Pakistan Middle Class Jumps to 55% of Population

[Riaz Haq]

Majority of the households in Pakistan now belong to the middle class, a first in Pakistan's history, according to research by Dr. Jawaid Abdul Ghani of Karachi School of Business and Leadership (KSBL).

It's an important tipping point that puts Pakistan among the top 5 countries with fastest growing middle class population in Asia-Pacific region, according to an Asian Development Bank report titled Asia's Emerging Middle Class: Past, Present, And Future. The ADB report put Pakistan's middle class growth from 1990 to 2008 at 36.5%, much faster than India's 12.5% growth in the same period.

Source: Dr. Abdul Ghani

From 2002 to 2011, the country's middle class, defined as households with daily per capita expenditures of $2-$10 in 2005 purchasing power parity dollars, grew from 32% to 55% of the population, according to a paper presented by Dr. Abdul Ghani at Karachi's Institute Business Administration's International Conference on Marketing. Dr. Ghani has cited Pakistan Standards of Living Measurement (PSLM) Surveys as source of his data.

Source: Dr. Abdul Ghani, Karachi School of Business

Growing middle class is a major driver of economic growth, as the income elasticity for durable goods and services for middle class consumers is greater than one, according to a Brookings Institution study titled The Emerging Middle Class in Developing Countries.

Among some of the manifestations of the rising middle class, Dr. Abdul Ghani reports dramatic increase in the ownership of television sets, refrigerators and motorcycles in households in all income deciles in Pakistan.  At the same the total household assets have nearly doubled from $387 billion in 2001-02 to $772.6 billion in 2010-11 in terms of 2005 purchasing power parity dollars.

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.

Pakistan's transition to middle-class middle-income country over the last decade mainly during Musharraf years represents a major tipping point for the country's economy. It is likely to accelerate economic growth driven by consumption and draw greater investments in production of products and services demanded by middle class consumers. Some of it is already in evidence in booming sales of durable goods (TV sets, refrigerators, motorcycles) AND non-durables (cosmetics, shampoo, toothpaste, processed foods, etc) in Pakistan's booming FMCG sector.

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Mobile Money Revolution in Pakistan

[Riaz Haq]

Our total consumption of wheat and atta is about 125kg per capita per year. Our per person per day calorie intake has risen from about 2,078 in 1949-50 to 2,400 in 2001-02 and 2,580 in 2020-21

By Riaz Riazuddin former deputy governor of the State Bank of Pakistan.


https://www.dawn.com/news/1659441/consumption-habits-inflation

As households move to upper-income brackets, the share of spending on food consumption falls. This is known as Engel’s law. Empirical proof of this relationship is visible in the falling share of food from about 48pc in 2001-02 for the average household. This is an obvious indication that the real incomes of households have risen steadily since then, and inflation has not eaten up the entire rise in nominal incomes. Inflation seldom outpaces the rise in nominal incomes.

Coming back to eating habits, our main food spending is on milk. Of the total spending on food, about 25pc was spent on milk (fresh, packed and dry) in 2018-19, up from nearly 17pc in 2001-01. This is a good sign as milk is the most nourishing of all food items. This behaviour (largest spending on milk) holds worldwide. The direct consumption of milk by our households was about seven kilograms per month, or 84kg per year. Total milk consumption per capita is much higher because we also eat ice cream, halwa, jalebi, gulab jamun and whatnot bought from the market. The milk used in them is consumed indirectly. Our total per person per year consumption of milk was 168kg in 2018-19. This has risen from about 150kg in 2000-01. It was 107kg in 1949-50 showing considerable improvement since then.

Since milk is the single largest contributor in expenditure, its contribution to inflation should be very high. Thanks to milk price behaviour, it is seldom in the news as opposed to sugar and wheat, whose price trend, besides hurting the poor is also exploited for gaining political mileage. According to PBS, milk prices have risen from Rs82.50 per litre in October 2018 to Rs104.32 in October 2021. This is a three-year rise of 26.4pc, or per annum rise of 8.1pc. Another blessing related to milk is that the year-to-year variation in its prices is much lower than that of other food items. The three-year rise in CPI is about 30pc, or an average of 9.7pc per year till last month. Clearly, milk prices have contributed to containing inflation to a single digit during this period.

