Emerging challenges for consumer sector.

Byline: Syed Fazl-E-Haider

Pakistan faces new challenges and emerging issues in the highly competitive world of consumer products, which is more complex, well-connected and fast-moving than ever. Whereas, it creates enormous opportunities, it also enhances risk factors. The products and services actually constitute the consumer sector. The products sold directly to consumers are called consumer goods. Anything purchased by the average consumer, from fruits, vegetables at the local market to a washing machine, television sets to a laptop computer, is part of the consumer business industry.

Consumer sector is divided into consumer staples and consumer discretionary goods and services. Consumer staples include food and beverage products, household supplies and any other items that are used on a regular basis due to ordinary use.

A staple industry represent a continuous required product used by the common man. Food and personal hygiene items are two examples considered part of a staple industry whether in manufacturing or retail sales. The consumer goods sector includes companies involved with food production, packaged goods, clothing, beverages, automobiles, and electronics. It is a category of stocks and companies that relate to items purchased by individuals rather than by manufacturers and industries.

Interest of foreign firms into Pakistan

Unilever, along with Switzerland's Nestle SA, dominates the Pakistan's food market. Its local competitors include National Foods Ltd, a company that makes recipe mixes, desserts, frozen meals as well as condiments; Engro Foods Ltd, a dairy company; Shan Foods and Mitchells Fruit Farms Ltd. Several smaller companies, such as Euro Foods and PK Meat, and private-label packaged foods from supermarkets, are also growing rapidly. In 2016 Koninklijke FrieslandCampina NV, a Netherlands-based foods company, acquired a 51% stake in Engro Foods for euro 420 million.

That was reported to be one of the largest private-sector foreign investments in Pakistan. Last year, Unilever Group disclosed its plan to invest US$120 million at four manufacturing plants in Pakistan over the next two years. The Ango-Dutch consumer products giant had previously invested $500 million in its Pakistani operations in 2013. It makes about 30 brands including Dove and Lifebuoy soaps, Knorr soups, Lipton tea and Cornetto ice-cream in the country.

Smuggling or illegal trade is the area, which needs special attention of the authorities. The...