Al-Fatah Comes to Karachi

The launch in late April of Al-Fatah, one of Pakistan’s leading store chains, at the Com3 building in Clifton, Karachi, was a pleasant surprise for shopaholics. The new store is spread across three floors (15,000 square feet each) and provides groceries and related items on the ground floor and home accessories, clothing, cosmetics, electronic appliances and more on the remaining two floors. 

According to Mohammad Sheikh, Director Procurement, Al-Fatah (and the fourth-generation owner of the retail chain), the Karachi store received substantial footfall from customers who took advantage of the launch discounts that were part of the store’s promotions. The turnover can also be attributed to the fact that many people in Karachi were already aware of Al-Fatah, the brand, having visited their stores located in other cities in Pakistan.

A customer, Mrs Najam, says “It is a wonderful experience; the store has spaced-out isles and above all helpful staff, who welcome us with a smile,” as she fills up her shopping basket. This is likely, given that Al-Fatah is an established brand with a good reputation and a retail presence of over 81 years. This has probably given Al-Fatah an edge over newer departmental stores which experienced initial hurdles in gaining customer loyalty. The fact that there was no major advertising campaign to back their launch (except for a few billboards) illustrates how strong the brand image is. 

The story of Al-Fatah goes back to 1941, when Mohammad Ali Sheikh, Mohammad Sheikh’s great grandfather, and his cousins opened Alhamrah Store in Tollington Market in Lahore. After partition, the business was divided and in the seventies, a store in Liberty Market was opened and renamed as Al-Fatah. It was a superstore and its USP lay in the fact that it provided an assortment of imported products (a novelty at the time). As the decades progressed, Al-Fatah began to increase its footprint across Pakistan and today has 30 stores located in several cities, including Islamabad, Faisalabad, Gujranwala, Lahore, Sargodha and Sialkot. 

Although Al-Fatah’s success could be attributed to the fact that they stock international brands and products that may not be available at other stores, it may also have to do with the fact that they have a business model based on three types of stores. 

The first are flagship stores which offer a wide range of product categories, compared to the other two, and include clothing, cosmetics, crockery, electronic appliances, furniture, home accessories, kitchen accessories, linen, groceries, fruit and vegetables, meat and deli products and toys. Al-Fatah has three flagship stores in Lahore and one each in Islamabad and Faisalabad. The second are mid-range stores. These are slightly smaller than the flagship stores and with a relatively smaller selection of goods on offer compared to what is available at the flagship stores (the store in Karachi falls in this category). The third are convenience stores called Al-Fatah Local; their number is rapidly increasing in Punjab where they have become popular general grocery stores. 

According to Sheikh, the reason behind this model was that, “we want to cater to all socio-economic segments and provide them with an enjoyable shopping experience. Al-Fatah is not only for high-income groups.” He adds that part of Al-Fatah’s USP is the fact that they stock merchandise that targets different “pocket sizes”. This means that each section of their stores has products in varying SKUs and price ranges and includes national and international brands. Another strength, in their opinion, is their well-trained staff. The management believes that shopping should be convenient and hassle-free and they train their staff to be friendly, courteous and helpful (each staff member undergoes training to understand the philosophy of the store). 

Given that Al-Fatah has had a presence in Pakistan for a considerable amount of time, why did it take so long for them to open a store in Karachi? Sheikh explains that the company planned to do so as early as 2000, but due to the political instability at that time, they decided to wait. Furthermore, as they did not have experience with consumer buying patterns in Karachi, they conducted pre-launch research to identify growth opportunities and problematic areas. “One of the key problems in the Karachi market was parking so we finally decided on Com3 because it has ample parking space available on the ground level,” Sheikh adds. 

Karachi is also an expensive real estate market and finding a suitable large space (with warehousing available in proximity) was another challenge. Al-Fatah was able to secure warehousing space in the basement of Com3, which is spread across 25,000 square feet and therefore reduces their transportation costs. 

The fact that the competition in Karachi includes names such as Carrefour, ChaseUp, Imtiaz, Naheed and Spar did not deter Al-Fatah as the brand has tackled bigger competitors, such as H. Karim Buksh in Lahore, for years.

The company says the objective is to keep an eye on the Karachi consumer and adapt the store accordingly. A key difference they have noted so far is that unlike in Punjab, consumers in Karachi do not buy in bulk at the beginning of a month. This could be due to lifestyle differences; the majority of people in Punjab live in joint family setups, which entails bulk buying for larger, intergenerational families in perhaps a more organised way. In contrast, families in Karachi tend to be smaller and prefer buying groceries when they need – or want – them. Accordingly, says Sheikh, this consumer trend will steer their marketing campaigns in the future. At present, their advertising is handled in-house, although they are on the lookout for an advertising partner for both social media and traditional media campaigns. 

The Karachi store is only the beginning as there are plans to open others in different parts of the city – research is underway to identify them. If and when Al-Fatah decides to expand in the city, as it did in Lahore (where there are 18 stores), the retail landscape could very well change. Until then, consumers in other areas can order products through the Al-Fatah Online app. 

Sheikh says that customers can expect an even wider range of products within grocery, crockery, toys, clothing, cosmetics and electronic appliances. He is confident that within the next two to three months, customers will experience an “even better stocked Al-Fatah.”