Next to milk is wheat and atta which constitute about 11.2pc of the monthly food expenditure — less than half of milk. Wheat and atta are our staple food and their direct consumption by the average household is 7kg per capita (84kg per capita per year). As we also eat naan from the tandoors, bread from bakeries etc, our indirect consumption of wheat and atta is 41kg per capita. Our total consumption of wheat and atta is about 125kg per capita per year. Our per person per day calorie intake has risen from about 2,078 in 1949-50 to 2,400 in 2001-02 and 2,580 in 2020-21. The per capita per day protein intake in grams increased from 63 to 67 to about 75 during these years. Does this indicate better health? To answer this, let us look at how we devour ghee and sugar. Also remember that each person requires a minimum of 2,100 calories and 60g of protein per day.

Undoubtedly, ghee, cooking oil and sugar have a special place in our culture. We are familiar with Urdu idioms mentioning ghee and shakkar. Two relate to our eating habits. We greet good news by saying ‘Aap kay munh may ghee shakkar’, which literally means that may your mouth be filled with ghee and sugar. We envy the fortune of others by saying ‘Panchon oonglian ghee mei’ (all five fingers immersed in ghee, or having the best of both worlds). These sayings reflect not only our eating trends, but also the inflation burden of the rising prices of these three items — ghee, cooking oil and sugar. Recall any wedding dinner. Ghee is floating in our plates.

[Riaz Haq]

About SPAR Pakistan

https://www.dawn.com/news/1551869

SPAR is a supermarket offering fresh fruits and vegetables, fresh meat, grocery and household products with an in-store pharmacy and bakery.

SPAR is an international retail chain with over 13,000+ stores in 48 countries. In Pakistan SPAR Supermarket has 3 stores and has plans to expand across the country.

The store has its presence in two locations in Karachi; one at Alamgir Road, Sharfabad and the other at Miran Shah Road, Muhammad Ali Society/KDA scheme 1. The Faisalabad store is located on Eden Valley Road.

KARACHI SPAR SHARFABAD MS Tower, Alamgir Road, Sharfabad, Karachi SPAR KDASaima Twin Tower, Miran Shah Road, M.Ali Society, Karachi Map linkSPAR NORTH NAZIMABAD Shahrah-e-Humayun, North Nazimabad, Block F, Karachi. SPAR D.H.A PHASE VIII9-C, Lane 4, Phase VIII, Zulfiqar & Al Murtuza commercial area, Phase 8 Defence Housing Authority, Karachi, 75500

[Riaz Haq]

International supermarket chains in Pakistan:


Carrefour (Hypermart) French

Metro Cash & Carry German

SPAR Dutch

Tesco British

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Imtiaz Supermarket local Pakistani chain

[Riaz Haq]

International Fast Food Chain Restaurants in Pakistan



22 – Fatburger

21 – Butlers Chocolate Cafe

20 – Cinnabon

19 – Texas Chicken

18 – CP Five Star

17 – Pepe’s Piri Piri

16 – Uncle Tetsu

15 – P.F. Chang’s

14 – Gloria Jeans

13 – Coffee Bean & Tea Leaf

12 – Nandos

11 – Papa Johns

10 – Hardees

9 – Johnny Rockets

8 – Baskin Robbins

7 – Subway

6 – KFC

5 – Dominos

4 – Dunkin Donuts

3 – Pizza Hut

2 – Burger King

1 – McDonald’s

[Riaz Haq]

Fast food in Pakistan

https://food.tribune.com.pk/en/blog/fast-food-chains-in-pakistan-th...

Fast food is highly appreciated all around the world, including Pakistan where it is eaten by people in all age categories. Desi cuisines are almost equivalent to burgers and pizzas and both are all well-loved for the delicious tastes they have to offer.
Pakistan now has some of world’s most famous fast food chains that are very well celebrated. Here’s a list of some of them:


MCDONALD’S:
One of the most well-known fast food chains in the world, and one that is still expanding is McDonald’s. The first outlet was launched in 1988 in Lahore and soon opened in Karachi a week after. It receives immense love from people here till this day, and is mostly famous for their burgers and fries. It is a must-stop for all fast food lovers as it provides everything from delicious burgers and fries to desserts.

KFC:
KFC launched its headquarters in Pakistan during the year 1997 in Karachi. It is now the second most leading fast food chain in Pakistan having opened its doors all over the country from an expansive menu of fried chicken, burgers and delicious sauces. KFC is and has been serving food with quality and taste all around the world since the beginning.

PIZZA HUT:
One of the oldest and most famous pizza places was founded by two brothers in 1958. This was Pizza Hut which is one of the first renowned pizzerias launched in Pakistan and remains popular till this day.
Pizza Hut now has an exceptionally large menu being served in Pakistan, starting from different flavours and toppings, all the way to different types of crusts. This chain is surely a treat for all pizza lovers in the country.

