Fashion retail market: Daraz Pakistan playing key role in redefining dynamics

ISLAMABAD: Pakistan’s fashion retail market, valued at an estimated $10 billion, is undergoing a profound transformation, driven by the rapid rise of e-commerce, where e-commerce platforms such as Daraz Pakistan are playing a pivotal role in redefining the dynamics of this industry by bridging different segments and creating opportunities for greater consumer access and inclusivity.

This was stated by representatives of Daraz, while talking to media here on Wednesday.

“The market is divided into two distinct segments: a $2.45 billion regulated market and a $7.6 billion unregulated one. This dual nature reflects a blend of formal retail channels alongside informal, often cash-based, markets,” they added.

Daraz Pakistan, as one of the leading online marketplaces in Pakistan, has taken on the challenge of catering to diverse customer demands across various socioeconomic strata. Whether offering luxury apparel or budget-friendly options, the platform’s aim is to replicate and enhance the offline shopping experience in a digital ecosystem.

A significant driver of change in Pakistan’s fashion retail landscape is the shifting preferences of millennials and Gen Z consumers. These younger demographics have embraced ready-to-wear (pret) clothing as a practical alternative to traditional tailored garments. This shift reflects broader changes in urban lifestyles, where “Ready-to-wear clothing is becoming increasingly popular, primarily because it’s often more cost-effective than getting garments custom-made. Currently, about 30 percent of our fashion sales come from the pret category, while 70 percent comes from unstitched fabric. There is an industry-wide recognition of a significant rise in the demand for ready-to-wear fashion, as this split used to be much lower industry-wide till a few years ago,” noted Moiz Siddiqui, Director of Commercial, Daraz Pakistan.

With the increasing participation of women in the workforce, there is a heightened demand for practical yet stylish clothing. Ready-to-wear options fulfil this need, providing a blend of affordability and fashion-forward designs.

One of the most impactful strategies employed by Daraz Pakistan has been its investment in small-scale manufacturers within the fashion sector. By forging long-term partnerships with these manufacturers, Daraz Pakistan provides them with access to valuable consumer data and insights into current trends, preferred styles, and price sensitivities. This data-driven approach enables manufacturers to produce cost-effective, trendy products tailored to market demands.

“For instance, in the unstitched category, we’ve developed lines of three-piece suits priced as low as PKR 599, which has led to a significant increase in user search views,” Moiz explained.

Manufacturers working with Daraz Pakistan have reported up to a six-fold increase in orders during non-campaign periods within just six months. During mega sales campaigns, such as 11.11, the growth trajectory is even steeper. These collaborations are not limited to product supply but extend to design, quality assurance, and pricing strategies, creating a sustainable model for both parties. The key to this success lies in achieving recurring sales.

Daraz Pakistan has observed that products priced below Rs1,000 are most likely to convert casual browsers into buyers. This price sensitivity is particularly relevant in a market like Pakistan, where inflation has constrained household budgets. For small-scale manufacturers, cracking the right price points while maintaining quality is essential for long-term success.

Most of the platform’s users are concentrated in Sindh and Punjab, with significant activity in manufacturing hubs like Faisalabad, Multan, and Sialkot. The platform’s focus on affordability has positioned it as a viable alternative to larger brands, which often cater to affluent customers. In recent months, inflation has further widened the gap between luxury and budget-conscious consumers.

Copyright Business Recorder, 2025