Escolar Documentos
Profissional Documentos
Cultura Documentos
CONTENTS
Executive Summary 1. Introduction o Pakistan in brief 2. Market, Demographic, resources 3. Business Environment 4. Political Environment 5. Social & Cultural Environment 6. Economic Environment 7. Technical Environment 8. Legal Environment 9. Conclusion 10.Market Analysis 11.Route to Market o Purchase, Store and Sale companies o ZERO inventory, Purchase and sale companies 12. Reference & Acknowledgement
Pakistan
Languages Literacy Rate Ease of Doing Business Rank Foreign Direct Investment
US $1085 5.8% Pak Rupees (Rs.) Industrial Equipment, Chemicals, Vehicles, Steel, Iron Ore, Petroleum Edible Oil, Pulses, Tea. Cotton, Textile Goods, Rice, Leather Items, Carpets, Sports Goods, Handicrafts, Fish and Fish Prep. and Fruits. Urdu (National) and English (Official) 57% 83rd USD 2.2 billion (2009-10)
Executive Summary
Pakistan is one of the emerging country to do the e-retailing business after looking at the internet users in Lahore, Islamabad, karachi Many International BIG giant e-retailers are eying on Pakistan to explore market. Total 30 mln internet users are there in Pakistan e-commerce, a business model that encompasses sale and purchase of goods and services over the internet, is growing in Pakistan slowly, but steadily. Industry experts claim the estimated market size of e-commerce in Pakistan is between $25-30 million a year. The retail and wholesale sector in Pakistan was worth about $40 billion in fiscal year 2012 and has been growing at 5.3% in real (inflation-adjusted) terms for the past five years, much faster than overall economic growth during that period. Last year saw a phenomenal spike in online selling, especially of fashion items, wristwatches and books were sold via online media, but the chunk of fashion products has increased phenomenally recently. In terms of advertisement spending, about 1% of the total market size ($500 million) belongs to online ad spending in Pakistan, which translates into $5 million a year, according to a mobile survey company Ansr.io. What can stop the investors to come and invest in Pakistan o Unstable political situations o Terrorism The Government of Pakistan has granted numerous incentives to technology companies wishing to do business in Pakistan. A combination of decade-plus tax holidays, zero duties on computer imports, government incentives for venture capital and a variety of programs for subsidizing technical education, are intended there. 1.00 USD=106.000 PKR 1 PKR = 0.00943396 USD (www.xe.com)
Pakistan in brief:
Is a country of 180+ Million people.
That puts it as the 6th most populous country in the world. Its overall Tele Density stands at 72%, Mobile Tele Density at 68.8%.
On Branchless Banking, Pakistans numbers are soaring. At present it has about 1.8
Million users who are using Branchless Banking, with quarterly growth at about 25%.
PAKISTAN GDP
The Gross Domestic Product (GDP*) in Pakistan was worth 231 billion US dollars in 2012. The GDP value of Pakistan represents 0.37 percent of the world economy. GDP in Pakistan is reported by the The World Bank Group. From 1960 until 2012, Pakistan GDP averaged 52.3 USD Billion reaching an all time high of 231.0 USD Billion in December of 2012 and a record low of 3.7 USD Billion in December of 1960.
* The gross domestic product (GDP) measures of national income and output for a given country's economy. The gross domestic product (GDP) is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time.