DOMINO’S:
Domino’s Pizza was founded in Michigan, United States and was previously known as Dominick’s. Dominos have now taken Pakistan with a storm by being one of leading pizza places here, having various branches all over the country.
Their mouth-watering menu consists of delicious pizzas and delightful desserts.

HARDEES:
Hardees is also one of the most favorite fast food places of Pakistan. The chain managed to open branches all around the country due to the immense popularity it gained. They are most famous for their char-grilled burgers and delicious beef burgers along with their mouth-watering sides of curly fries. Hardees is surely making its name in Pakistan’s fast food industry.

BURGER KING:
Burger King first opened their gates in Pakistan in October 2013, and since then have spread all around the country at a fast pace. Their menu consists of various kinds of burgers, fries and salads.
Burger King has everything on their menu to satisfy a fast food fanatic.


This is a complete guide for all fast food lovers in Pakistan. The chains have not only proven their name for quality services and tasty food, but also the ability to expand quite rapidly. With the growing food industry, we surely know the list doesn’t end here so watch out for some more blogs on growing fast food chains in Pakistan.

[Riaz Haq]

Eidul Azha has helped other sections of the struggling market like transporters who shuttle animals from the market to homes; electronics especially deep-freezers; various forms of knives and cutting boards; spices and other things to help cook on the big day; BBQ equipment — skewers and grills — and fuel like coal.

https://www.dawn.com/news/1636294

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Deep freezers sales also saw a strong rebound, rising to 11,732 units in April 2021 from 1,048 units in April 2020 while March 2021 production stood at 7,236 units

https://www.dawn.com/news/1629800/production-of-home-appliances-soars

[Riaz Haq]

Economic Survey of Pakistan 2021-22: Manufacturing

https://www.finance.gov.pk/survey/chapter_22/PES03-MANUFACTURING.pdf

Table 3.8: Production of Automobiles
Category Installed Capacity No. of Units 2020-21(July-March) 2021-22(July-March) %Change
CAR 341,000 106,439 166,768 56.7
LCV/JEEPS/SUV/Pickup 52,000 22,512 32,341 43.7
BUS 5,000 445 459 3.1
TRUCK 28,500 2,509 4,445 77.2
TRACTOR 100,000 36,900 41,872 13.5
2/3 WHEELERS 2,500,000 1,439,535 1,388,669 -3.5
Source: Pakistan Automotive Manufacturer Association (PAMA)

----------------

Table-3.2: Production of selected industrial items of Large-Scale Manufacturing
S# Items Unit Weights July-March % Change % Point Contribution 2020-21 2021-22
1 Deepfreezers (Nos.) 0.167 68,947 84,205 22.13 0.04
2 Jeeps and Cars (Nos.) 2.715 114,617 177,757 55.09 1.41
3 Refrigerators (Nos.) 0.246 928,170 1,024,335 10.36 0.02
4 Upper leather (000 sq.m.) 0.398 13,324 10,966 -17.70 -0.06
5 Cement (000 tonnes) 4.650 37,619 36,543 -2.86 -0.21
6 Liquids/syrups (000 Litres) 1.617 86,212 144,638 67.77 1.30
7 Phos. fertilizers (N tonnes) 0.501 545,612 601,184 10.19 0.06
8 Tablets (000 Nos.) 2.725 20,380,940 14,695,108 -27.90 -0.85
9 Cooking oil (tonnes) 1.476 334,107 370,181 10.80 0.21
10 Nit. fertilizers (N tonnes) 3.429 2,450,066 2,505,757 2.27 0.09
11 Cotton cloth (000 sq.m.) 7.294 786,042 788,285 0.29 0.02
12 Vegetable ghee (tonnes) 1.375 1,087,827 1,060,111 -2.55 -0.05
13 Cotton yarn (tonnes) 8.882 2,577,675 2,594,690 0.66 0.07
14 Sugar (tonnes) 3.427 5,618,976 7,759,825 38.10 2.13
15 Tea blended (tonnes) 0.485 100,566 112,544 11.91 0.06
16 Petroleum Products* (000 Litres) 6.658 - - 2.10 0.01
17 Cigarettes (million No) 2.072 39,473 46,070

[Riaz Haq]

HAIER ANNOUNCES THE LARGEST EXCLUSIVE RETAIL NETWORK OF 300 STORES ACROSS PAKISTAN

https://arynews.tv/haier-retail-network-300-stores-pakistan/


Haier Pakistan is one of Pakistan’s leading home appliance brands, producing high-quality home appliances in many categories.

