Pakistan - Country Commercial Guide
Selling Factors and Techniques

Discusses the legal requirements/options for joint venture/licensing in this market.

Last published date: 2022-11-11

Pakistan’s retail industry is still developing with most of this segment fragmented and underdeveloped. There are in excess of 2.5 million shops in Pakistan, most of which offer only basic products. Consequently, clothing, food, beverages, and tobacco account for as much as 75 percent of retail sales.

Large supermarkets or chain stores for general consumer items are not widely available in Pakistan, though a few multinational chains have started operations. The European cash and carry retailer Metro, in joint collaboration with Pakistan’s Habib Group, has opened several self-service wholesale outlets in Karachi, Lahore, and Islamabad. Carrefour Hypermarkets (Pakistan) with outlets in Karachi, Lahore, Faisalabad, and Islamabad is the latest player in the hyper-market segment, along with the UK’s Greenvalley. The concept of chain stores for fashion apparel has also lately begun to emerge in the larger cities, where several such chains, stocking predominantly locally-manufactured merchandise, are currently operating. In addition, hundreds of government-owned Utility Stores sell food and household items and serve as a mechanism for restraining inflationary prices by following the government line on pricing. The military-owned Canteen Stores Department (CSD), a discount retail network, has also expanded to major cities.

The general perception among Pakistani consumers is that the prices in the larger and more upscale stores are higher due to higher overhead and capital investment costs.

Many consumer retail stores stock general merchandise for everyday use. Also, many stores sell a single commodity, for example, tires, cooking utensils, clothing brands, textiles or jewelry. Such stores are generally located in bazaar areas and tend to be located near other shops carrying similar goods.

Foreign companies considering marketing their products in Pakistan may choose to use the services of local distributors or may develop their own distribution chain. Distributors in the urban areas generally deal on an exclusive basis.

As a matter of policy, most companies do not provide credit to distributors, and they in turn generally sell on a cash basis to small retailers, but do supply on short-term credit to large retailers that offer a heavy turnover.

Pakistan’s wholesale market is fairly well developed, with about 3,000-4,500 big wholesalers. Karachi is the major distribution center for wholesale goods. Approximately one-fifth of the wholesalers in Karachi sell on a consignment basis. Less than one-third of wholesalers allow discounts to their customers, but the granting of 30- to 90-day credit is common. Because of limited financial resources, retailers generally sell on a cash-only basis. Consumer credit in Pakistan remains an insignificant portion of the total commercial credit. Foreign companies selling industrial or capital goods often sell directly to the end-user or, if the market is fairly large, they appoint one major distributor who then sells either to sub-distributors or directly to end-users.

Trade Promotion and Advertising

Over a dozen major advertising agencies operate in Pakistan, including foreign-based affiliates. Advertising agency commissions are usually 15 percent of the cost of the advertisement. By U.S. standards, these agencies are fairly small concerns, with average annual billing of less than $20 million each.

Television and newspapers are the most widely used mode of advertising. Others include radio, billboards, periodicals and trade journals, direct response advertising, slides and commercial film shorts in movie theaters, short messages (SMS) through cellular phones, as well as internet-based social media.

Pakistan has over 700 daily newspapers and weekly, biweekly, and monthly magazines. The daily Jang, published in Urdu, is the largest newspaper with a claimed national circulation of almost 900,000. Combined circulation for the roughly 11 English-language newspapers is approximately 300,000. The principal English-language daily newspapers are Dawn (published in Karachi, Lahore and Islamabad), The News (Islamabad, Lahore and Karachi), The Nation (Lahore and Islamabad), Daily Times, Express Tribune and The Business Recorder (Karachi). Although the English-language press reaches only a small fraction of the population, it is influential in political, business, academic and professional circles.

The Friday Times, published from Lahore. Several special interest magazines such as Spider (Internet), Computerworld (Computer and IT) and Mobile Communications and Flare are steadily gaining prominence. Almost all newspapers in Pakistan are now available on the Internet.

Television is broadcast on state-owned Pakistan Television and several other local channels, using the PAL system. English language programs, including news, are available on several satellite channels.

Cable and Satellite Television: Cable television has been available in Pakistan for more than ten years and  channels continue to become more professional and organized. Broadcast media is regulated by the Pakistan Electronic Media Regulatory Authority (PEMRA), which has issued 106 licences for the establishment and operation of Satellite TV Channels, 257 licences for FM Radio Stations, 4062 for Cable TV Service and 61 in other categories  It is estimated that cable television reaches approximately 30 percent of households in Pakistan. Regulatory details about broadcast media are available on the PEMRA website.

Satellite television broadcasts have made rapid inroads in Pakistan and it is estimated that more than 500,000 medium to high frequency dish antennas are presently installed in the country, although, with the advent of cable TV, the popularity of direct satellite television is gradually diminishing. More than 100 channels are received via satellite. The most popular transponder received in Pakistan is “Asiasat”.

Radio Pakistan reaches audiences within the country and abroad in 36 languages (19 regional and 17 foreign) from 24 medium and short wave stations and more than  25 FM stations. The FM license granted by the government does not permit them to broadcast exclusive news and current affairs programs.

