08 How Packages’ ill-fated South African adventure led to billions in losses
12 The TikTok economy
18 Visa’s She’s Next Programme is driving digital change in Pakistan
23 Fauji and Askari Cement merged two years ago. How has the merger worked out?
26 PSX jumps the gun on Chakwal Spinning’s rebirth as a cloud computing company
29 When it comes to sports advertising, betting companies mean big money. Should Pakistan cricket cash in?
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How Packages’ ill-fated South African adventure led to billions in losses
The company saw its investment in South Africa turn to dust. What were the reasons?
By Zain Naeem
When new ownership came to Flexible Packages Convertors in 2015, the change barely registered beyond the South African packaging industry. The buyer, after all, was a company few in the region had heard of. Packages Limited has always been the towering giant of Pakistan’s corporate landscape and its owner, Syed Babar Ali, the country’s most well-known business personality.
Founded in 1957 the company has become a household name and their product portfolio, mostly packaging solutions, has grown and spread all over Pakistan. It is also the company that became a major reason behind the creation of the Lahore University of Management Sciences, the country’s foremost business school. For decades Packages has been a benchmark. It has been a rare example of a clean, well-run, company that has grown and done so with gusto.
Its acquisition of Flexible Packages Convertors, however, marked something new. This was not just an investment; it was an attempt to push beyond borders and establish itself as a multinational player. But even with decades of
experience behind it, the move to South Africa meant entering uncharted territory—and, for all its prestige back home, Packages still had a lot to prove over in Pretoria.
That said, they were poised to do well. The acquisition was made through a joint venture with Omya Group of Switzerland, so they were not going in alone. On top of this, the company has decades of experience in the packaging business, and that too in Pakistan. Comparatively, South Africa is a more stable market, and FPC was a fairly well run company.
Yet somehow the most un-Pakistani of Pakistani companies (we mean this as a glowing compliment) had a typical Pakistani meltdown in 2023, and after facing billions in losses, is set to sell its short-lived position in South Africa.
How bad are we talking? In 2023, Packages recorded a loss of Rs 1.9 billion which was solely attributable to its South African subsidiary. Flexible Packages made a loss of ZAR (South African Rand) 99 million in the whole of 2022 and an additional loss of ZAR 38 million in the first half of 2023. The reason for the loss, according to Packages itself: poor economic conditions in South Africa, lower sales, higher costs and an unfavorable product mix. Due to its ownership of 63.5% of Flexible Packages, the parent company had to record an impairment loss of Rs 68.7 crores in 2022. The situation was made worse by the ban on
repatriation and outflow of funds from Pakistan which led to Flexible Packages being put under a restructuring process.
Essentially, Flexible Packages was filing for bankruptcy. Now it was up to the creditors of the company to either sell the company as a running business and then use those funds to pay off the loans or to liquidate the company to do so. Once the deal went through, Packages recognized a further impairment loss of Rs 1.2 billion which had to be incurred as the carrying value of the company was lower than the value it was recording its assets at.
So how come a company with a stellar track record and investment savvy nature end up losing such a large investment in a matter of two years. So much so that the company had to declare bankruptcy? Had the economic conditions really worsened to that degree or was there something else?
Packages goes fishing in international waters
Becoming a multinational is a slow and arduous prospect, particularly when you are starting out in a country like Pakistan. If any company has the chops to make it big, however, it is Packages. And the little adventure in South Africa was
not their first dip in international waters. Packages was involved in companies in Syria and Sri Lanka before 2015.
This was not the first time Packages was acquiring an entity outside Pakistan, so you cannot put up what happened to them in South Africa down to inexperience. They started out solidly professional. The company was going to incorporate a Special Purpose Vehicle by the name of Anemone Holdings Limited which was used to acquire 55% shareholding of Flexible Packages Converters (Pty) Limited in 2015. The initial acquisition of $ 8.5 million was funded through a standby letter of credit issued by Habib Bank Limited. The deal between Packages and Habib Bank was secured against a pledge by Nestle Pakistan Limited and the source of debt servicing was going to be from the dividends earned from Flexible Packages. In case there was a shortfall between the servicing and the dividends, Packages Limited was going to cover the gap.
