Pakistan is one of Asia's fastest growing markets, and investors and foreign companies are positioning themselves to take a share of the growing pie.
Pakistan is rapidly digitizing.
The country’s internet user base grew nearly 22% in 2017, making it one of Asia’s fastest-growing internet markets.
However, despite substantial growth in the internet space, the country’s tech ecosystem remains largely under the radar. This is partially due to the fact that its population size pales in comparison to other high-growth countries like India, which offers a substantially larger addressable market.
That said, several investors and foreign companies see an opportunity in Pakistan’s nascent market, positioning themselves early as more people come online. Many of the country’s most popular digital services are local offerings from foreign companies.
We analyzed some of the activity being carried out by these foreign companies.
FOREIGN COMPANIES PUT THEIR STAMP ON PAKISTAN’S TECH SCENE
The Badshahi Moque in Lahore, Pakistan.
Many of the companies leading the way in Pakistan’s new digital economy are from outside the country or owned by foreign entities. Below we look at some of the most prominent players.
Foodpanda: Rocket Internet’s Foodpanda, which was acquired by Germany’s Delivery Hero in Q4’16, has operated its food delivery service in Pakistan for many years. It bought local rival food delivery startup EatOye in Q1’15 and is considered the country’s foremost food delivery company.
Rocket Internet: Rocket Internet also operates its online retail subsidiary Daraz in Pakistan. It also separately operated a classifieds site, Kaymu, which it folded into Daraz in 2012.
Daraz is considered the country’s most popular e-commerce site. Daraz is also the country’s most well-funded tech company. Its only fundraise, a $55M Series A round raised in Q3’15, is larger than the total funding of any other tech company in the country.
OLX: Without the direct presence of major e-commerce players like China’s Alibaba, the US’ Amazon, and India’s Flipkart, the contest to become Pakistan’s dominant online shopping destination is still up for grabs.
Amsterdam’s OLX, which is owned by South Africa’s Naspers, is a Craiglist-esque classifieds website that’s popular in the country. In 2015, it bought rival classifieds site Asani. Currently, its biggest competition is e-commerce site Daraz, which, unlike OLX, does not allow merchants to sell directly on its platform.
Careem: Competing with Uber in Pakistan is the UAE’s Careem, which has raised $771M and is considered a unicorn (valuation over $1B). Careem has raised funding from Chinese ride-hailing company Didi Chuxing, Japan’s Rakuten, and Saudia Arabia’s Saudi Telecom Company.
In Q4’18, it raised a $200M series F round that involved multiple investors from Saudi Arbia, including Al Tayyar Travel Group and Kingdom Holding Company. According to rumors, Uber has discussed possibly acquiring Careem. Careem is also suspected to be entering food delivery.
Uber: The international ride-hailing giant is beginning to expand in Pakistan. As of May 2017, Uber is available in seven cities across Pakistan.
CHINA ENTERS VIA ALIBABA, ANT FINANCIAL, AND SMARTPHONES
In March 2018, Chinese e-commerce giant Alibaba was rumored to be looking to buy e-commerce site Daraz, which is the online retail subsidiary of Germany’s Rocket Internet in Pakistan.
Its financial arm ANT Financial already has a presence in Pakistan. In March 2018, Telenor’s Pakistan subsidiary, which it fully owns, signed an MoU with Alibaba’s financial arm, ANT Financial. ANT will invest ~$184M in Telenor’s microfinance bank, taking a 47% stake.
Chinese smartphone brands like OPPO, Infinix, and Xiaomi are also active in Pakistan. In 2017, according to IDC data, three of the top 5 best-selling phones in the country were created by OPPO. The other two spots were Samsung products.If you aren’t already a client, sign up for a free trial to learn more about our platform.