International Consumer Brand Names Find Success in Pakistan's Retail Sector

Consumer spending in Pakistan has increased at a 26 percent average pace the past three years, compared with 7.7 percent for Asia, according to data compiled by Euromonitor International, a consumer research firm. Pakistan's rising middle class consumers  in major cities like Karachi, Lahore and Islamabad are driving sales of international brand name products and services.  Real estate developers and retailers are responding to it by opening new mega shopping malls such as Dolmen in Karachi and Centaurus in Islamabad.

Dolmen City, Clifton, Karachi


Here's a recent video of a CNN report on "British Brand Invasion" from Dolmen Mall in Clifton district of Karachi:



 http://edition.cnn.com/video/#/video/world/2013/04/01/mohsin-bristish-brands-in-pakistan.cnn

Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India over the last two decades. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to an ADB report titled "Asia's Emerging Middle Class: Past, Present And Future.


A string of strong earnings announcements by Karachi Stock Exchange listed companies and the Central Bank's 1.5% rate cut have already helped Karachi's KSE-100 index surge nearly 50% (37% in US $ terms) in 2012 to top all Asian market indices. It was followed by Bangkok's SET index which advanced 36%. It also easily beat India's Sensex index which was the top performer among BRICs with 25.19% annual gain.


Dolmen Mall Clifton Featured on CNN from DHAToday on Vimeo.



Related Links:

Haq's Musings

Pakistan's Construction Boom

Educational Attainment in Pakistan

Pakistan Among Top Outsourcing Countries

Foreign Visitors to Pakistan Pleasantly Surprised

Pakistan's Infrastructure and M2 Motorway

India Pakistan Comparison 2011

Resilient Pakistan Defies Doomsayers


FMCG Consumption Boom in Rural Pakistan

Pakistan Visits Open  Indian Eyes

Comments

Riaz Haq said…
Here's an excerpt of a Reuters' report on Karachi shares market:

The market's benchmark index continues to soar to record highs -- up 10.34 percent year to date -- fueled in part by expectations May elections will mark Pakistan's first transfer of power from one democratic government to another. Previous civilian governments were all dismissed by Pakistan's ultimate power: the military.

"Pakistan has a lot to offer investors and this is our chance to show it," said Nadeem Naqvi, the KSE chairman. He plans to embark on a series of roadshows for potential foreign partners that will take him to London, Frankfurt and Hong Kong in the coming months.

Many of the companies listed on the KSE offer double-digit returns, low stock prices and resilient business models in this frontier market with a population of 180 million. The index still has an attractive price/earnings ratio of $8.50 despite the soaring returns of the past few years.

Pakistan now has a 4 percent weighting in the MSCI Frontiers Market Index and has become somewhat of a discovery for foreign investors chasing new markets and yields.

THE SEAMIER SIDE

But the KSE's spectacular rise last year can at least be partly attributed to another factor entirely - the cleansing of "black money".

The market took off last year just as a government decree was finalized allowing people to buy stocks with no questions asked about the source of the cash. Average daily volume more than doubled last year to 173 million shares from 79 million in 2011.

Authorities say the measure will bring undocumented funds into the tax net in a country where few pay taxes. But some critics decried it as a gift to corrupt officials and criminals seeking to launder dirty cash.

"Politics and dirty money go hand in hand in Pakistan," said Dr. Ikramul Haq, a Supreme Court lawyer and a professor on tax law.

"People want to be outside the regulatory framework and outside the tax net."

-----
The Securities and Exchange Commission of Pakistan (SECP) said it found 23 violations of securities laws that merited fines in fiscal year 2011-12 (April/March). The market regulator sent warning letters in another 19 cases, it said in its annual report. (www.secp.gov.pk/)

That's a drop in the bucket, says Ashraf Tiwana, dismissed as head of SECP's legal department after years of clashes with his bosses over fraud in the market. He has petitioned the Supreme Court to replace the SECP chairman and commissioners.

"There's a lot of fraud, a lot of market manipulation ... but not enough action has been taken, especially not enough criminal action has been taken," Tiwana told Reuters. "They're just passing small fines and giving out warning letters."

Regulators are too close to the market, Tiwana said. The head of the stock exchange is a former broker and the two top members of the SECP are former employees of Aqeel Karim Dhedhi, founder of one of the country's biggest brokerage houses.

BIG DHEDHI

Nicknamed "Big Dhedhi" for his ability to move markets, Aqeel Karim Dhedhi heads one of Pakistan's largest domestic conglomerates, the AKD Group.

Lately, the well-known philanthropist and leading member of Pakistan's business establishment has been trying to fend off arrest over allegations of insider trading.