The question here is, was FPC a good buy? Established in 1998 , FPC has been providing flexible packaging solutions to the South African market. It boasted that it was the leading manufacturer and printer of high quality monolayer packing. Flexible Packages was headed by Michael and Wayne Hoffman, and Packages paid a cash consideration of around ZAR 122.5 million or Rs 1.04 billion in order to carry out the deal. Packages was given 83,863,636 shares of Flexible Packaging in exchange for their investment which brought their shareholding to 55%.
This was a nice, clean, company that had made a space for itself in South Africa over 17 years in the exact department Packages had expertise in. FPC was chosen by Packages precisely because of this. For years the company had displayed solid financials, posting consistent and growing revenues and profits. Strategically, this was a prudent move as Packages wanted to expand into South Africa and African markets going forward. Rather than setting up their own plant, they chose to acquire an existing one and expected that once they had a foothold in the continent, they could expand their reach into the rest of Africa as well.
The right call?
In the beginning, it seemed Packages had made a prudent decision. Seven months after acquiring the company, Flexible Packages made revenue worth ZAR 272 million from which it was able to make a profit of ZAR 14 million in 2015. Similar results were seen in 2016 where sales revenue of ZAR 493 million was earned bringing in an after tax profit of ZAR 21 million. The first signs that something was going wrong came in 2017, and even then it was nothing alarming. FPC saw
stagnating sales which fell to ZAR 493 million while profit after tax fell to ZAR 15 million.
Still, the loss was chalked up to a recent drive by the new ownership to undertake the training of the company’s existing employees. It was typical of Packages to do this. After all, this is the same company which set up LUMS to train and eventually provide MBAs for people to be efficient managers at Packages.
The year 2018 did see a slight improvement with sales increasing to ZAR 535 million and profit after tax going back to ZAR 21 million. This increase was short lived as revenues hovered at Rs 542 million and profit after tax fell to ZAR 9 million in 2019. The reason for the fall was contributed towards operating expenses which had increased. 2020 saw revenues see a slight increase by going to ZAR 576 million while the company ended up making a loss of ZAR 31 million due to pandemic ravaging the world.
Even though 2020 was bad, the recovery seen in 2021 was nothing short of miraculous as sales increased to nearly ZAR 700 million and the company was able to decrease its losses from ZAR 31 million to ZAR 28 million. The higher sales and loss being made was attributed to the fact that Covid lockdowns were still having an impact on the cost structure of the company.
Not all is well
But things were not as good as they seemed.
There seems to be a bigger and systematic problem which seems to have been either ignored or not dealt with in the right manner. Sources purview to the whole problem dictate a story of incompetence or over reliance on the systems being used by Flexible Packages. Sources allege that the Chief Financial Officer (CFO) had been hired from
a telecommunication company and had little experience in production or manufacturing related business. Due to her lack of experience, she relied heavily on the systems being used for inventory management by the company. With little attention to physical stock taking, she monitored the company through the SYSPRO system which was used by the company. Her dictum was that if there is an open order, there should be inventory to cover it and felt there was no need to actually carry out stock taking to validate what was being reflected in the accounts.
This should have already been a cause of concern as the management system being used had already been flagged as being glitchy and had to be corrected in order to fix it. The CFO still depended on the software totally with little regards to the fact that it had been seen as being problematic earlier.
In addition to that, the production manager who was responsible for entering the data into the software also made a mistake where he would enter hours into the system thinking he was entering minutes. So a figure like 120 would be inputted rather than 2 in case of hours. This had an impact on the costing of sales and inventory which was being carried out. As more and more such entries were made, the inventory valuation kept getting inflated meaning the inventory being reflected in the books was much higher than the actual inventory at the plant.
