A few years ago, a quiet tech revolution began brewing in Pakistan’s labyrinthine retail sector. As Pakistan’s tech sector finally started to attract serious amounts of venture capital from global investors, the sector that attracted the most money by far were the multiple players that set about trying to modernise this large segment of the Pakistani economy.
Four companies jumped into the fray, and each raised massive sums of money, or at least massive by Pakistani standards: Bazaar ($108 million in total capital raised), Dastgyr ($41 million raised), Retailo ($60 million raised), and Tajir ($19 million raised). Â
The thesis was straightforward: the retail sector may have narrow margins, but its filled with multiple layers of middlemen for every product. Cut out the middlemen, pass on part of the savings to the retailer, and therefore the consumer, and create a comfortable margin for yourself. And the pandemic made Pakistanis more open to transacting online, which made the opportunity even more irresistible. Three of the four companies got their start in 2020, with only Tajir having started earlier in 2018.
But the streets of Pakistan are paved with more than just ambition. As the kiryana store owners watched these tech whizzes roll in with their apps and promises of efficiency, many could not help but smirk. After all, their shelves were stocked with stories of failed revolutions. Retailo, however, believed it could be different. They aimed to digitise and streamline the procurement process, cutting out the middlemen and giving these small shops access to products with a click of a button, promising next-day deliveries and the ease of a digital marketplace.Â
Fast forward a few years, and only Bazaar appears to be largely committed to that initial vision with some degree of success. Most of the others have seen the hype die down. And Retailo, it seems, has decided to go off into a different direction entirely.
The startup faced a grim reality: Pakistan’s logistics landscape was far more stubborn than the founders initially envisioned. Dreams of a streamlined B2B distribution model started to buckle under the weight of harsh market realities—rising costs, entrenched competitors, and a bruising economic landscape that seemed unwilling to budge. And so, with survival on the line, Retailo turned to something that tech founders are famously good at: the pivot. The new buzzword? SaaS—Software as a Service. But can this pivot truly be Retailo’s knight in shining armour, or is it just another desperate gambit to stay afloat? The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
