ALBARI is the
Marketing Manager of Samsung Electronics, a leading Korean multinational
engaged in marketing home appliances in Pakistan. Born and raised in
Karachi, Ehtesham completed his Bachelors in Science from the DJ Science
College from where he also did his Intermediate. After the graduation he
decided to get a professional degree and did MBA from the prestigious
Institute of Business Administration Karachi. He started his career in
1996 as Marketing Manager with LG Electronics, another Korean
electronics giant and later joined Crescent Leasing as Head of Consumer
You have been engaged with consumer financing throughout your career.
How do you view the potential of consumer financing in Pakistan?
ALBARI: Pakistan's huge population offers an immense potential for consumer
financing, particularly as it remains an untapped market still. The
government has realised the important role it can play to improve the
quality of life in a country reeling from low per capita income and
declining purchasing power. The central bank, the State Bank of
Pakistan, has recently asked the financial institutions and banks to
earmark a substantial portion of their funds towards consumer financing.
It has also allowed the leasing companies to get engage in consumer
financing. The measures aim to provide people an easy access to
How easy access to consumer financing benefit the economy?
ALBARI: It will help the economy in a number of ways. The easy access to
financing would help the salaried and middle-income segments of the
society to buy home appliances and electronics goods on affordable
installments. This in turn will help the industry and trade to find new
sales avenues to develop economies of scale. It will help the government
to earn additional revenues. It would also help in the documentation of
the economy as bank statements and verification will be a prerequisite
for the approval of financing. It will help develop a new consumer
culture in the country.
ALBARI: There has always been huge potential for the growth of consumer
financing but till recently it was just not available. It will help
induct a personal credit culture on the one hand and the development of
financing in the organized sector on the other to offer easy access to
fuel industrial and trade activities. Home financing also allows the
bank find a market which is extremely receptive in particularly at a
time when they have substantial funds to provide and shortage of mega
How big is the market of home appliances in the country?
ALBARI: We estimate the demand for television sets in the country at 650,000
unit per annum. The demand for refrigerators is around 350,000 units per
annum, washing machines around 30,000 units per annum, vacuum cleaners
around 20,000 units per annum and microwave ovens around 50,000 units
per annum. The annual demand for window-type air-conditioners is around
60,000 units per annum while that for the split air-conditioners stand
at around 40,000 units per annum. While in term of quantity the
television is the largest selling electronic item in the country, in
term of value the air-conditioner is the biggest revenue earner. Thus
all the companies marketing consumer appliances in the country view
air-conditioners as core product.
How reasonable are the mark-up rates?
ALBARI: They are reasonable. For instance, we finance our
products through three different financial institutions- Crescent
Leasing, Habib Bank and PICIC. The first is offered through a network of
12 designated dealers in Karachi and we will be introducing the scheme
in Islamabad also later this month. We have agreements with the Habib
Bank and PICIC to finance our products through the designated branches
of their wide network nationwide. The mark-up rates for all these three
schemes, in general, range between reasonable 9 to 10 per cent. In
addition, the prices of consumer appliances usually register an average
increase of about 10-15 per cent every year and this affordable mark-up,
thus, neutralises the impact of any and all such increase.
The Afghan Transit Trade took a heavy toll on the consumer appliances
and electronics goods in the country in not too distant a past. How are
the things at present?
ALBARI: The tightening of the border has brought smuggling to a trickle for the
benefit of the legal imports and trade. It has also helped the
government to increase its revenue due to substantial increase in the
import and local manufacture of home appliances and electronics goods.
The legal trade is the beneficiary. The situation is much better and end
of the illegal activities has helped the legal trade to regain a
substantial portion of the market which it had lost to smuggling in not
too distant a past. This will also benefit the people as the companies
marketing these products would help to offer competitive prices with the
opening up of the market.