aiSight.ai (formerly SurveyAuto), a technology firm, has performed a retail census of all traditional/kiryana shops in Pakistan numbering approximately 800,000 outlets. Based on documentation of their procurement sources, the firm has reported that 70% shops purchase their supplies from wholesalers instead of through a distributor of an FMCG company.

Dr. Umar Saif, Founder of aiSight.ai posted on social media, saying that "wholesale serviced shops are not ideal as there are frequent stock outs, they don’t benefit from trade promotions, there’s little control over pricing, in-store execution or merchandising. This negatively impacts revenue. Global standard is 20-30% shops serviced via wholesaler. In Pakistan, this seems to be reverse!"

Based on market information, a wholesaler fulfills orders from retailers and assumes a key role in satisfying retailer demands including providing informal credit. A distributor, on the other hand, in addition to executing passively received orders, acts as a sales representative for the FMCG company or producer. Nevertheless, the trend is changing especially with the addition of innovative e-commerce companies such as Dastgyr, Bazaar, Retailo and Tajir.

In addition, Dr. Saif stated that his company is working with FMCGs to use the collected data to optimise their route-to-market strategy with a goal to substantially increase availability of their products and enhance market share across the country.

A map, also shared in the post, shows a comparison of shops in Karachi which get their supplies from an FMCG Company (Distributor) vs. Wholesaler.

"There's also massive scope for B2B e-commerce companies (to displace the inefficient wholesale channel) and FinTech companies (to extend retailer credit to these shops) to use aiSight.ai data.", Dr. Saif concluded.