A way to verify the erroneous figures would have been done by the CFO at regular intervals when physical stock taking was carried out. As no such process was in place, this verification fell through the cracks.
As the company’s performance deteriorated, the CEO; Michael Hoffman, was fired and was replaced by someone from Packages Pakistan to steady the ship. This measure did not work out as the problem was chron-
ically plaguing the system and needed to be addressed.
When the first signs of this issue were recognized by the CFO, she communicated this to Packages and told them that an investigation was being carried out to get to the root of the problem. An audit of the inventory management system was carried out to see if the software had developed a glitch again. The vendors of the software reiterated that no errors or glitches were seen.
Once the problem was finally realized in 2022, the best option was to correct for the inflated assets that had been recorded in the books which led to the losses that were seen by the company in 2022 and 2023 as impairment losses. The seeds of these losses had been sown long before and losses which might have been smaller in piece meal ended up accumulating over time and snowballed into losses of billions of rupees.
In short, this was an issue raised due to lack of financial control at the company which was compounded by smaller inefficiencies along the way. A stock taking exercise done earlier would have highlighted this fact and this issue could have been resolved much earlier. As it was not caught, it led to the company making repeated losses.
This lack of accounting control led to bigger problems. First of all, the banks threatened that they would take away their credit facility as they felt that the company would not be able to pay back its loans. As a guarantee, the bank asked the parent company to put up additional investment into Flexible Packaging to make sure it stays afloat.
No problems there. Packages actually wanted to invest more in order to keep Flexible afloat. The only issue? Pakistan had restricted outflow of remittances from the country. This meant that Packages could not put up the investment that was required. This only deepened the crisis as a requirement of $5 million in August of 2022 became $10 million by February of 2023. The business rescue did come in March of 2023 when things had gotten much worse. As the situation deteriorated, it was finally decided to sell the company to a third party in September of 2023. A company that could have been saved did not receive the funding and the company was placed with a BRP who ended up selling the company to a third party.
The numbers take a downturn
How did all of this play out in the numbers? Even though on the surface the company was earning revenues, underneath the surface the situation was looking dire. In the 2021 accounts of Packages Limited, the company
cited the fact that economic conditions were deteriorating and that the costs being incurred by the company were rising. Due to this, the investment that had been made was going to be written down.
In accounting terms, it is the goal of the accounts to show a fair and true value of the assets that it has accounted for. This means that if a person has given a loan of Rs. 100 to 10 people, then he can expect that these people will pay him back and he can record an asset of Rs. 1,000 in his books. A few years down the line, one of the debtors passes away. In order to make sure that the reality is being reflected, that Rs. 100 needs to be written off and assets need to be brought down to Rs. 900 in accordance with the facts.
Similarly, the investment that had been carried out by Packages showed that they had invested an amount in Flexible Packages. Now seeing that their expectations will not be met, the company needs to revise the situation and record an impairment loss. This loss is seen as the difference between the carrying value or expected value that will be generated by the business and the value at which the asset is recorded in the books.
This impairment loss was recorded by Packages for the first time and a loss of Rs 68.7 crores was recorded. This was the first sign that things were not as rosy as they seemed. This was confirmed in 2022 when Flexible Packages saw sales revenue of ZAR 545 million which was lower than the amount earned the previous year. Due to this, the company saw a loss of ZAR 78 million compared to ZAR 28 million a year before.
The problem was compounded when the nine month period ending September 2023 showed that Flexible Packages had made a further loss owing to its systemic problems and the capping of outflow of remittances by the government. As investment proceeds could
not be sent to South Africa, the company was pushed into further financial distress. The situation called for a restructuring process to be initiated to see the future prospects of the company and whether it was viable. Under South Africa corporate law, a Business Rescue Practitioner (BRP) was appointed who determined that the company was unable to pay its creditors.
