Post covid opportunities
The disruption of global supply chains during the pandemic outbreak has forced a rethink of the ideals of market economies and countries are resorting to protectionism, on the pretext of national self-sufficiency. The lockdowns have resulted in closures of retail outlets in the export markets.
Despite the new challenges, the crisis has also created a set of opportunities for Pakistan in the short, medium and long term.
Price-sensitive Products
With the global recession and mass unemployment becoming a reality, the disposable incomes will shrink, and consumption patterns will change, creating new winners and losers. In the face of economic crisis, the consumers are willing to buy less expensive luxury goods, what is termed as the “lipstick effect”. It has created sustained opportunities for Pakistani suppliers, since their traditional strength is the lower to lower-middle price segment of import markets including Australia.
New Sources of Supply
Due to the disruption in global supply chains during the Wuhan phase of the pandemic, the Australian companies have realised the risks of over-reliance on limited nodes of supply chain, for essential supplies. The Australian enterprises are diversifying their supply chains, thereby creating opportunities for Pakistani enterprises to penetrate some of the hitherto-impermeable supply chains. Agility and competitiveness will be the critical success factors to tap these opportunities.
New Products
The social distancing and other lifestyle adjustments of Australian consumers are creating new winners and losers in the product and services domain. In the short term, sanitisers, soaps, toilet paper, protective masks, home office furniture and equipment remain high in demand. In the medium to long term the selfcare products and apparel can have sustained growth. Pakistan can benefit from its comparative advantage in textiles and leather products to diversify into new product range – fabric masks, protective gear, footwear and personal care products. Besides, Pakistan can venture into new products e.g. paper products and sanitisers, leveraging the indigenous raw material base of ethanol.
E-Commerce
With social distancing becoming the new social norm, physical retailing is conceding its ground to online retailing in the Australian market. The traditional privilege of physical retailing i.e., sensory testing of the product would be abated since the touching and trying the product in store would be considered ‘unhygienic’. Besides, the social distancing compliance multiplies the space requirement of retail outlets, making it uneconomical. Consumerism, both essential and discretionary, has no option but to be fulfilled through online retailing. With the advantage of physical retailing being offset, the overseas exporting enterprises (e.g., Pakistani exporters) can swiftly carve out their share in e-commerce provided they are able to develop functional shopping platforms, convenient payment solutions and agile delivery mechanisms.
IT and IT-enabled Services
Being forced into the work-from-home model, Australian enterprises are realising the benefits of reducing office and operational costs by allowing employees to work from home. With the transformation of workplace, the home-office equipment and outsourcing of functions overseas will become more viable than before. Coming from a reasonably sound production base, Pakistan’s ICT industry, especially Fintech, Business Process Outsourcing, Consultancy and Software Development can claim a significant share in the post-corona marketplace.
The most critical factor in Pakistan’s ability to capitalise on these opportunities is the agility of the enterprises to quickly transform their production lines to grab the immediate demand of new product categories.