PAKISTAN
Real GDP (Sector Wise Data)
Year A) Commodity Producing Sector I. Agriculture II. Industry 2001-02 1,792,972 904,433 888,539 2002-03 1,868,125 941,942 926,183 2003-04 2,041,635 964,827 2004-05 2,234,671 2005-06 2,348,925 2006-07 2,504,569 2007-08 2,535,968 2008-09R 2,555,948 2009-10P 2,646,845
Manufacturing
Large-scale Small-scale* Mining and Quarrying Construction Electricity & Gas Distribution B) Services Sector Wholesale & Retail Trade Transport Storage & Communication Finance and Insurance
596,841
388,859 207,982 90,431 89,241 112,026
638,044
416,955 221,089 96,418 92,789 98,932
727,439
492,632 234,807 111,473 82,818 155,078
840,243
590,759 249,484 122,621 98,190 146,214
912,953
639,585 273,368 128,288 108,195 107,391
988,301
695,489 292,812 132,254 134,536 112,441
1,036,101
723,626 312,475 138,047 127,076 85,893
997,966
664,405 333,561 137,707 112,884 112,360
1,049,569
693,355 356,214 135,411 130,203 112,789
Ownership of Dwellings
Public Administration & Defence Community, Social & Personal Services GDP at Factor Cost (A+B)
118,604
240,585 366,285 3,745,118
122,466
259,148 389,067 3,922,104
126,764
267,321 410,125 4,215,582
131,214
268,826 437,152 4,593,230
135,820
295,959 480,217 4,860,476
140,587
316,915 518,344 5,191,709
145,521
320,565 569,044 5,383,012
150,629
332,108 619,409 5,448,037
155,916
357,134 660,236 5,670,768
10
11
12
13
14
2. Economic Analysis: Factors that Creating Threats: Overall economic conditions are not very sound: Over all economic conditions are not very good for any industry because rate of inflation is increasing day by day and value of currency is going down which causing increase in the value of loan payable that is another major threat Efficiency of financial market is not so Good: In Pakistan all the financial institutions are controlled by government rather then the head of financial Institution State Bank of Pakistan (SBP). Rate of interest is increasing day by day it is approximately 21% which is higher then any country in the world so it makes impossible for the service industry to take loan facility. Exchange controls Foreign exchange controls are various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents. Common foreign exchange controls include: o Banning the use of foreign currency within the country o Banning locals from possessing foreign currency o Restricting currency exchange to government-approved exchangers o Fixed exchange rates o Restrictions on the amount of currency that may be imported or exported
15
16
17
4. Technological Analysis: Factors Creating Opportunities: Technology is changing the attitudes and behavior: Technology is changing the behavior of the people and providing them opportunities to get the bright future. Increasing the internet users: It is huge opportunity for e-retailer to en-cash the opportunity of increasing the user base of internet and buying power via online Factors Creating Threats: Focus on increasing the Coverage: The current focus of the E-retailer industry is on increasing the coverage rather then up gradation of the systems they should up grade the systems to meet the requirement of the modern world.
18
Conclusion:
The number of macro-environmental factors is virtually unlimited. In practice, the firm must monitor those factors that influence its industry. Even so, it may be difficult to forecast future trends with an acceptable level of accuracy. In this regard, the firm may turn to scenario planning techniques to deal with high levels of uncertainty in important macroenvironmental variables.
19
20
Infrastructure
Pakistan has more than 20 million Internet users in 2009. The country is said to have a potential to absorb up to 50 million mobile phone Internet users in the next 5 years thus a potential of nearly 1 million connections per month. In mid-2008, the broadband capacity reached around 5.5 million. Telecom industry created of 80,000 jobs directly and 500,000 jobs indirectly. International Mobile Companies in Pakistan = 4
IT industry
The second half of the first decade of 21st century has seen steady growth in the IT industry of Pakistan. Software exports grew considerably in 2007. That year, the industrys worth was estimated at $2.8 billion with an increase in the number of IT companies to 1306 . The country also featured in the Global Services Location Index for the first time in 2007, Further, Pakistan ranked as the 30th best off shoring location in the world and as of 2009, its rank improved to the 20th position.
21
Trained Workforce
A large part of the workforce is proficient in English, hardworking and intelligent. Pakistan possesses a large pool of trained and experienced engineers, bankers, lawyers and other professionals with many having substantial international experience.
Geo-strategic Location
Located in the heart of Asia, Pakistan is the gateway to the energy rich Central Asian States, the financially liquid Gulf States and the economically advanced Far Eastern tigers. This strategic advantage alone makes Pakistan a marketplace teeming with possibilities.
22
Investment Policies
Current investment poalicies have been tailor made to suit investor needs. Pakistan's policy trends have been consistent, with liberalization, de-regulation, privatisation , and facilitation being its foremost cornerstones.
Financial Markets
The capital markets are being modernized, and reforms have resulted in development of improved infrastructure in the stock exchanges of the country. The Securities and Exchange Commission of Pakistan has improved the regulatory environment of the stock exchanges, corporate bond market and the leasing sector. Whilst the Federal Board of Revenue has facilitated structural reform in tax and tariffs and the State Bank of Pakistan has invigorated the banking sector into high returns on investment.
