Imaginative Pakistanis adjusted to make the most of their trimmed Eid budgets and celebrate the biggest festival of the Muslim calendar.
Where there was a need, parents swallowed the pride, even endangered life, to access whatever resources they could garner from wherever possible to buy joy for children and participate in festivities.
Eid economy, marketeers projected, shrunk uniformly by about 40 per cent online and offline to about Rs432 billion in 2023, the lowest in a decade. Spending on the holy occasion was highest in 2018 when the Eid economy crossed a trillion mark to clock at Rs1.1 trillion.
The expenditure dropped in subsequent years with the economic slowdown and dipped to less than half of the highest mark of Rs480bn in 2021 amidst lockdowns, sanctions on social gatherings and Covid fears.
Eid economy shrunk by about 40pc to roughly Rs432 billion in 2023 — the lowest in a decade
The political chaos might have had its impact, but the pent-up demand of two horrific pandemic years drove the Eid market up to Rs720bn in 2022.
However, this was roughly the same level as almost a decade ago. In 2013, an intelligent guess, based on an extensive informal exercise of household spending on heads like, clothing, footwear, food, accessories, gifts and Eidi (cash distribution), etc, valued the Eid economy at Rs700bn.
Hyperinflation, massive lay-offs with suspension and shutdowns, pay cuts and an uncertain future did take its toll on the Eid economy in 2023. The official data (remittance inflows, pre-Eid bank withdrawals and the volume of new currency notes disbursed in Ramazan) will arrive with a lag.
The request to the State Bank for some indicative data that may help gauge the market trend was not dismissed by officials, but the material did not arrive on time for the story.
Abid Qamar, the chief spokesperson of the State Bank of Pakistan (SBP), responded thus: “The information is readily available as the relevant officers are still working on the subject. It will take a day or two to compile the data for sharing. As for remittance, the SBP release data on a monthly basis is not Eid specific.”
The projections, therefore, are based on interviews with businessmen, retail and wholesale leaders from all the provinces and consultants tracking online shopping trends.
“The generosity and empathy of Pakistanis for their less fortunate country persons is exemplary. The culture of giving and money transferred to the deserving made up at least 10pc of the projected volume of spending at Eid in Pakistan this year.
“The plunge in spending would have been much sharper had Pakistanis not been caring and sharing. Besides charities, better-off families have their orbits of needy persons who they support on occasion. It often includes not just their home staff but also their dependents,” said a businessman sounding more like a nationalist thinker.
The leaders of the retail sector, besides the regular ones in Karachi, including Nasim Khan from Balochistan and Naeem Mir from Punjab reported very low footfall in markets. “It did not feel like Eid during the first twenty-five days of Ramzan for the better part of the day in markets. The rush is visibly less, even in peak hours in the evenings. Many customers can be seen returning empty handed,” said Mr Mir.
Abid Umer, a marketing consultant advising a host of local and global brands, confirmed sluggish business on online platforms this year on Eid. “The online market lacks the usual excitement levels of customers for similar reasons — the erosion of buying capacity owing to record high inflation in the country. It is safe to say that the market shrunk by 40pc.”
Talking over the phone, he said there was variance in consumer behaviour and preferences among different segments of shoppers, but the spirit was not upbeat generally though the base of online shopping has expanded with time.
“Like elsewhere in Pakistan, many people switched to online purchases during the pandemic to avoid risky trips to bazaars. Many, particularly youth, are allured to online shopping platforms by attractive deals and sale offers by companies and virtual shopping malls. With higher customer trust and improvement in payment options and swift delivery services, the practice has become normalised with even older people joining in for convenience,” he added.
In Karachi, jewellers dealing in the sale and purchase of used ornament were kept busy. “The number of walk-in customers has dwindled. Mostly old customers are returning to sell or exchange ornaments,” Mohammad Manana told this scribe when approached in his shop in Saddar to get the feel of the busy old market.
“The exchange rate has rendered most imported consumer items beyond the reach of commoners. The children’s wear segment that used to be dominated by Chinese, Thai and Indonesian stocks is now ruled by local companies,” a retailer at Bohri Bazar said.
Majyd Aziz, Chairman of the Economic Council of Employers Federation of Pakistan, responded to the query and said, “2023 commenced on a sombre note with mills working much below capacity. The decrease in footfall of garments buyers and unstitched fabrics proves that millers rightly gauged the situation.” He said many market visitors indulged in window shopping as their budgets hardly cover basics.
“When demand for even garments plummets, what can anyone expect from big-ticket items? The sharp spike in automobile prices has pushed it beyond the means of the earlier buyers’ base. Construction cost hike put plans of home renovations on hold.”
He said galloping inflation eats up the gains of remittance recipients. “This year will be remembered as the worst year for Eid business.”
Gohar Eijaz, former All Pakistan Textile Manufacturers Association leader, believes that demand for cars and imported home appliances fell by 60pc this Eid.
“People are spending on basics such as garments and footwear with difficulty. They don’t even aspire to buy durables right now. The cost of raw materials has shot through the roof due to devaluation and manufacturers are struggling to secure their margins.”
Moin Fudda, the chairman board of directors of Central Depository Company and former MD KSE (now Pakistan Stock Exchange) who sits as an independent director on multiple boards, also mentioned widespread philanthropy in the country to ease the hardships of the poor.
He thought the lifestyle of the rich might not be affected, but the current economic situation has compromised the shopping capacity of the middle class this Eid.
Khurram Mukhtar, a textile tycoon from Faisalabad, believed that sales suffered this Eid significantly. “The drop seems to be in the vicinity of 40-50pc. People are struggling to cover food, rentals and other regular family needs. It would be naïve to expect liberal spending by them on Eid.”
“The closure of textile units depressed the supply of fabric in the market and drove prices higher. Two days before Eid, wholesalers and retailers are still unable to offload old, finished stocks,” he concluded.
Published in Dawn, The Business and Finance Weekly, April 25th, 2023