An SECP investigator accused traders, including Dhedhi's brokerage, of buying shares in a state-run Sui Southern Gas Co before an official announcement allowing the company to raise its prices. In the weeks before Sui Southern's announcement, the stock price jumped from 13.5 rupees to 20 rupees, its biggest hike in five years.


http://www.reuters.com/article/2013/04/09/us-pakistan-stockmarket-insight-idUSBRE93813Z20130409
Riaz Haq said…
Here's a Daily Times report on PUMA shoe store in Karachi:

KARACHI: PUMA, a leading International sports brand on Friday launched a new outlet in Dolmen Mall, Karachi. This outlet is so far the biggest one in Pakistan out of a total of four in the major cities of the country, Karachi, Lahore and Islamabad. PUMA Pakistan’s inception was in 2010 and the brand is incorporated under the leadership of Atif Husain and Shahid Choudhary with a vision to develop international retail landscape in Pakistan. PUMA designs and develops footwear, apparel and accessories. It is committed to working in ways that contribute to the world by supporting creativity, sustainability and peace, and by staying true to the principles of being fair, honest, positive and creative in decisions made and actions taken.

http://www.dailytimes.com.pk/default.asp?page=2013%5C06%5C15%5Cstory_15-6-2013_pg10_2
Riaz Haq said…
Here's an ET report on global consumer products' giant P&G's expansion plans in Pakistan:

KARACHI: Procter and Gamble (P&G) has identified Pakistan as one of its top 10 emerging markets – that include emerging economies like Brazil and India – and the country will be the focus of it attention for further investments, P&G Pakistan Communications Manager Omeir Dawoodji told a group of journalists during a visit to the company’s state-of-the-art manufacturing facility at Port Qasim on Thursday.
Dawoodji was tight-lipped regarding the amount P&G plans to invest. He, however, confirmed that the Cincinnati, Ohio-based consumer goods giant wants to expand its manufacturing footprint in the country.

Dawoodji did not disclose the cost of setting up the Port Qasim plant, currently manufacturing the Ariel brand, but emphasised that P&G intends to make it a mega-manufacturing facility and utilise it for manufacturing other brands as well. The company markets over 300 brands globally, but its Pakistani subsidiary only deals in eight brands.
P&G Pakistan had acquired a huge piece of land for the manufacturing facility, which was inaugurated in 2010, but it utilised about 20% of the acquired land only, leaving enough space for further expansion.
It has been 185 years of growth for the now $85-billion company and further growth has to come through emerging markets, Dawoodji said, explaining why Pakistan is important for the company’s global parent.
The manufacturer of some of the leading brands like Pampers, Always and Safeguard has had tremendous growth during the past three years. P&G’s revenue for the year ended June 2012 was Rs22 billion, about 50% increase over the previous year.
The fiscal year 2012-13, too, will be a high growth year for P&G Pakistan, the company’s country head Faisal Sabzwari told The Express Tribune in a recent interview.
In a sign of its long-term commitment to the country, the Pakistani arm of the consumer goods giant has replicated its global strategy of incorporating the use of renewable energy sources for energy conservation, reducing water consumption and recycling the waste as demonstrated during the plant’s tour.
The facility at Port Qasim has been designed to use skylight during the day with a lot of windows built both in the office and the factory areas. They have been able to reduce their energy consumption by 12% during the last two years, the officials at the site told the media.
The reduction in water usage was about 46% as they have planted palm trees and used gravel instead of grass for the landscape to conserve water. “We put less than 2% of our waste to landfill,” an official said. About 97% of the waste generated is put to beneficial reuse, he said.
“The Port Qasim plant is our pride among the 75-plus plants P&G operates all over the world,” Dawoodji said while highlighting state-of-the-art features of the plant. “Goods manufactured at this facility can be exported to countries with rigorous quality standards.”


http://tribune.com.pk/story/566034/procter-and-gamble-lists-pakistan-among-top-10-emerging-markets/
Riaz Haq said…
Here's an ET story on middle class powering FMCG growth in Pakistan:

