Muneeb ur Rehman

The newly emerging Q-commerce industry in Pakistan expects a high growth following a sharp decline in fuel prices. Talking to WealthPK, Qasim Ahmed, Chief Executive Officer (CEO) of KRAVE Pakistan, a leading startup in Q-commerce, said the cost equation of the Q-commerce industry was highly skewed toward the transportation costs. The massive decrease in fuel prices is a good omen for the growth of the industry, he added. Petrol is now being sold at Rs283.38 per litre, a significant reduction from the previous price of Rs323.38 per litre. Likewise, the cost of high-speed diesel (HSD) has been lowered by Rs15 per litre, with the new price set at Rs291.18 per litre. He said the elevated fuel prices in the past resulted in increased delivery costs, putting significant strain on the net profits of businesses in this industry. The rising transportation expenses per delivery exerted substantial pressure on the cost of doing business. Furthermore, as the fuel prices decline, inflation is expected to decline.

This is expected to stimulate the Q-commerce industry, as an increase in real income coincides with the increase in demand for the goods, he mentioned. According to the Pakistan Economic Survey, headline inflation, measured by the growth in CPI, was 28.2% during July-April FY2023 as against 11.0 % during the same period last year. Qasim pointed out that given the thriving services sector in Pakistan over the years, the domestic investors were showing keen interest in Q-commerce. The significant size of the middle-class population in Pakistan provides a substantial consumer base in this regard. “The industry holds the potential to create a substantial number of jobs in the coming years. The decrease in fuel prices would serve as a protective measure for the thriving sector,” Qasim pointed out. It is evident that Pakistan is currently grappling with scores of economic challenges. However, against all odds, a decrease in fuel prices will yield favorable results for the Q-commerce sector.

Credit: INP-WealthPk