Interview with Mr Sibtain Jiwani – (Chief Executive Officer, Smartchoice.pk)
Smartchoice.pk a startup with a vision to be consumer’s first choice in Pakistan to compare insurance and financial products. Mr. Sibtain Jiwani studied Business and Information Technology from The Manchester Metropolitan University (UK).
PAGE: Do the millennial really care about the economy when taking financial decisions?
Sibtain Jiwani: The millennial are impulsive shoppers as this buying leads to instant gratification, they do buy things without giving much thought to it as so much things being marketed are getting more and more specific and wants have become needs, so they are constantly running towards them, so due to this behavior people often consider borrowing or buying on installments to gratify their wishes with direct and indirect marketing since world has become a global village giving more access to information is making the millennial more aware and vigilant but yet, it’s there is still time to inculcate this knowledge and information while making complex decisions. When it comes to making big financial decisions they do think about economy and about the financial conditions at large as they are more cautious cause these decisions will have impact for a longer period as this group has been severely impacted by recession, as it caused record unemployment, affecting young people joining the workplace, as well as a period of economic instability, so before making any financial decision they are more cautious and vigilant so they don’t end up making a bad deal that might haunt them long term.
PAGE: According to your analysis will the expats invest in Pakistan, keeping in consideration the current situation?
Sibtain Jiwani: Yes; considering the better political scenario from almost a decade, better security situation in Karachi and on the other side, GCC countries vets and taxes imposed and the western side of the world becoming unsafe for Asians especially for Pakistanis, another point that will encourage the expats to invest in Pakistan is the recent devaluation of Rupee in the international market as from the investment point of view the assets would be cheaper and returns more lucrative.
PAGE: Will the impact of present uncertainty and ambiguity of the economic scenario will be short term or long term?
Sibtain Jiwani: Let’s hope it would be shorter as expected as we are about to see the 2nd complete political changeover and it will create a definite positive impact as only stable political system can make policies and system, which attracts local and foreign investors, the stable law and order situation is another positive factor and progressive image of Pakistan will make the economic scenario stable in less time.
PAGE: How does it impact the start-ups, since they are primarily looking for people to invest in their ventures?
Sibtain Jiwani: Those ventures seeking international investment are not severely impacted, as international investors are on a constant look-out for emerging markets having potential, having youth as major part of the population and around 2 million having access to smartphones, ongoing tax reforms, betterment in the law and order situation, business policies are becoming favorable, recently we have seen companies investing in auto-industry and there are reports the investors are interested in investing in starts-up which possess the potential of becoming important part of the economy, whereas on the other hand the local investors may not be encouraged much to invest as they are affected by the same situational issues as the start-ups sharing the same economic environment.
PAGE: Tech companies that export, how would it impact those companies?
Sibtain Jiwani: It’s high time for tech companies to sign contracts because of the cost of labor cause of dollar depreciation and government also providing tax subsidies to encourage the growth and IT culture in Pakistan.
PAGE: According to your study what changes are going to be seen in consumer behavior at this time of the year?
Sibtain Jiwani: This time of the year, the change in consumer will visibly be seen in the ratio of big purchases example: Real estate, rather than buying in one go people would go towards borrowing for products like vehicles as the prices of car have increased, behavior towards planned and sudden expenses on smaller level shall remain same, investment made would be more towards safe investment as the interest rate has also increased.
PAGE: Is this situation around this time of the year is going to affect business like Smartchoice.pk?
Sibtain Jiwani: The businesses like Smartchoice.pk also have seasonal impact example in this period, the travel insurance purchase is record high because it’s a primarily vacation season, people have pre-planned these vacations to places like Turkey and Europe now being more accessible, need based items are bought by people regardless of the situation, as the retail segment is constantly growing, we can see some positive impact of the economic scenario, people are getting credit cards to avail discounts on eateries and stores, so now there are more avenues to employ capital rather than investing all together in one thing completely people would prefer it on segments.
PAGE: Is the borrowing and lending business of financial institutions/banks affected by the attitude of people in this present economic situation?
Sibtain Jiwani: Yes, change in economic conditions always create impact on FI’s, increase in interest rate will attract those who has idol money and they want to lend that to FI’s and simultaneously decrease will attract those who needs to expand their business and will be looking for financing facility at a cheaper rate.
PAGE: What are the factors that can improve the consumer confidence?
Sibtain Jiwani: The factors that can improve the consumer confidence is when the consumer feels protected while spending, more and more awareness should be inculcated in the masses about their rights and institutions that help in protecting those rights like Ombudsman, Mohtasib, consumer courts, better law and order situation and political stability would also act as a catalyst in cultivating consumer confidence, events like PSL (Pakistan Super League) and the football matches where international players came to Pakistan also portrays positive image of Pakistan in the international community that also boosts the confidence of people and they feel secure while spending the money as well as investing it in a business.
PAGE: Will it affect online business more than the offline business, when economy is taking downturn?
Sibtain Jiwani: Change is not always popular, as Pakistanis as a nation being impulsive buyers would buy products as they like from a business having offline presence, usually people don’t like waiting but the other side of the coin maybe that if the online business is efficient and cost effective in any presented situation, it may thrive more than offline business at a time as online business is more accessible. Readily available services and a buyer can save few rupees even example: Amazon, eBay, where people are becoming digital immigrants and are cause of the shifting of paradigm from offline to online if the online business model is consistent, maintains quality and customer service is predominant feature of the business than even the downturn in the economy won’t effect it that perversely.