Procter & Gamble (P&G), one of the world’s largest consumer goods company, has recognised Pakistan as one of the top 10 emerging markets to focus investment in. This sounds like good news for our cash-strapped economy, and it is equally good news for those who have invested in P&G.
It makes sense for any fast moving consumer goods (FMCG) to invest in a country where the world’s biggest consumer goods names – Unilever, P&G, Nestle and Mondel-z (formerly Kraft Foods) – are not only operating, but also growing significantly.
According to the State Bank of Pakistan, the net profits of FMCG companies listed on the Karachi Stock Exchange grew in excess of 20% in fiscal year (FY) 2011-12. P&G, which is not listed on the KSE, has witnessed tremendous growth in revenues during the past three years – including 50% revenue growth in FY2012. Besides the consumer goods sector, its supporting industries like packaging and distribution companies have also seen their toplines grow significantly.
So what are the factors contributing to this growth?
If the fact that these companies are selling essential food items and consumer goods in the world’s sixth-largest market by consumer size is not satisfying enough for you, here’s a more detailed and nuanced explanation.
“Economics and demographics are together at play in Pakistan,” P&G Pakistan Country Manager Faisal Sabzwari told this correspondent in a recent interview. The boom in the rural economy has also been a major contributor to their growth – thanks to a series of bumper crops of agricultural produce and wheat support prices, which were raised by the government in recent years.
Besides this, according to Sabzwari, Pakistan is one of the top countries adding 20-somethings to its workforce; these are the people establishing families, getting new jobs and helping market sizes grow.
“We have millions of consumers entering independent disposable income space in their lives every year,” Sabzwari said, while referring to the growing middle class.
The market size in Pakistan has also grown in terms of volumes, without taking pricing into account. “Increasing urbanisation and the growing middle class are key drivers of the FMCG business,” Sabzwari said.
Pakistan’s is urbanising faster than other developing countries, according to Sabzwari. “The country’s population is growing at under 3%, while the rate of migration to urban centres is even higher,” according to Muzammil Aslam, managing director at Emerging Markets Rsearch.
“A population base of 180 million talented and hard-working people hungry for prosperity ensures that nothing can hold this country back from growing,” P&G Pakistan’s chief said. While looking at the growing middle class, he said, it is important to look at their consumption habits. “We are exposing more consumers to value brands like Pampers and Always,” he explained.
It may be added here that consumer spending in Pakistan has increased by an average of 26% in three years, according to a Bloomberg report published on November 21, 2012 – a strong sign that people are consuming more goods than ever before.
This rise in consumer demand has spurred the growth of supermarkets across major urban centres, which include, but are no longer limited to Karachi, Hyderabad, Multan, Lahore, Faisalabad and Islamabad.
Such superstores are getting larger and asking manufacturers for broader brand portfolios in order to serve their customers better. They have larger shelves, enabling them to have more sophisticated and developed categories in which they can stock more products than ever before....


http://tribune.com.pk/story/567315/in-resilient-pakistan-emerging-middle-class-powers-fmcg-sector/
Riaz Haq said…
International shoe manufacturer and retailer, Clarks, entered Pakistan by launching its first ever store in Karachi on April, 11. The expertly crafted footwear is now available at The Forum mall. The stores are also being opened up in Lahore and Islamabad.

The brand has a unique heritage of almost 200 years in remarkable shoe design. Shoeaholics, both men and women, will get finest retail experience with the brand’s signature collections and styles. Nancy Huang, C&J Clark International President of Asia Pacific, said, “It’s always great to see a new store open, especially when it’s in such a good position within a premium shopping mall. The Pakistan team and our partners have done a magnificent job in setting up the store. We are in great company here; this mall is an impressive shopping destination with a fantastic mix of brand names and customers. We are delighted to be a part of it.”

The brand is also well-known for its celebrity clientele and collaborations with high-fashion designers. It has been successful in becoming the leading shoe company in the UK and a global business in over 100 markets worldwide. With their latest franchise in Pakistan, the brand intends to penetrate the markets and set impeccable shoe-trends.

One of the leading groups in the textile industry, Umer Group of Companies is behind the successful launch of the franchise. The store was inaugurated by the acting Deputy High Commissioner of the British High Commission Gillian Atkinson. The event was followed by a fashion showcase. Sleekly styled, renowned models adorned the latest in-store collection.

Published in The Express Tribune, April 15th, 2015.

http://tribune.com.pk/story/869796/british-footwear-steps-into-pakistan/
Riaz Haq said…
#Dubai's Abraaj invests in #Pakistan #cinema operator; Plans to build 80 new screens in next 4 years. #FDI #Theaters

http://www.arabianbusiness.com/industries/banking-finance/380400-dubais-abraaj-invests-in-pakistan-cinema-operator

Dubai-based Abraaj Group has announced it has invested in Cinepax Limited, Pakistan’s leading cinema operator.

With Abraaj’s investment, the value of which has not been disclosed, Cinepax plans to develop 80 new screens across multiple locations over the next four years and also grow other entertainment related ventures, Abraaj said in a statement.

Arif Baigmohamed and Pir Saad Ahsanuddin established Cinepax in 2006 and launched their first multiplex in 2007. Since then, the company has established itself in the market and today has 29 screens in 12 locations.

Pakistan’s entertainment industry has significant growth potential, with a low ratio of cinema screens (0.5 per million population).

Abraaj said it will support the company in establishing international standard multiplex cinemas in new and upcoming areas.

Omar Lodhi, partner for Asia at The Abraaj Group, said: “Our investment into Cinepax demonstrates our faith in the opportunity that Pakistan’s young growing population and expanding middle class represents.

