Retail
It wasn’t until the mid to late nineties that Pakistan witnessed thebeginning of what would later be termed ‘mall culture’, with theopening of Pace in Lahore in 1994 and Park Towers in Karachiin 1999.
Prior to this, there was Agha’s in Karachi (the favourite shoppinghaunt of the elite) and then there were the ‘plazas’; Liberty Marketin Lahore, while in Karachi, Bohri Bazaar was supplanted by TariqRoad as the premier shopping hub. In between, there was the lawnrevolution, with designers exhibiting their creations at five-star hotels(an early version of the ‘pop-up’), drawing in hordes of avid shoppers.Not surprisingly, the fashion houses were among the first to spot theopportunities that came with displaying their creations in air-conditionedretail spaces, and were among the main drivers of customer footfall.As consumers took to mall culture like ducks to water, they spreadacross Pakistan’s two- and three-tier cities, moving from shoppingexperiences (fashion, electronic appliances, home appliances) to fullonfamily leisure and entertainment hangouts, with food courts, cinemahalls, play areas and gaming zones.
One of the primary beneficiaries of mall culture were thehypermarkets, many of which are located within malls. When Aurorapublished its retail cover in January-February 2012, titled TheSupersizing of Modern Retail, the sector was worth between $14and 16 billion. This was also when global chains such as Carrefour,Metro and Makro entered the market. By 2017, the value of Pakistan’sretail sector was estimated at $152 billion, as per Planet Retail (aglobal retail consultancy), making retail the third-largest contributorto the economy, accounting for 18% of total GDP, and the secondlargestemployer after agriculture. A by-product of modern retail on theeconomy was that until then it was unorganised and undocumented(it remains mostly so), and it can be argued that modern retail, alongwith the introduction of bar codes in early 2000 and the spread ofcredit card payments, has helped document the economy.Modern retail today goes beyond the mall, and if fashion houseswere the making of mall culture in Pakistan, groceries underpinned thesuccess of modern trade. By 2018, Nielsen estimated that were nearly600,000 grocery outlets in Pakistan.
Along the way, there have been hits and misses, and compared toa decade ago, many malls have surplus space for rent, while manygrocery stores have come and gone. This is largely a function of afragile economy – particularly, Covid-19, the economic crises of 2022and 2023 and the popularity of online shopping. For context, accordingto the State Bank of Pakistan, the number of registered e-commercemerchants in Pakistan increased from 1,707 in 2019-20, to 3,003 in2020-21 – a 76% increase, making Pakistan the 46th largest market fore-commerce, with a revenue of $5.2 billion in 2023.
What this means for the retail sector in future is an open question.Shopping and eating are prime leisure activities for most consumers,and this trend is unlikely to change. What may change is how Pakistanisbuy their stuff.
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