LAHORE: A quiet but transformative shift is reshaping Pakistan’s retail landscape. For decades, manufacturers relied almost entirely on wholesalers and small neighbourhood retailers to sell their products.
But over the past 20 years, Pakistan has witnessed a remarkable evolution: manufacturers are increasingly selling directly to consumers through dedicated outlets, franchise networks, e-commerce stores and social media platforms. This move is not only redefining business models but also disrupting traditional retail structures.
The earliest wave of this transition emerged in the early 2000s when a Lahore-based bakery expanded aggressively. From a modest confectionery producer, it grew into a diversified food company offering soft drinks, mineral water and packaged foods. It then launched its own retail network across Lahore, setting a precedent that traditional producers could reach consumers directly without middlemen. Although it remained a largely Lahore-centric phenomenon, the idea took root.
The second and more powerful wave came from the textile sector. What began as a small experiment by a apparels business became a national success story. The brand targeted a wide consumer base, from low-income buyers to affluent fashion enthusiasts, proving that direct retail allowed manufacturers to understand customer preferences better, innovate faster, and develop value-added products. The company’s meteoric rise startled the larger and older textile groups, many of whom had previously relied solely on wholesale networks and export markets.
Today, nearly all major textile producers operate extensive retail networks, with 100-200 outlets nationwide and between 12-25 stores overseas, especially in the Middle East, UK, US, and Southeast Asia. Their product ranges have expanded dramatically, from fabric and ready-to-wear apparel to cosmetics, accessories, shoes, home textiles and children’s clothing. Many of these items are produced locally or imported but sold under the company’s brand name, creating a diversified consumer ecosystem that mirrors global retail giants.
Pharmaceutical chains have followed a similar path, expanding aggressively across major cities. While many remain confined to their home regions, the trend signals the rise of organised retail even in traditionally fragmented sectors.
This shift has profound implications for Pakistan’s small retail sector. Direct retailing reduces the dependency of producers on wholesalers and traditional neighbourhood shops. As manufacturers capture a larger share of the retail margin, small retailers find themselves squeezed on two fronts: Reduced variety and bargaining power, because branded products increasingly prefer exclusive distribution. Lower customer footfall, as urban shoppers increasingly trust branded outlets for quality, ambiance, and return policies.
The rapid rise of outlet malls and e-commerce has intensified the pressure. Pakistan’s small retailers, unlike those in India and Bangladesh, are also less digitally integrated, which leaves them more vulnerable.
For consumers, however, this trend has brought several advantages like lower prices from reduced middlemen margins. They also get greater variety and consistent quality. These company outlets have better return/exchange policies, almost unheard of in traditional retail. There is more transparency, as large manufacturers publish product information, warranties, and quality assurances.
E-commerce has enabled consumers in smaller districts, previously underserved by large brands, to access quality products directly from producers without traveling to big cities. This trend is good omen for our economy because direct-to-consumer retailing strengthens the formal economy by increasing tax documentation, improving quality standards, creating formal jobs in logistics, digital marketing, supply chain, and retail operations, and enhancing export potential through branded stores abroad.
Pakistan is catching up, but still lags behind India, Bangladesh and China in branded retailing. India has dozens of homegrown brands with thousands of outlets and a massive e-commerce ecosystem. Bangladesh, though strong in garment production, is still behind Pakistan in local brand retailing but ahead in global brand penetration and exports.
Pakistan is in the middle -- ahead of Bangladesh in domestic brand development but far below India and China in scale, sophistication and export reach.
The rise of producer-owned retail in Pakistan represents a structural shift in the economy. It challenges traditional retail, empowers consumers and pushes manufacturers towards branding, innovation and global outreach.
