Pakistan has an oligopolistic airline industry and one of important Pakistan’s top brand sectors, where Serene Air, Air Blue & Air Sial, as privately-owned airlines, compete against each other and the national carrier PIA (Pakistan International Airlines). Last year, another airline company entered the domestic market Fly Jinnah. There is plenty of room to grow when it comes to the total market share of low-cost carriers in Pakistan. Their share is much smaller than some of Pakistan’s neighboring countries like India.
Pakistani flag carrier Pakistan International Airlines has welcomed the third Airbus A320 to its fleet last year. PIA has plans to add another five-wide-body aircraft to its fleet. The airline hopes to conclude a dry leasing agreement for five planes with a capacity of between 250 and 320 passengers. Pakistan needs joint ventures in the aviation sector, as these have become increasingly common and proven successful worldwide. The JVs can contribute significantly towards improving the quality of human capital, knowledge transfer, and development of local talent, bringing international expertise, experience and training standards into the local market. Recently, Qatar 16 Investment Authority has also expressed keen interest in the aviation sector due to the country’s investment climate. Moreover, the recent joint venture between Air Arabia and the conglomerate Lakson Group is paving the way for a better and more sustainable future for the country’s aviation industry.
The local automobile sector comprises of total 12 assembling/importing brands which include Honda, Suzuki, Toyota Indus & Hyundai. The passenger cars market is largely structured with three major players i.e., Toyota Indus, Honda & Pak Suzuki, controlling the market historically. In the Jeeps & Pickups segment, the market is dominated by Toyota along with Ghandhara, Hyundai, Suzuki Ravi & Honda (BRV). The top-selling car brand last year was the 600cc Alto followed by Toyota Corolla and Yaris. Honda City & Civic are the third most popular choice. The Auto Policy 2016-21 offered tax incentives to investors seeking to set up their automobile manufacturing plants in Pakistan. This has resulted in several new Chinese & Korean investors entering the market in 2021 such as KIA Motors, DSKF Motor Co Ltd, Hyundai Motors, Changsha Foton Vehicle Technology Co. Ltd., and Changan International Corporation Ltd.
Fertilizers are nutrients essential for the growth of plants and crops. There are three main types of fertilizer used by the agricultural sector. These include Nitrogenous fertilizers such as Urea and CAN, Phosphorous fertilizers such as DAP and Potassium fertilizers including NPK and NP. The most common type of fertilizers are nitrogenous fertilizers (mainly Urea) due to their vital properties and lower prices as compared to other types of fertilizer. The sector is dominated by 6 players which occupy almost 95% of the market share. This makes the sector oligopolistic in nature. Out of these six, four players are listed on the Pakistan Stock Exchange (PSX). These companies belong to the 3 big names of the corporate sector, Fauji, Engro and Fatima Group. Due to the agriculture sector’s immense economic significance, the government has set out relief and subsidy programs, which leads to higher demand for fertilizers.
Food and beverages industry
Pakistan’s food product market size was recorded at PKR 200 billion in 2022. The food products market is steadily growing, majorly because of inflation impact and consequent increase in food products prices. It does not seem to be largely affected by the economic slowdown in the last few years.
Traditional occasions such as religious and wedding seasons result in a significant increase in overall consumption. Local food product prices are largely dependent on major raw materials including sugar, wheat, edible oil and potatoes, whereas flavors and some other components are imported. Imported products are quite expensive in Pakistan with prices usually 50-100% more costly when compared on a per-gram basis with local products.
By distribution channel, the food products market is segmented into supermarkets/hypermarkets, convenience stores, specialty retailers, online retailers and others. The prices of individual products are highly variable in this segment and depend on numerous factors such as brand, quantity, packaging, region, the scale of operations, etc. Food, beverages & consumer products is a highly competitive industry with the influx of new players.
Favorable demographic and consumer dynamics are expected to support the food products’ demand. However, the sector is expected to face challenges due to increasing inflation. Most of the raw material is readily available at the local level. An increase in raw material prices has a blanket impact on all industry players, therefore is directly passed on to the end consumers by both organized as well as unorganized segments. With an export-oriented approach, there exists a significant potential for food product exports in the international market, especially to the Asia Pacific and Middle East regions. However, this potential still remains untapped and unconsidered by the government.
Pakistan’s tech industry contributes roughly 1% to the national GDP and stood at approximately PKR 450 billion in 2022 with the domestic market size for technology products and services estimated to be PKR 187 billion; meanwhile, during FY21, exports of the total tech industry increased to approx. PKR 300 billion.
Technology-based start-ups and venture capital (VC) ecosystem in Pakistan have also started gaining traction; since 2015, start-ups have raised over USD 564 million across 255 deals; while there was a consistent rise in funding, 438% YoY growth in funding in 2021 proved to be the inflection point as start-ups raised USD 352 million across 83 deals reflecting 67% of the total amounts raised since 2015. Since 2015, the e-commerce sector raised the highest investments of USD 315 million followed by fintech start-ups which raised USD 113 million of which USD 95 million was raised in 2021 alone.