[ BUSINESS ]
However , these households typically employ drivers , maids , and other helpers for most tasks and chores , so they rarely use activity outsourcing models . They prefer in-store shopping for a more personalised experience , although the younger , more digitally savvy members increasingly favour online shopping . This group represents the most immediately monetisable user base in Pakistan , but highly brand-sensitive and individualistic , with their spending focused on quick commerce , direct-to-consumer brands , fast fashion , and branded electronics . Most discount-driven marketing efforts target this segment , which is ideal for banks , quick commerce , premium brands and boutiques . With about half of this population in their early 50s and above , attracting the younger generation is crucial for longterm economic gains . This is because purchase decisions are usually initiated by the younger members , making the older ones more of financiers than purchasers .
• GROUP 5 – The ultra-wealthy population ( 0.2 % of households ) generate an income above Rs . 1,200,000 per month . They are neither price- nor time-sensitive and live a very sheltered lifestyle compared to the rest of the population . These households are the iPhone and X / Twitter users of Pakistan but are demographically skewed to be much older , with fewer young people , and a focus on premium online stores , which in effect means buying imported products such as M & S olive oil and Huda Beauty foundation at eye-gouging premiums . Extremely brand conscious and private by necessity , they rarely shop in the country and mostly seek lifestyle / ultra-luxury brands .
Where does that leave the magical 250 million population figure in reality ? For many business models , particularly those prevalent in more developed markets , the true addressable market might be only around 10.6 million peo-
For many business models , particularly those prevalent in more developed markets , the true addressable market might be only around 10.6 million people ple ( including all of Groups 3 , 4 , and 5 ). This is still a $ 43 billion opportunity , or maybe just half if factoring in the propensity and ability of different ages within those groups to adopt technology .
MARKET REALITIES FOR B2C BRANDS
When looking at consumer segments in Pakistan from a socio-economic angle , measuring both household consumption potential and per capita income , it is clear that consumption differs drastically from income segment to income segment .
For the last two years , the cost of living has increased dramatically for the overwhelming majority of households in Pakistan . With much less discretionary income available , consumers are not in the position to pay large premiums ..
This has led a significant number of quality-oriented consumers to change their buying criteria to one of highest perceived value and for value-oriented consumers to double down on their discount hunting habits .
This is evident in the grocery market , which is estimated to be worth at least $ 50 billion . Most Pakistani households allocate at least 25 % of their income to groceries , with Income Group 1 spending up to 50 %. This leaves minimal room for discretionary spending , especially when considering the need for emergency healthcare funds and ongoing children ’ s education expenses .
When it comes to distribution , most brands today use the Internet more than ever in Pakistan , with more than 50 million social media users . However , numerous brands lack the expertise or team to effectively optimise their cost-per-acquisition through online channels , resulting in suboptimal returns on ad spend .
In Pakistan , identifying your customer and delivering your message are distinct tasks , with reaching the right customer often being a monumental challenge . This difficulty is closely tied to the diverse socio-economic consumption potential across Pakistan ’ s various income groups . Only brands that can successfully navigate the complexities of these income group changes are likely to become national-level brands .
MATCHING SOCIO-ECONOMIC REALITIES
The experiences of successful consumer brands in Pakistan underscore essential requirements for companies aiming to establish a digital-first business in the country . Brand strategies must align with Pakistan ’ s socio-economic realities for years , if not decades ahead . Here are fundamental rules to achieve this .
• Targeting the right customer is more important than continuously improving the product . Take Income Group 1 , for example : it not only lacks consistent discretionary purchasing power despite its substantial collective con-
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WEJ | September 2024