hall for 4,000 diners.

This shopping mall would be followed by an even fascinating shopping complex by the end of this year. Owned by the Packages Limited, it would perhaps be the largest shopping complex as far as area is concerned. Only famous foreign brands would be showcased in the first phase.

Retail is the process of selling consumer goods and services to customers through multiple channels of distribution to earn a profit. Demand is created through diverse target markets and promotional tactics, satisfying consumers' wants and needs through a lean supply chain. Brand owners realise that consumer power is on the rise and they would have to keep them engaged through innovative designing and marketing. They are devising strategies that are in line with the local culture.

They want to establish their outlets in the futuristic malls. These malls are not meant exclusively for shopping. These are places where numbers of branded food outlets are available; where there are leisure facilities for the entire family. Where children could play and elders have the option to go to any of the six or seven cinemas at the mall.

The affluent consumers would be reluctant to shop in malls where the parking facilities are inadequate. All successful shopping malls established in Pakistan that lack few of these facilities are losing customers to the new malls with better facilities.

These shopping malls through multiple facilities give consumers the reason to visit them and successfully thwart the online shopping trends.