23
oThere is no restriction on payment of royalty and/or technical service fees for the manufacturing sector. oHowever, such agreements shall be registered with the State Bank of Pakistan. oThe payments of royalties and technical service fees to foreign companies will be taxed at 15%. However, reduced rates under the treaties with different countries remain applicable.
24
b)
Non-Manufacturing Sector
The payment of franchise, royalty or technical fee in case of non-manufacturing sectors is allowed subject to following conditions:o In case of foreign investment in non-manufacturing sectors including food sector, the initial / olump sum fee should not exceed US$ 100,000 irrespective of number of outlets under on franchise. o A maximum 5% of net sales (excluding 15% Sales Tax) in the food sector may be allowed as franchise fee only for those items which are core items of the franchise and are the specialties of the trade name. o The payment of such fees be allowed on monthly basis. No item will be eligible for twice payment of royalty/franchise fee, e.g, soft drinks, etc. o Percentage/amount of fees etc., for other non-manufacturing projects is also be upto the maximum of 5% of net sales (excluding 15% Sales Tax). o Initial period for which such fees may be allowed to projects in non-manufacturing sectors should not exceed 5 years. o Subsequent extension in time period may be considered provided these projects also make investment in allied upstream projects. o The agreements conforming to above guidelines will be sent by the sponsors to State Bank of Pakistan for its information. o However, any relaxation or deviation from the guidelines will require prior approval of the Cabinet Committee on Investment (CCOI).
25
26
Transport in Pakistan
a) Road Road transport is most popular and it carries about 90% of the total passenger traffic. The country has about 248,340 kilometers of roads, of which more than 50 percent are paved. The rest are graveled or unimproved tracks. Road traffic is increasing to nearly overwhelming proportions, with mixtures of animal carts, high-speed cars, buses, and trucks. The principal roads of Pakistan are GT (Grand Trunk) Road, Super Indus Highway (N- 55), Karakoram Highway (N-35), Makran Coastal Highway (N-10) and Motorway Projects (M1, M2, M3, M8, M9).
b) Railways Pakistan's railways cover roughly 7,791 kilometers. Most are in the Indus Valley, from Karachi to the Punjab, with a few lines into the North-West Frontier and one westward across northern Baluchistan to the Iranian border.
27
28
29
E- Shoppers Worldwide:
An interesting study by Nielsen Global Online Survey suggests that there are a total of 875 million consumers worldwide, who have shopped on the web. This figure has grown exponentially 40% from 627 million since 2009. Research affirms that 85% of Internet users have shopped online. 60% of web shoppers pay with credit cards, and a quarter use PayPal. Most e-shoppers hail from South Korea. Surprisingly 99 percent of Internet users in South Korea are also e shoppers. German, UK and Japanese consumers come in a close second. Indian shoppers rank third beating US consumers, who stood at number eight. On the extreme end, the worlds slowest adopters come from Egypt, where 67 percent of the online population have never made a purchase over the Internet, followed by Pakistan (60%) and the Philippines (55%). The most important thing to consider is the ratio of total online spending as a percentage of total monthly spending varies by country with Chinese and Korean online consumers allocating the most via the web than any other in the region.
30
Target Customer
Aged 25-44 House hold income > 50 k pm Preferably dual income households Household with children Education level above bachelors Consumers looking for convenience Average commute time to work Number of household with internet access Adults with credit cards Female shoppers .
31
Vmart.pk
Symbios.pk
PakistanOnlineShop.com
HomeShopping.pk
Shophive.com
32
ROUTE TO MARKET
Forming a Joint Venture with a local Pakistan Business establishment seems the best option due to the perceived resistance of Indian business establishment, the revenue sharing can be based on mutual division of roles looking at strengths of the partners . Two positioning strategies for e-retail companies in Pakistan in future: Purchase, Store and Sale companies (for Books, Electronics, Electricals, Mobiles, Computer & laptops and fashion Garments) ZERO inventory, Purchase and sale companies (for groceries and GMCD)
33
There should be prior commitment to the customers for delivery satisfaction. (like within 24 hours or 48 hours materials will get delivered)
For a new company it is good to launch in phases like first in Islamabad than Karachi than in other city than down the line of 2 to 3 years in entire country. Tie up with local transporter or create own fleet or own delivery boys to deliver the materials till customer. Launch can be done with all the payment options like credit card, debit card, coupons, payment on delivery. Need to have huge investment here because company will be carrying at least a week Inventory.
34
35
36
Questions ?
37
Thank you
38