The changing structure of distribution channels in Pakistan

by Asad Aman and Gillian Hopkinson

International Journal of Retail & Distribution Management, 2010 Volume: 38, Issue: 5, 341 - 359

Abstract: Purpose - The purpose of this paper is to consider the impact of the entry of international wholesalers upon existing fast moving consumer goods (FMCG) channel structures and the relationships between channel members in Pakistan.

Design/methodology/approach - The paper draws on primary and secondary data. Industrial and published sources are used to describe the retail industry and traditional channel structures in Pakistan. Semi-structured interviews with industry experts and channel participants (manufacturers, distributors, local and organised wholesalers and retailers) over the period illustrate the perspectives of different channel members.

Findings - Although currently holding small market share, the entry and growth of international, consolidated wholesale has opened alternative channel structures. This poses a threat to some channel members and creates relationships that alter the distribution of power in the channel. In this fluid situation, there is the possibility of substantial change in Pakistan's FMCG retail.

Research limitations/implications - The nature of the Pakistan retail market creates difficulties in compiling statistics or generalising from observations. The paper uses published statistics, industry reports and interviews to nevertheless be able to comment on this important market.

Originality/value - The paper looks at an under-researched market and comments upon the first steps in that market towards consolidation and internationalisation. In looking at the reactions of extant market players to this recent development, the paper provides useful insight and guidance to those (manufacturers, retailers and analysts) interested in retail in Pakistan.

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