Small Entrepreneurial Sector in Pakistan

A new class of entrepreneurs has emerged in Pakistan during this decade who, in small but significant ways, have challenged the religious orthodoxy. They present a sharp contrast to the rising wave of Islamic radicalism that the U.S. and others view as an existential threat to Pakistan. And with many well-traveled Pakistanis importing ideas from abroad, they are contributing to Pakistan's 21st-century search for itself.

The new entrepreneurial outfits range from fashion apparel and cosmetics to upscale restaurants, personal fitness clubs and places offering men's hair transplants.

The consumer-driven growth started during Musharraf years has fueled the spread of a middle class in Pakistan's biggest cities. For decades after independence in 1947, a handful of extremely wealthy industrial families dominated the economy. In the 1970s, nationalization of important industries gave the government a major economic role. In recent years, a privatization program has sought to shrink the state's hand, while introducing more investment and competition. In an effort to promote small businesses, President Musharraf's government eased credit availability for entrepreneurs in the country.

While most of the entrepreneurs cater to Pakistan's young, urban consumers, there are a few who have found highly unusual niches for export markets. For example, Integrated Dynamics of Karachi designs, builds and exports unmanned aerial vehicles used by the US for border patrol duty on its southern border with Mexico. Recently highlighted by the New York Times, AQTH offers a more shocking example of a small, entrepreneurial Karachi company that caters to the $3 billion a year bondage and fetish industry in the United States and Europe. AQTH's mom-and-pop-style garment business earns more than $1 million a year manufacturing 2,000 fetish and bondage products, including the Mistress Flogger, and exporting them to the United States and Europe.

The company sells its products to online and brick-and-mortar shops, and to individuals via eBay. The company's market research shows that 70 percent of its customers are middle- to upper-class Americans, and a majority of them Democrats. The Netherlands and Germany account for the bulk of their European sales. Company workers who assemble the handmade items — gag balls, lime-green corsets, thonged spanking skirts — have no idea what the items are used for. Even the owners’ wives, and their conservative Muslim mother, have not been informed.

Overall, the entrepreneurial class remains a sliver, just over a million people by some estimates., according to the Wall Street Journal. In addition to small export niches, much of the business is confined to pockets of urban wealth that most Pakistanis won't experience in their lifetimes. And yet, the brief business careers of many entrepreneurs show how rapidly dramatic change can unfold in Pakistan.

Related Links:

Pakistan's Foreign Visitors Pleasantly Surprised

Start-ups Drive a Boom in Pakistan

Pakistan Conducting Research in Antartica

Pakistan's Telecom Boom

ITU Internet Data

NEDUET Progress Report 2008

Pakistani Entrepreneurs in Silicon Valley

Musharraf's Economic Legacy

Should Pakistanis be Proud of Their Country?

Comments

Riaz Haq said…
Here's a WSJ story on a high-priced designer Peshawari chappal knock-off:

Imitation, it is often said, is the sincerest form of flattery, but many in Pakistan failed to take the compliment when British designer Paul Smith released a new sandal bearing close resemblance to the country’s Peshawari chappal (slipper), called it Robert, and sold it for $595.

The company received a torrent of abuse on social media for the design on Monday.

While the Pakistani sandal sells in markets across the country for around $6, Paul Smith’s version of the shoe is on sale for a 9,816% mark up.

Most of the criticism on Twitter focused on the sandal’s price, while others called for Paul Smith to give credit to the shoe’s Pakistani origin.
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The Peshawari chappal is originally from the northwestern town of Peshawar, but is today manufactured across the country. You can find the shoe from Karachi to Gilgit and on the feet of markets traders, government officials and young bridegrooms.

“It is as much of a part of our national identity as is the chicken tikka in our traditional cuisine,” said journalist Madeeha Syed of the shoe in an article for local English-language newspaper, Dawn.

Paul Smith’s version of the sandal is not the first time that the quintessentially Pakistani shoe has ventured overseas. A number of Pakistan-based online outlets already sell the sandal to customers around the world. They mostly target the widespread Pakistani diaspora, but the sandal has also proved very popular in France, says Sidra Qasim, co-founder of Hometown, a Pakistan-based online shop that sells Peshawari chappals.

