Barring food and pharmaceutical industries, retail, wholesale and transport sectors faced a crisis due to the closure of markets, shopping malls and commercial centres in March and April last year to control the spread of Covid-19. In later months, trading activities picked up pace gradually.

As a result, the services sector posted a negative growth of 0.59 per cent in 2019-20.

The wholesale and retail trade sector, which depends on the output of agriculture, manufacturing and imports, declined by 3.42pc. The decline in industry and imported products pulled growth of this sector downwards while overshadowing the positive contribution by agriculture. The transport, storage and communication sector dropped by 7.13pc due to the ban on railways, air transport and road transport, particularly public transport, in March and April.

In July-October last year, total exports of the services sector plunged 11.45pc to $1.62 billion while total imports suffered a fall of 22pc to $2.4bn.

Imports of services relating to transport, travel and insurance/premium services stood at $729m, $247m and $71m in July-October compared to $1.119bn, $539m and $90m in the same period a year ago. Imports of telecom, computer and information services improved to $155m from $119m.

Exports of services in transport and travel declined to $130m and $121m in July-October from $267m and $169m in the same period of 2019. Exports in construction and telecom/computer and information services stood at $39m and $95m versus $79m and $437m.

Online businesses are thriving while footfall in hotels and restaurants remains unaffected

The country is now in the grip of a second wave of Covid-19 in which non-food business/commercial activities have been confined to curb the soaring intensity of the pandemic. The unrestricted buying and selling of non-food items are taking place mainly online while the online food businesses have been thriving. Consumers’ footfall in hotels and restaurants has been showing normal trends.

Owners of non-food shops pull down their shutters by 8pm. The transport sector is feeling the pinch.

Consumers in 2020 remained in trouble owing to high food inflation. Karachi Wholesalers Grocers Association (KWGA) Patron Anis Majeed said 2020 was the year of “high food prices in flour, sugar, ghee and cooking oil, pulses etc”.

However, food-related sectors recorded massive sales when philanthropists, welfare organisations and individuals lifted rations in bulk quantities for the needy during the countrywide shutdown of industrial and trading activities in April and May, he said. Sales of food items in the last six months also remained brisk.

For 2021, Mr Majeed said food demand will remain positive but the government should try to control the exchange rate. Otherwise, the rupee’s devaluation against the dollar will bring local prices under pressure because of imported raw materials and finished food items.

Karachi Retail Grocers Group (KRGG) General Secretary Farid Qureishi said consumers have been paying high food prices and utility bills along with taxes and duties without getting any facility from the government.

“I do not see 2021 as a recovery year for consumers owing to the lack of any signal from the government that can lower prices, reduce financial burden on low- and middle-income consumers and control their costs of living,” Mr Qureishi said.

On the contrary, an importer of fast-moving consumer goods (FMCGs), Yahya Haroon, termed 2020 as a challenging year. Post–Covid-19, purchasing behaviour and buying power of consumers towards imported FMCGs were immensely affected, thus bringing down the import volumes of these items, he said.

Mr Haroon said curbs on legal imports can only be justified once smuggling is restricted and local businesses get a level playing field.

He expressed hope that better sense would prevail in 2021, encouraging business activities through long-term policies.

Careem Pakistan CEO Zeeshan Hasib Baig said Careem temporarily suspended its services in some cities in Pakistan at the start of the pandemic. Initially, the ride-hailing business went down by over 80pc.

With decent recovery after the relaxation in the lockdown, the company saw strong growth in delivery and food segments, he said.

“Now we expect a full recovery to happen for rides business by the end of 2021 and foresee promising growth of deliveries and food businesses,” he said, adding that Careem is well-positioned to “come out stronger” than before and is “doubling down” on services such as the delivery of food, items of essential needs or just about anything.

“We have experienced double-digit growth in our engagement levels for various use cases after the launch of Super App in June 2020,” Mr Baig said. He expects a promising 2021 on the back of rides recovery and growing food and delivery use cases in Super App.

“For Careem, while we expect that in 2021 ride hailing will still be the major portion of overall volume/transactions, we do expect much higher growth in the food and deliveries business versus the rides business,” he said, hoping that the rides business will fully recover by the end of 2021, whereas the food and deliveries business is expected to be much bigger than the current and even pre–Covid-19 base.

Since April (beginning of the pandemic), Careem made a strong recovery in the rides business and grew 12 times once the lockdowns were lifted. The food and delivery business was not impacted much during the lockdown. It actually grew 10 times over its pre–Covid-19 base. Considering current customer trends, the food and delivery business will undoubtedly pick up its pace significantly in the years to come, Mr Baig added.

“We expect ride-hailing to recover 100pc by the end of next year,” he said.

As for the impact of a massive drop in the imports of used cars, he said: “I do not expect a fall in imports of used cars to be a risk to our recovery as we have rickshaws and bikes also in our portfolio.”

Uber Pakistan General Manager Saad Naveed Pall said Uber quickly shifted its business model to focus more on the delivery side since the outbreak of the pandemic. “As lockdown restrictions eased, we continued modifying our delivery product to introduce Uber Connect, a delivery tech solution that enables users to send/receive packages and request deliveries through the Uber app.”

He believes this additional service will further support the growing community of customers and drivers who have come to depend on Uber, especially as the country deals with a second Covid-19 wave.

Uber has already witnessed a significant recovery in the number of rides after the initial lockdown measures were lifted, he said. “We are confident that this rise in demand will continue in 2021.”

Karachi Transport Ittehad (KTI) President Irshad Hussain Bukhari said 2020 was a bad year for the transport sector, especially in Karachi as neither the Sindh government nor the private sector introduced new buses or coaches.

Currently, the city has 7,000 coaches, mini buses and buses, down from 25,000 in 2010. One can estimate the loss of employment based on the average ratio of three to five people per vehicle.

While holding the Sindh government responsible for the pathetic transport system in Karachi, he said only the provincial government is capable of changing the transport sector in 2021.

All Karachi Tajir Ittehad (AKTI) President Atiq Mir said he expects 2021 may be a good year depending on the arrival of the Covid-19 vaccine and its positive result. “This will at least boost the confidence of the masses to move freely,” he said.

All Pakistan Restaurants Association (APRA) Convener Athar Sultan Chawla said the government’s decision to restrict outdoor dining resulted in the shutting down of 25pc outlets all over the country in 2020.

He agreed that the online food business improved 25pc. “But restaurants and hotels rely heavily, sometimes up to 90pc, on the dine-in business,” he said. Currently, dine-in is allowed until 10pm while online business continues until 1am.

Mr Chawla said that going forward a lot will depend on the government’s policy and the number of cases as restaurants. “Hotels have been suffering while other businesses flourish,” he added.

Published in Dawn, The Business and Finance Weekly, January 4th, 2021