Hi Adam, this is really insightful read and created deep understanding. Just to add here, big FMCGs have already created their app and encouraging retailers to punch their stock demands through that. But the inventory management is being carried out through the distribution only.
This way the underselling FG, Kiryana stores orders are fulfilled despite order booker appears or not and the retailer incentives are not compromised in the invoices while receiving with the order. The tax evasion challenge is mitigated here but the payments are still not digitized in this model, but can be made possible if retailers accounts are created on basis of their PoP codes.
Another key challenge which no one really talks about is the unwillingness of manufacturers (who have a strong distribution footprint in place) to engage in the price war which these startups are sure to create. For some, the disadvantages of multiple RTM avenues that lead to weaker controls and consequently price arbitrage, is a much bigger nuisance then the benefits realized
How much cash will be burned to reach critical size, offer great incentives to replace wholesalers? It's easy on paper but much much harder to execute. How many warehouses and what fleet size is needed to fulfill all these orders ? It's not easy to mix delivery of yogurt cheese with rice and noodles..there is a big big logistic issue here and don't think that it is a viable business
Digitising Pakistan's Retail Market
Hi Adam, this is really insightful read and created deep understanding. Just to add here, big FMCGs have already created their app and encouraging retailers to punch their stock demands through that. But the inventory management is being carried out through the distribution only.
This way the underselling FG, Kiryana stores orders are fulfilled despite order booker appears or not and the retailer incentives are not compromised in the invoices while receiving with the order. The tax evasion challenge is mitigated here but the payments are still not digitized in this model, but can be made possible if retailers accounts are created on basis of their PoP codes.
Another key challenge which no one really talks about is the unwillingness of manufacturers (who have a strong distribution footprint in place) to engage in the price war which these startups are sure to create. For some, the disadvantages of multiple RTM avenues that lead to weaker controls and consequently price arbitrage, is a much bigger nuisance then the benefits realized
Much needed analysis for upcoming startups entering into Pakistan. Thanks again for the insights.
Great insights. Thanks for demystifying the recent capital infusion in Bazaar and Tajir.
Insightful
How much cash will be burned to reach critical size, offer great incentives to replace wholesalers? It's easy on paper but much much harder to execute. How many warehouses and what fleet size is needed to fulfill all these orders ? It's not easy to mix delivery of yogurt cheese with rice and noodles..there is a big big logistic issue here and don't think that it is a viable business
Would not be easier if manufacturers such as P&G went directly to retailers with their own distribution with presale road to market ?