Muneeb ur Rehman

The newly emerging q-commerce industry needs subsidies to keep its head above water, as the rising inflation in Pakistan is hitting it hard like the other sectors of economy. Talking to WealthPK, Mawahid Tariq, CEO of Apna Mart, a Taxila-based q-commerce startup, said that inflation is denting the industry mainly in two ways: increase in the oil prices and the declining purchasing power of consumers.

‘’The increase in the oil prices has caused a surge in the transportation cost. The transportation cost constitutes a large share of the overall cost of running a q-commerce business. The net profits of businesses in this industry are under heavy pressure, as the cost of transportation per delivery has scaled up. The declining purchasing power of consumers is the second factor responsible for the industry’s low revenues. With the rise in inflation, the real income of consumers has plummeted in a real sense. Customers now demand fewer goods to be delivered to their doorsteps,” he said.

The Consumer Price Index (CPI) stands at 31.5%, according to the Bureau of Statistics. Food inflation in Pakistan jumped up to 45.1% in February from 42.9% in January 2023. Similarly, oil prices have also shown an unprecedented rise. The petrol price has risen by 78 percent this year as compared to the previous year. High-speed diesel (HSD) has shown an increase of 95 percent this year. “With a flourishing e-commerce in Pakistan for years, local investors are taking interest in q-commerce. The consumer base of Pakistan is substantial, as it has a considerable size of middle class.’’

Regarding the government’s plan to give fuel subsidy to the motorcyclists, he said, “It is commendable that the government is coming up with a targeted fuel subsidy for the low-income people. However, q-commerce can also flourish if the same subsidy is extended to the industry. With subsidized fuel prices, the industry would be able to cover its minimum revenue targets.”

“The industry has the potential to generate large-scale employment in near future. Despite limited fiscal space, the government’s fuel subsidy will serve the purpose of providing a cushion to the newly emerging industry,” he added. It is understandable that Pakistan is facing trying times on the economic front. Against all the odds, fuel subsidy will have a positive outcome on the q-commerce industry in near future and on Pakistan’s economy in the long run.

Credit: Independent News Pakistan-WealthPk