A meeting was held with the creditors who had to vote to either let the company be liquidated or be sold as a going concern to a third party by taking it away from Packages Limited. The creditors voted for the company to be kept operational but sold to a third party to meet the debt obligations. The bankruptcy and sale of the company meant that Packages ended up making a loss of Rs 1.2 billion in total.
Even as the investment went sour, the question does persist. What was the reason that the investment went so bad so quickly?
According to official disclosures made by the company, it was seen that the loss was due to economic conditions and the challenges that were being faced. Due to adverse conditions, the company had no choice but to book losses and seek an exit from the company. When Packages was contacted for comments on the reports received, they sent the letter that had been disclosed to Pakistan Stock Exchange intimating the recording of the losses and sale of the subsidiary that was going to take place. With no other option left for Packages, all they could do was sell the company, write off their investment and record losses in the form of impairment losses of historic proportions. While it is an unfortunate situation for Packages, it is a rare example of the company misstepping. It does not mean they do not have the gas to make it as a multinational company. Especially if they can learn from this experience. n
By Nisma Riaz
You may know of Facebook, Instagram, Snapchat, Google, and YouTube as internet services you use for information and entertainment, but they make their money from the millions of small businesses around the world who use these platforms to sell their products and services.
In 2016, the world was hit with yet another social media app but this one did not come out of Silicon Valley. It was made in China and they were calling it TikTok.
When TikTok was first launched, the perception towards the app was that it would be strongly popular among Gen Z, with its short videos of dancing challenges. Truth be told, TikTok is madly popular among Gen Z and Gen Alpha, so the general conception of it being yet another app with brain rot content was not entirely flawed. According to statistics published by Social Shepherd, about 48% of TikTok users are below 29 years of age, 23% are Gen Z and 25% are Gen Alpha. But that is not all there is.
Initially TikTok simply featured lip syncing music and dancing videos, however eventually with its rising popularity and usage, it now features all types of content catering to diverse communities.
What is more interesting, however, is the evolution of these social media platforms. They do not simply exist for entertainment anymore. These platforms now carry revolutionary traits that not only influence behaviours and trends, but have also become a means to a living. It is no secret that creators directly earn revenues from posting content on social media apps like Instagram and Youtube. While others like Facebook have evolved into an e-commerce platform, hosting groups that function as online stores for sellers, service providers and buyers. All sizes of stores and businesses also use these platforms to run ads, often morphing a traditional advertising message into a reel that is much more interesting to watch than an old school TV commercial.
What stood out to us, prompting us to write this article, was one particular community on TikTok– the small businesses community. Let us scroll through TikTok’s journey to becoming a significant platform for brands to engage potential customers directly and the app tweaking its offering to double down on this market.
A new app on the block
In 2016 Chinese tech giant ByteDance launched TikTok. It operates as Douyin in China, functioning as a separate entity. The app’s roots can be traced back
to Musical.ly, a Chinese platform launched in 2014 that gained global popularity with its 15-second music and lip-sync videos, quite similar to Dubsmash, which was also launched in 2014 and later acquired by Reddit in 2020.
In 2017, ByteDance acquired Musical. ly and merged it with TikTok. This strategic move propelled TikTok’s growth, resulting in over 1 billion active monthly users today, unlike Dubsmash’s acquisition, which led to its complete closure in 2022.
The platform quickly rose to fame, becoming a revolutionary social media tool, specialising in sharing short form videos across diverse topics. Primarily designed to be mobile-based, the platform did not restrict itself to just that, offering web accessibility as well. The app’s meteoric rise can be attributed to its unique features, including customisable background music, filters, an extensive library of licensed soundtracks, and voice-over effects, features Instagram had not been offering back in 2017. Despite what old grumpy politicians had to say about the threateningly popular Chinese app, a Nielsen study commissioned by TikTok revealed that users perceive the platform as authentic, engaging, and trend-setting.
