E-commerce challenges tradition

LAHORE: Retail brick-and-mortar markets led by local entrepreneurs are booming in Pakistan due to the growing middle class; but these retailers are being challenged by online retailers, forcing them to go digital as well.

The major fabric producers in Pakistan were first threatened by small fashion designers who introduced and sold limited editions of their designs fortnightly at paid posh dinner parties in posh localities of big cities where ladies from the elite class purchased those new designs that would not be available in the market. These designers did upset the established ladies' lawn producers of the country as they continued to grow in numbers.

The manufacturers of ladies' lawn then started establishing their own retail network. Now commercial locations from larger cities to small towns are full of the retail shops of all major ladies' lawn brands that have now upgraded to sell stitched garments, and their own brands of ladies' bags, shoes, and cosmetics (which they import from China with their insignia printed or embossed). These thousands of retail shops are now competing with small shopkeepers that sell cloth, shoes, cosmetics, or bags. These retail shops are doing good business and flourished even during the worst economic crisis in the country (which is still going).

These retail giants serve the middle class. The lower classes visit small shops in bazaars. Most analysts agree that the majority of the middle class comes from the informal sector. All professionals, such as doctors, engineers, beauticians, textile designers, and others, typically have much higher undocumented income than their officially declared earnings. The traders, who account for 16% of GDP, contribute only 4% in tax revenue. All of these, including the agriculturalists, are major and discerning consumers.

There are quite a few shopping malls in Karachi, Lahore, Islamabad, and other cities of the country. It is worth noting that wealthy Pakistani families with interests in many industrial and service sectors have recently established mega malls. All famous local and foreign brands showcase their products in these malls. These malls also have food courts, children's play areas, and multinational grocery stores. Besides, the parking facilities are adequate.

These retail outlets are threatened by the increasing trend to buy products online. All the famous brands have been forced to offer their products online, where they have to compete with smaller but quality products produced by famous designers.

These designers do not have to bear the cost of retail shops, which are very expensive to establish in posh areas. They outbid the industrial retailers in quick introduction of new designs, though their rates are higher.

Still, these shopping malls, through multiple facilities, give consumers a reason to visit them and reduce the popularity of online shopping. They offer a wide variety of high-quality products under one roof and provide their customers with innovative and memorable customer experiences. They know that products come and go, but there will always be a market for truly remarkable customer experiences. They are aware that holiday shopping creates a sense of urgency. Customers have a limited amount of time to get their gift lists from loved ones and check them off. It's a unique time to entice them with items that are uniquely packaged for any special occasion.