Aitizaz Hassan

Retail tech is expanding its coverage rapidly in Pakistan. According to a report of Ignite National Technology Fund, in 2022, retail tech startups have brought the highest investment. The total investment of retail tech is $165.5 million, out of $342.75 million, which is 50.76% of the total investment.

Source: Ignite

The Ignite data shows that Bazaar startup raised the highest amount of $70 million in 2022. Similarly, the retail tech startup Dastgyr raised $37 million, Retailo raised $36 million, while Jugno raised $22.5 million in 2022.

E-commerce and business development expert Muhammad Ali said while talking to WealthPK that high-tech innovations help retailers stay competitive in four key categories, i.e., convenience, price, size and speed.

He said that in stores and on the sales floor, high-tech tools help balance inventory collections, manage ordering and track pricing. He said customer tracking tools increase customer satisfaction and promote loyalty by enhancing shoppers' in-store experience.

“On the executive level, technology improves planning and decision-making. Various data-mining software help make stocking, pricing and marketing decisions, as well as improve product design and development,” Ali added.

He said that modern retail tech is changing everything about shopper expectations and retail operations. Instead of straggling into a harsh store and herding themselves into sluggish checkout lines, consumers can order a product from their phone and have it delivered to their doorstep, or they can place an order at home, drive to a pick-up location, grab their product and leave. The customer journey is becoming increasingly varied and personalised-customisation that shoppers have come to expect.

“E-commerce is booming. Growth projections estimate that by 2023, retail sales will exceed $29.7 trillion worldwide,” Ali said.

A startup consultancy firm, Invstest2Innovate’s data shows that Pakistani startups raised $65.5 million in quarter 3 of 2022, bringing the total amount to $340.1 million this year. Q3 was down 36% compared to Q2 2022, and down 62% from Q1 2022. Q3 of 2021 saw Pakistani startups bringing 2.7 times more investment ($177 million) than what they raised in Q3 this year. But total funding for 2022 will probably still surpass the total amount raised in 2021 ($354 million).

Over the past five years, investments in Pakistani startups have grown by more than 30 times. In 2017, total startup investments were only $10 million. However, in 2021, Pakistani startups raised $373 million which was five times the investments of $75 million in 2020. Leading international venture capitalists and angels have invested in Pakistani startups which reflects the confidence they have in the future potential of these startups.

Pakistani startups have raised around $870 million since 2017. Considering that average equity is around 25%, valuation of Pakistani startups is around $3.5 billion at present. If investments grow by 25% over the next five years, cumulative valuation of Pakistani startups will reach $20 billion by 2027. Hence, Pakistan is expected to have a couple of unicorns by 2027.

Till date, more than 1,050 startups have been inducted in the National Incubation Centre (NIC). These startups have been provided with mentorship and networking by leading entrepreneurs, corporate chieftains, top professionals, investors and global entrepreneurial organisations through numerous events and meet-ups. Other facilities include rent-free office space, high-speed broadband internet, makers lab, usability labs, fintech lab, design thinking lab, etc. These centres also offer legal assistance, coaches, vertical mentors, financial experts and trainers to nurture startups.

Credit : Independent News Pakistan-WealthPk