The rural sector is booming in spite of violence and troubles in the Pakistan. Pakistan is the agricultural country and largest wheat growing country of Asia. In 2008, prices of wheat, rice, sugar and other basic commodities increased by fifty percent and still on rising. Increase in demand of commodities brings cash to local harvesters. They are spending heavily on luxury items. Items comprising harvesting equipments, cars, bikes, mobile phones, personal-care items, packed branded foods and soft drinks, etc.
According to Economic Survey 2011 of Pakistan, boost in cash crops prices raise the income level of consumers by three hundred and forty two billion rupees in a year. Income level reached at its peak in this year as compared to three hundred and twenty nine billion rupees in the last four years. A bulk of consumer’s income already goes to food and other livings; about twenty percent is spent on personal grooming items like clothes and personal-care products.
Pakistan is the world’s sixth populas country where demand for consumer products boosted to Fifteen Percent in terms of revenue every year. Thirty three billion rupees revenue is generated by investing only three hundred and twenty six million rupees. Overall sale in this category increased by Twenty-Nine Percent. Pakistan’s consumption for packed foods brand is two times larger than India and China in Asian block.
Major beneficiaries of this current rural consumption boom are Honda Atlas, Millat tractors, Pak Suzuki Motors, Engro Foods, Telenor, Nestle, Colgate-Palmoliver, P&G, Unilever Pakistani, Engro Foods, Haleeb Foods, Shezan, Tapal, Shan and others.
Average monthly consumption per person of dairy products in Pakistan is at one hundred and fifty three kilogram as compared to other Asians holding figures at sixty four kilogram India, one hundred and fourth five kilogram Bangladesh and Ten kilogram East Asia. Sale of Fast Moving Consumer Goods (FMCG) rose to Twenty-Nine Percent with an increase in revenue by Seven Billion rupees. According to Bloomberg report, this increase in revenue is entirely came from rural sector. Detergents like the bonus Tristar, Brite and surf excel are priced as low as to boost sales among low-income consumers of the rural sector. Other branded products like shampoo, toothpaste, soaps, oil, and tea are already available in about eleven thousand villages across Pakistan now. Companies are pushing beauty products in rural sector considering the fact that rural sector are the untapped sector of economy regarding beauty products. Telecom sector is also focusing to extend its operation in the rural sector. Mainly, Telenor Pakistan has expanded its operation in rural areas, which already contribute sixty percent of their total sale.
According to Euro monitor of Pakistan, presence of multinational giants like Nestle, P&G and Unilever, companies like Engro Foods, Haleeb Foods, Shezan, Tapal, Shan and others dominate the packed food business. Multinationals carry strong brand identities and target the upper class with premium brands, thus taking their handsome share in value terms. In spite of the fact multinationals are paving the way for novelty by launching new products and promoting them greatly, but national companies win the competitive battle in volume terms as they focus less on expenses and more on consumer base conformist items.
Pakistan continues to face multiple internal and external threats and crises of stagnant economy, shortage of energy and the lack of security. However, it is clear from the consumer expenditure data that Pakistanis are flexible people. It is fully expected that Pakistan to survive the current crises and will begin to thrive again soon.
Servceli | Strategy. Identity. Growth. 