“They like it because it has quality and good design and it is having a good impact,” she told The Wall Street Journal.

Hometown was started in 2010 by Ms. Qasim and Waqas Ali with the goal of providing a bigger market to local shoemakers in Pakistan. All the shoes sold by Hometown are made by a small group of craftsman in a small village in Punjab province, and are sold via the company’s site in 17 different countries. The biggest markets are India, the U.K. and France, said Ms. Qasim.

Despite the outrage from Pakistan’s vocal Twitter population, Ms. Qasim said that she thought it was mostly positive that Paul Smith had decided to use the Pakistani design in his summer collection.

“One thing we are very concerned about is that Hometown is about promoting Pakistani artisans to the global level, so at least they [Paul Smith] should give the right credit,” she said, “We are really happy, on the other side, that someone on the global level has recognized this design”

Hometown’s version of the Peshawari chappal starts at $90 – still a steep markup from the average market price. Another Peshawar-based online chappal shop, Zalmay, sells the sandals for around £27 ($45.)


http://blogs.wsj.com/indiarealtime/2014/03/11/how-paul-smith-sandals-peeved-pakistan/
Riaz Haq said…
Inside #Pakistan’s #sex-toy industry. #dildo #fetish #leather #steel https://www.economist.com/news/asia/21724426-did-i-say-out-loud-i-meant-makers-leather-and-metal-goods-inside-pakistans-sex-toy-industry … via @TheEconomist

INSIDE a small, gloomy factory in a provincial city in Pakistan, two young men huddle over a grinding wheel. They believe they are making surgical instruments. But like many of the small, local firms manufacturing steel and leather goods for export, their employer has a new sideline. The nine-inch steel tubes whose tips the men are diligently smoothing are, in fact, dildos. “It’s just another piece of metal for them,” says the firm’s owner, who picks one up to show how his worldlier customers—all of them abroad—can easily grip the gleaming device.

This surreptitious set-up is inevitable. That a country as conservative as Pakistan exports anal beads, gimp masks and padlockable penis cages, among other kinky wares, would shock locals as much as the Westerners whose hands (and other parts) the finished products end up in. Fearing the response of religious hardliners, many of the companies involved do not advertise their wares on their own websites. Instead, they list the saucy stuff through Alibaba, a Chinese e-commerce giant that acts as a middleman for many businesses in the developing world. Some officials demand bribes to allow the exports to flow. Others are simply unaware of the potential for mischief in, for example, a Wartenberg Pinwheel—a spiked disc that can be run across the skin.

The risk has so far proven worthwhile. A local maker of leather goods, one of 64 sex-toy suppliers based in the city that list on Alibaba, says that only a small proportion of its sales comes from fetish gear. But the company can earn as much as 200% profit on a kinky corset or policeman’s uniform, compared with just 25% on mundane jackets and gloves, its original business. To minimise the potential for outrage, production lines are arranged carefully, with only trusted staff putting on the final spikes and studs. To those who complain that the products the firm makes might encourage unmarried or gay people to fornicate—an illegal activity for both groups in Pakistan—the owner’s son has a ready riposte. “What if a gay person wears a [normal] jacket that was also produced by us?” he asks. The company does not know, and has no business knowing, how customers use its products, he says.

Less flexible businessmen may be missing an opportunity. Buoyed by the international success of “Fifty Shades of Grey”, an erotic film that was not released in Pakistan (although locals have posted plenty of spoofs on YouTube), global sales of sex toys have reached about $15bn a year. And recent developments favour Pakistan. Local firms cannot compete in rubber toys, as the latex they would have to import from China is subject to a hefty tariff. But Western customers increasingly opt for alternative materials, including metal, in the wake of reports that many Chinese toys contain a carcinogenic chemical. Back in his office, the owner of the metal-working factory invites your correspondent to feel how smoothly his labourers have polished a dildo. “You can use Pakistani steel for a long time,” he says, approvingly. “It rusts much later than Indian or Chinese.”

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