Pakistan currently allows trade-advertising material other than commercial catalogs to enter duty-free, but levies a 15 percent sales tax on those items. Samples may be admitted duty free only if they are representative parts of a complete shipment or are unsuitable for sale. The duties applicable to commercial shipments apply to samples having a commercial value.

Trade Shows: The textile and apparel, leather and gemstones industries hold regular trade shows. Recently, the telecommunications, safety and security, higher education, information technology and oil and gas industries have become active in this area. Trade and seminar missions can also provide valuable first-hand insights into the Pakistani market, as well as serving to introduce U.S. equipment and technology. Trade missions can educate government and other end-users about product availability, technical characteristics, quality, and price, and can establish contacts with key organizations to promote product awareness. Presently, the trade show business in Pakistan is suffering tremendously from the security situation.

U.S. firms should also consider participation in regional events (focusing on either South Asia or the Middle-East) in order to reach potential Pakistani purchasers, agents, and distributors.

Sales Service/Customer Support

In Pakistan, the end-user generally requires comprehensive and reliable after-sales support on all durable and non-consumer items, accompanied by good documentation and instructions for product installation, operation, and repair. Many purchasers choose a complete turnkey package, which often includes employee training.

Foreign sellers generally require local agent/distributors to maintain a certain minimum inventory of spare parts. Most agents provide a warranty and “free maintenance” for one year, building the cost of maintenance into their overall price.

It is a common practice for end-users to demand a guarantee that the supplier will respond to questions or rectify faults in the equipment within a specified period of time. The time period may vary from a few hours to several days, depending on the nature of the product and possible faults in the equipment.

Local Professional Services

The U.S. Commercial Service offices located in Islamabad, Karachi and Lahore maintain contact with reputable companies that offer various services and may be of assistance to U.S. businesses in completing a specific task in this market. Contact information for these service providers may be obtained directly from the individual offices. Pakistan has a fairly sophisticated services industry offering professional lawyers, accountants, business and management consultants, IT experts, and advertising professionals.

Various professional services are listed on the following website, which is Pakistan’s online Yellow Pages.

Principal Business Associations

American Business Council (ABC):

The American Business Council of Pakistan (ABC), founded in 1984,is one of the largest investors group in Pakistan, currently with 66 members, most of which are Fortune 500 companies. Only U.S. based companies are allowed to join ABC.  They operate in various sectors i.e. healthcare, financial services, information technology, chemicals and fertilizers, energy, FMCG, food and beverage, oil and gas, locomotive and railroad equipment, and electrical power generation. ABC members have cumulative revenues of U.S. $3.73 billion.

American Business Forum (ABF):

The American Business Forum (ABF) was established in 2008 as a premier trade body representing American businesses (wholly-owned subsidiaries, franchisees, and licensees) operating in the central and northern regions of the country. Headquartered in Lahore, ABF membership comprises 42 U.S. companies, who operate in a variety of industry sectors including food & beverages, franchising, hospitality, agricultural seeds and equipment, energy, ICT, drugs & pharmaceuticals, financial services, and education.

U.S. Pakistan Business Council (USPBC):

An affiliate of the U.S. Chamber of Commerce, the USPBC is the leading business private sector association of U.S. companies with business and investment interests in Pakistan.

Limitations on Selling US Products and Services

Foreign entities can establish, operate, and dispose of interests in various sectors; however, the food and beverages industry have some limitations, including requirement of halal certifications, labeling requirements, a ban on selling alcohol and importation of U.S. beef into Pakistan due to non-harmonization of health certificates for beef between the United States and Pakistan.


Product pricing is often difficult for new entrants to the Pakistan market, principally due to the country’s complex tax structure. Foreign companies represented by a local agent, distributor, licensee, or other intermediaries generally work closely with their local affiliates in determining prices.

Relatively high shelf prices frequently include a substantial tax component, which can add nearly 40-45 percent to the retailer’s purchase price. High prices and taxes for imported consumer items have created a large market for goods coming into Pakistan through “informal channels. Expatriate Pakistanis and professional couriers bring in large quantities of goods from the Middle East Gulf region in their personal baggage. Goods are also frequently smuggled from Dubai via sea, misrepresented as destined for the Afghan market to avoid import tariffs, or undervalued on bills of lading to evade taxes. In some segments of the market, goods brought through these channels have market shares ranging from 50 to 95 percent.

As an illustration of the scale and complexity of various taxes and duties imposed on imported consumer items, marketers of products build into their final sales price the following factors: landing charges (approximately 1.0 percent of initial price); customs duty; sales tax; bank charges; insurance, provincial revenue tax (if applicable), and the general sales tax.

Pricing of non-consumer items is based on different parameters. Most foreign companies in this market segment are also represented by agent/distributors and give their local affiliates significant latitude in pricing decisions. Agents often opt for higher sales turnover by reducing their margins, allowing them to generate more revenue through a higher volume of sales. In other cases, local agent/distributors may add up to 30 percent to the list price as their commission, depending on the nature of the product. For duty and tariff purposes, they quote the principal’s list prices only. On average, retailers markup imported machinery and equipment by 10 to 15 percent and imported general merchandise 20 to 30 percent.