"As one of the most active investors in Pakistan, with a strong on-the-ground presence, we see a long-term market opportunity in the cinema operator and video streaming business.”

Arif Baigmohamed, chairman of Cinepax, added: “We are delighted to welcome Abraaj as an investor into our business and look forward to partnering together to reach more people across the country, providing much needed entertainment options.”

The Abraaj Group has been present in Pakistan since 2004. This transaction marks Abraaj’s ninth investment into Pakistan across a number of sectors including healthcare, power distribution, renewable energy and industrials.
Riaz Haq said…
THE EXPRESS TRIBUNE > PAKISTAN > PUNJAB
First Baskin-Robbins store opens in Lahore

By Our CorrespondentPublished: October 12, 2017

https://tribune.com.pk/story/1529378/first-baskin-robbins-store-opens-lahore/

One of the world’s largest chain of ice cream stores, Baskin-Robbins has opened its doors in Lahore.

“We’re delighted to open our first ever Baskin-Robbins store in Pakistan, and share our range of delicious ice cream flavors with the people of Pakistan,” the Vice President of Dunkin’ Brands International, John Varughese said in a statement.

“Our store will become the place to be where our visitors will make many happy moments with their friends and family, while enjoying our delicious ice creams and other tempting frozen treats.”

The ice cream store will feature flavours available internationally, including classics like Pralines ‘n Cream, Jamoca® Almond Fudge, Mint Chocolate Chip and Very Berry Strawberry and regional favorites like Mango Tango and Tiramisu.

AHG Flavours, which had announced obtaining licence for and opening of 35 Baskin-Robbins stores across Pakistan, expressed excitement at the launch.

“We’re excited to officially bring the world famous Baskin-Robbins brand to Pakistan, along with its range of premium ice creams and innovative ice cream treats,” the company said. “We look forward to this shop becoming an integral part of the local community, and to opening many more locations across Pakistan in the months and years ahead.”
Riaz Haq said…
What Makes a Pakistani Brand Iconic?

https://aurora.dawn.com/news/1144602

Twenty-four percent of the respondents named Shan, followed by Khaadi and Rooh Afza (21% each), Tapal (19%) and Dalda and Pakola (10% each). (Other popular brands included Coke Studio, HBL, MoltyFoam, National Foods and Sooper.) With the exception of Khaadi, all these brands are FMCGs. And except for Shan and Khaadi (they were established in 1981 and 1998 respectively), they have been around for as long as Pakistan has existed, give or take a few years. Rooh Afza was established before Partition, Tapal and Dalda in 1947 and Pakola in 1950 followed by Dalda in 1952. The fact that these six are among Pakistan’s oldest brands may have to do with their popularity.

Iconic Now, Never or Soon?
However, another observation is the fact that as far as both questions are concerned, there was no big winner that captured over 30% of the responses, let alone a large majority (over 60%). Furthermore, two of the brands described as iconic in our first question – Shan (24%) and Khaadi (21%) – were also thought to have the potential to be iconic in the future (question two) by 14% and 13% respectively. Similarly, Tapal was considered iconic by 19% while six percent of the respondents thought it could be iconic in the future. These correlations indicate that agency and corporate heads are not obviously in consensus when it comes to naming iconic or emerging brands, as well as the fact that perhaps products, rather than brands, are dominating the landscape. Atiya Zaidi, MD & ECD, BBDO Pakistan, opines, “Instead of brands, I would say the two most iconic products to come out of Pakistan are Pakola and Rooh Afza. It is ironic that both are still products and never focused much on brand building. A huge opportunity is there for both to work on brand love and be relevant to the times.”

A Lack of Consistency – The Hallmark of Any Great Brand
Aurora also spoke to several advertising and marketing professionals and many of them, who spoke off the record, were not surprised that no brand emerged as a ‘big winner’ and attributed this to a lack of consistency in their messaging. This, in turn, brought forth another set of factors. One of them was the fact that for many organisations, the priority seems to be increasing sales and revenue rather than building brand love. However, shouldn’t it be the priority? Uncountable studies have shown the relationship between brand love and recall and sales. As Sheikh Adil Hussain states in What Makes a Pakistani Brand?, “Les Binet and Peter Fields in The Long and Short of It, talk about the 60:40 Principle, which says 60% of spending should go on long-term brand building and 40% on short-term tactics, which will result in better sales performance.”

Another factor to emerge is a lack of brand custodians on the agency and clientside – in other words, “marketing leadership” – who understand the brand’s ethos and want it to remain consistent. This could be because professionals on both sides hop frequently and replicate the ideas they already used at their previous organisation without keeping in mind the brand’s ethos and values.


Popular posts from this blog

Pakistani Women's Growing Particpation in Workforce

Pakistan's Saadia Zahidi Leads World Economic Forum's Gender Parity Effort

Pakistan Among World's Largest Food Producing Countries