Waiting outside her son’s school to pick him up, Afshaan, aged 42, browses through an array of clothes from the new collection by a local brand on her smartphone. Instead of placing an order and proceeding to checkout, she adds it to the shopping cart, so she can check them out when she has the chance of visiting the outlet in the coming days.

The above scenario sums up the transitional phase experienced by most Pakistanis living in urban areas that are shaped by a complex mix of demographic, cultural, economic and technological factors. It also reflects the adoption of technology while remaining indecisive about its utilisation. With mounting pressures to balance work and life, consumer behaviour and buying patterns are changing; multitasking, along with the quest to find convenient solutions that both save time and offer value for money, sum up the dilemma faced by modern consumers.

Although the majority of the population in Pakistan relies on conventional means of shopping by visiting shops and stores, there is a growing trend (especially in urban areas) focused on modern solutions driven by the socio-economically advantaged, who also happen to be the major contributors in terms of spending. An evolving gender role is another aspect defining lifestyles and consumption patterns. The need to manage and prioritise day-to-day tasks has never been so important. With more and more women joining the workforce, household setups and lifestyles are changing to adapt. This in turn, reflects how consumers make decisions regarding necessary, discretionary and luxury spending. The Nielsen Quest for Convenience Report (covering the second quarter of 2018), explores changing consumer needs and highlights the rapidly growing demand for convenience. About a quarter of Pakistani consumers say that they seek out products that make their lives easier (26%) and are suitable for small households (24%); about one in five are looking for products that are convenient to use (20%).

Consumption patterns that a few years ago were limited to the few, are becoming more embedded in today’s lifestyles. Eating out or ordering food, an activity largely limited to special occasions, has seen a sharp increase. The demand for convenience has given rise to a slew of life-simplifying products such as quick-to-prepare and on-the-go meals, home delivery offerings and tech-driven, on-demand services. Almost a quarter (24%) of Pakistani consumers use restaurant or meal delivery services or grab-on-the-meals from quick-service, fast food and street vendors. Dinner is the meal most likely to be substituted with an out-of-home dining option, with 24% online consumers opting to eat out on a weekly basis and 38% on a monthly basis.

Pakistan as a developing country with a very large, tech-savvy, young population is expected to adopt emerging e-commerce trends. The fact that the rural areas are still fairly isolated may explain why 24% of consumers strongly agree that internet connectivity is a barrier to online shopping and 37% somewhat agree.

Given the growing e-commerce sector, the Nielsen Future Opportunities in FMCG E-commerce Report examines the current growth drivers of FMCG e-commerce in 34 markets and estimates that global online sales will be as high as $400 billion by 2022. Pakistan as a developing country with a very large, tech-savvy, young population is expected to adopt emerging e-commerce trends. The fact that the rural areas are still fairly isolated may explain why 24% of consumers strongly agree that internet connectivity is a barrier to online shopping and 37% somewhat agree.

The rise of e-commerce is providing exciting growth opportunities for thousands of companies of all shapes and sizes; from major corporate players to local start-ups, especially in the urban areas and Pakistan is no exception, with success stories such as Daraz and Shophive. Moreover, people are increasingly switching to apps such as Careem, Uber and Foodpanda due to their range of convenient features and their promotional deals and discounts. According to the Report, internet and smartphone penetration, especially in the urban areas, has significantly facilitated the growth of certain categories with fashion, travel and IT accounting for the largest proportion of online transactions (40%, 31% and 29% of consumers respectively purchasing from these categories). The Report further highlights that categories posting significant growth in e-commerce activity include restaurant deliveries, beauty and personal care products and books and music (24%, 22% and 28% of online consumers said that they made a purchase).

Another aspect shaping consumer behaviour is the awareness about making informed decisions by weighing the benefits of different options. As more consumers become aware of health issues and life-simplifying options, they tend to go for choices that are healthier, more convenient and cost-effective. As a result, some businesses have started to market and package their products and services in a way that promotes their health and safety benefits. For example, many leading companies have started to highlight the nutritional value of packaged food by communicating health-related facts through various strategies. This is further reflected in the way personal care has become a prevailing trend. According to the Report, categories witnessing growth at MAT (Moving Annual Total) are face creams (+17%), baby diapers (+62%) and mineral water (+21%). The growth of these categories sums up how health, personal care and convenience have become more pronounced in recent shopping trends.

People are increasingly switching to apps such as Careem, Uber and Foodpanda due to their range of convenient features and their promotional deals and discounts. According to the Report, internet and smartphone penetration, especially in the urban areas, has significantly facilitated the growth of certain categories with fashion, travel and IT accounting for the largest proportion of online transactions (40%, 31% and 29% of consumers respectively purchasing from these categories).

Despite all this, cost remains a major concern. The dilemma to opt for choices that allow them to reach a balance between healthier and cost-effective products and services remains for most consumers. The third quarter 2018 Conference Board® Global Consumer Confidence Survey revealed that consumers remain vigilant in their spending intentions due to anticipated price rises amid high oil prices, uncertainty regarding trade, falling exchange rates and possible rises in borrowing costs translating into a more prudent attitude toward spending in the coming months.

The Report also lists the factors that may affect consumer buying decisions. Thirty-one percent of consumers are concerned about job security, 24% about the economy and 22% about health; findings which suggest that consumers’ top concerns revolve around a mix of socio-economic considerations.

Commenting on the overall market scenario from a research perspective, Quratulain Ibrahim, MD, Neilsen Pakistan, says that “the uneven pace of development and technological advancement (displaying a sharp contrast between urban and rural areas), combined with evolving demographic and socio-economic dynamics, present a complex yet interesting scenario for consumers and businesses. Businesses will have to constantly look for areas of growth within these changing dynamics by planning go-to-market strategies and product innovation. As far as consumers are concerned, good value for money along with convenience will define future spending trends.”

Fatima Abbas is Manager Marketing & Communications, Nielsen Pakistan.
fatima.abbas@nielsen.com