CASH & CARRY
TOP FIVE MULTINATIONALS INVEST IN PAKISTAN
FOZIA AROOJ (fozia.Arooj @hotmail.com)
Aug 31 - Sep 06, 2009
For some particular segments of the society, the concept of super malls as well as gigantic plazas is growing rapidly. Economic prosperity as well as ostentatious mindset of the inhabitants of urban society has played pivotal role in this regard. The mushroom growth of these cash and carry super stores has given rise to consumption led growth and it is leading to decrease in propensity to save.
Presently various foreign companies are engaged in the business of shopping complexes (malls), hotels and residential projects in Pakistan. Metro Cash and Carry, Germany and MAD Hypermarkets Pakistan, Dubai is establishing retail chain stores in Pakistan independently.
Similarly, Pak Gulf Construction Company, Al-Ghurair-Giga Group and Emmar Properties of UAE are foreign companies and have launched their residential, commercial and hotel projects. Details of investment made by foreign companies revealed that the estimated cost of METRO Cash & Carry would be Euro 200 million for investment in trade/services/consumer products. The company has planned to open at least 10 Cash & Carry wholesales centers in all major cities of Pakistan including Multan, Sialkot, Rawalpindi, and Gujranwala.
Now five top foreign companies are making huge investment in Pakistan for construction of hotels, shopping malls, international chain stores, and real estate projects, costing billions of dollars.
These malls are awesomely built and impressively decorated to allure attention of upper and upper middle class of urban areas. They contain a large and diverse set of goods. But as a matter of fact such shopping malls are not likely to be successful in a country like Pakistan where people do not have a high purchasing power and could not buy commodities worth Rs2000 in one go. This certainly keeps average consumers of our society away from these stores.
The chains of these stores are running very successfully in western countries as people tend to save time by purchasing all the goods of household use under one roof. However our society is not so thoroughly structured and organized that people prefer to spend some extra pennies for petty things. Instead our people especially womenfolk really enjoy to visit all the markets in search of ordinary things especially clothing and other accessories and then bargain over prices.
Individuals from well-off families are happy as they are happy to get every commodity of daily use under one roof, which saves time.
Some people are comfortable with the security arrangements, as they believe that along with other facilities, the shopping malls are very safe from security point of view. This is because in recent days it has become difficult for people to visit open markets because of security reasons. However, some of the people are not satisfied with the procedure of card making and also criticize the condition of minimum purchasing worth Rs 2000.
Experts have suggested that more such super mall should be established across the country. However, there is a dire need to adopt ethical codes in the commercial sector, which can promote the business and commercial activities throughout the country. Demographically, Pakistan has more than 100 million people below 14 years of age. So analysts expect more people to join the workforce in the coming years, helping to sustain high rates of consumption. With the population of over 170 million people and more than a million residents in eight cities, Pakistan is a very attractive and important market for these foreign companies and they see a vast prospect for business, and are likely to continue to invest in Pakistan.
In fact, Pakistan is in need of investment in other areas where it is facing dearth of resources and masses are crippling due to subdued and stagnant economy. Power sector is one such area where foreign money is really required because internal resources are not sufficient enough to build new dams or to exploit coal reserves lying idle in Thar. The investment is not coming in those areas because of the fears of law and order problems. Only telecom and construction industry has been eyed by them which donít befit the basic line of needs of Pakistanís people.
Cash & carry stores are undoubtedly beautifying the cities and adding aesthetic value and comfort in the lives of individual consumers. But for a nation they are not of any good use. Most of these stores are carrying huge quantities of imported commodities thereby spending already depleting and meager forex reserves to import juices, perfumes and cosmetics. This in turn, compels the government to increase petrol prices to abridge the gap of trade deficit. Government has to play a role of regulator and restricts these business giants to keep only indigenous products for the betterment of our local economy. All these plazas should also be strictly located in commercial areas and not in the housing societies and residential areas as has been done in Karachi.