Amir Saeed

Pakistan's dropshipping startups are under threat following imposition of new US tariffs, prompting plans to make strategic shifts in marketing and market diversification to maintain profitability and competitiveness amidst the rising costs.

Talking to WealthPK, Rafi Ullah, a member of Islamabad Chamber of Commerce and Industries (ICCI), said the US tariffs on Pakistani imports may significantly impact various sectors, with the dropshipping startups facing substantial challenges. Dropshipping, a lucrative business model for many Pakistani entrepreneurs, involves listing products from suppliers without maintaining inventory.

However, the new tariffs may squeeze the profit margins, prompting these businesses to rethink their strategies. He emphasized the importance of identifying trending products and maintaining customer loyalty. He highlighted that automation was crucial for managing dropshipping businesses efficiently, allowing entrepreneurs to scale operations without being bogged down by the administrative tasks.

He suggested that diversifying into other markets, such as Europe and the Middle East, could help mitigate the risks posed by the US tariffs. This strategic shift could provide a buffer against the volatility in the US market. “The broader impact of these tariffs extends beyond pricing and logistics; they threaten the competitiveness of Pakistani products in the US market,’’ he said.

Talking to WealthPK, Ghazanfar Hussain, President of Gilgit Baltistan Chamber of Commerce and Industries (GBCCI), highlighted the critical need for businesses to adapt their marketing strategies to the evolving market conditions. He pointed out that the rising costs due to tariffs and use of alternative shipping routes were creating significant challenges for dropshippers, necessitating optimization in their marketing approaches to remain competitive.

He stressed the importance of exploring niche markets as a way to mitigate these pressures. By identifying and targeting specific market segments where the competition is less intense, the businesses can better position themselves amidst the rising costs and logistical hurdles, he said. He emphasized the value of innovation in marketing strategies, particularly through targeted advertising and personalized customer experiences.

According to Ghazanfar, these methods are essential for retaining customers who may otherwise be deterred by the higher prices and longer delivery times. He believed that dropshipping startups in the country could navigate these challenges effectively by focusing on niche markets and tailoring their product offerings to the unique needs of specific customer groups.

The GBCCI president opined that personalized advertising, where promotions are tailored to individual preferences and behaviours, could significantly enhance customer loyalty and engagement, even in difficult economic circumstances. This approach would not only help businesses maintain their competitive edge but also allow them to thrive by leveraging opportunities in less volatile markets.

Credit: INP-WealthPk