Haier introduces the best, environmentally-friendly, and innovative products with a wide range in different categories such as Air Conditioners, LED TVs, Refrigerators, Washing Machines, and more.

Haier proudly announces it has the largest exclusive retail network of 300 stores across Pakistan! With innovative and advanced technological solutions, Haier is committed to providing the best home appliances to our customers.

Haier took immense pride in celebrating the inauguration of 300 Haier stores countrywide. To celebrate this milestone, Haier went live from their social media pages on 30th March 2022 at Jumbo Electronics in Lahore.

At the ceremony, Mr. Usama Sultan, Head of Department of Exclusive Dealer Network, kicked off the event and shared valuable information regarding Haier Store Network. He addressed “Today we are gathered on grand inauguration of 300th Haier Store, Largest retail Network in home appliance industry. In Addition to this, we Have 4 smart Homes & 60 Smart Stores where you can experience smart living room, smart kitchen, smart bed room, smart laundry with live demonstration & largest product range. Our vision is to stretch our network in each level/town of Pakistan by targeting 500 stores & transform high-end store to experience store. Our brand store is equipped with ERP Software where you can view sell-in, sellout, financial reports, & manage customers data base. Another milestone is Haier Own Online Platform where all Brand Stores will be integrated online. Be part of No.1 Retail Network & secure your profits even 70% ROI in first year.”

It was later followed by an inspiring words delivered by Mr. Sohaib Rathore, Director Sales. Haier’s sales team shared the details of all products and their specifications to the audience, enlightening them about the products and their usage. The event was a huge success with a mammoth crowd in attendance at the grand celebration. The event was organized at Jumbo Electronics, near the main LOS Stop Near Lahore Center.

Haier Pakistan will continue to stay committed to its loyal customer base and will always be at the forefront in serving the nation with the most advanced technological solutions, for a smarter and better lifestyle.

Haier proudly inspiring lives every day!

[Riaz Haq]

Pak Suzuki breaks sales record
Despite inflation and economic crisis, Pak Suzuki has posted record sales. While on the other hand, Toyota has stopped its booking.

https://www.globalvillagespace.com/pak-suzuki-breaks-sales-record/

Pak Suzuki Motor Company (PSMC) has recorded high sales this year despite economic crisis. According to a recent source, the company broke its previous record of over 15,500 automobiles sold in December 2021 by selling more than 16,000 cars in June 2022.

Reports indicate that the new Suzuki Swift has significantly impacted the total increase in sales, despite the fact that the split of sales is unknown.


Additionally, PSMC is a strong competitor in Pakistan’s small-car industry thanks to its extensive product selection of city automobiles. The firm dominates the automobile industry with a market share of more than 60%.

However, predictions state that by late 2022 or early 2023, sales of all automakers, including PSMC, will likely drop as a result of rising gasoline and vehicle prices. Due to the accumulation of backlogged orders, the sales will continue to be steady for the time being.

Suzuki New Motorcycle Costs
A 7% increase has been noticed in the Suzuki GD110S. Compared to the previous price of Rs. 212,000, the bike now costs Rs. 219,000.

The Suzuki GS150’s price has increased by Rs. 7,000, costing Rs. 239,000 as opposed to Rs. 232,000 previously.

The third motorcycle, the Suzuki GS150SE, now costs Rs. 256,000 as opposed to Rs. 249,000 at the previous price, an increase of Rs. 7,000.

Last but not least, the business raised the cost of the Suzuki GR150 by Rs. 10,000, bringing the new price up to Rs. 349,000 from Rs. 339,000 previously.

As usual, the firm has not provided any explanation for this price rise. These price increases are cruel and unreasonable, especially in light of growing inflation. The general population can no longer afford the “Awaami Sawari.”

What do you think of the recurring monthly price increases for bicycles? Do you think it’s appropriate? Has purchasing a bike altered your spending plan? Comment with your ideas in the space provided.

[Riaz Haq]

Household Appliances - Pakistan | Statista Market Forecast

https://www.statista.com/outlook/dmo/ecommerce/electronics/househol...

Revenue in the Household Appliances segment is projected to reach US$1,765.00m in 2022.
Revenue is expected to show an annual growth rate (CAGR 2022-2025) of 10.07%, resulting in a projected market volume of US$2,354.00m by 2025.
With a projected market volume of US$102,300.00m in 2022, most revenue is generated in China.
In the Household Appliances segment, the number of users is expected to amount to 20.8m users by 2025.
User penetration will be 6.4% in 2022 and is expected to hit 8.6% by 2025.
The average revenue per user (ARPU) is expected to amount to US$120.10.