Today TikTok’s global footprint spans more than 200 countries, with offices in major cities worldwide, including Beijing, Los Angeles, New York, Moscow, Seoul, and Tokyo. Despite facing significant political challenges due to data security concerns in countries like the USA and EU, and even a complete ban in India, TikTok’s growth remains unabated. In 2023, Hubspot predicted TikTok’s growth to be massive, with an estimated 53% of marketers planning to increase their investment in the platform.
Eight years later, TikTok now stands among some of the world’s most popular and widely used applications, hosting a large demographic of users, cutting through social classes and not limiting its platform to the initial Gen Z target market.
Within Pakistan, TikTok is still the newcomer. While digital advertising attracted Rs26.5 billion ($105 million) in spending in fiscal year 2023, according to Dawn’s Aurora magazine, TikTok accounted for just about 10% of that, or Rs2.65 billion ($10.5 million). TikTok is new enough that 2023 - the latest year for which advertising spending data is available - is the first year for which spending data on TikTok is even broken out.
That $10.5 million, however, represents just the direct advertising budgets spent on TikTok. It does not account for the total economic activity generated on that platform, which is likely considerably higher.
From lip-sync underdog to marketing powerhouse
TikTok, which was once the quirky kid on the social media block has had quite the glow up. Faster than you can say “viral dance challenge,” the app morphed into a marketing colossus that has the Big Four marketing agencies sitting up and taking notes.
But what is the reason behind TikTok’s meteoric rise?
Of course, its algorithm.
One of the most salient qualities of TikTok is its power of virality. Even the most unknown creator can become an overnight sensation, thanks to TikTok’s algorithm which is not just smart, but almost like a digital Sherlock Holmes. Every swipe, every lingering glance, every “not interested,” is filed away in TikTok’s grand plan to hijack your attention.
The result?
A personalised rabbit hole of content so perfectly tailored, it is like TikTok hired a team of psychics to predict your every whim. It is not just giving you what you want; it is showing you what you did not even know you needed.
How does TikTok actually do it? The key insight is that machine learning algorithms improve the more data you provide them. YouTube is also a video platform, but it has longer form videos, which means that, over a given 30-minute period of the user being on YouTube, they may only watch four or five videos or even less. That means YouTube only knows what you think of four or five videos.
On TikTok, however, that same 30-minute period might involve the user viewing over 25 videos, which means five times more data, or even more. That makes the algorithm get smarter about each individual user, and makes it even better at predicting what each incremental user will like, a cascading effect of strengthening the algorithm made possible by getting users to offer more data on their own preferences.
And as it turns out, this was the perfect setup for TikTok to be utilised as a marketing and branding tool.
But TikTok did not do this on its own. It was TikTokers who unlocked the true potential of the app, using it in ways the company had never imagined.
Creators were quick to pick up on TikTok’s ability to make things go viral, especially for precisely targeted audiences. They did not require finding an audience anymore, rather simply focusing on creating content and the audience interested in said content would find it themselves, through TikTok’s
scary accurate algorithm.
But what made TikTok stand out from other social media platforms?
To answer simply, it was the nature of its content, where marketing material did not translate to users as forceful advertising, unlike Youtube ads that are largely described as insufferable.
Faiza Zafar, Partnership Manager, Global Business Solutions for South Asia at TikTok started by debunking a belief we had expressed in the beginning of this article, “The marketing industry has been experiencing a renaissance for the past few years. It is shifting away from outdated beliefs that consumers are time deprived and have short attention spans. In reality, consumers spend hours daily on digital entertainment, where they learn, unwind and explore. We see consumers binge watching entire series and binge reading books or gaming for hours, which makes it clear that attention spans aren’t shrinking, but consumers have more choices for how to spend their down time.”
According to Zafar, by embracing this, the industry is returning to entertainment focused marketing, where creativity is used for the relevant engagement and entertainment of consumers.
“After years of ads that focus on interrupting consumers, leading them to spend their money on ad blockers and premium subscriptions, we are finally going back to entertaining them with our marketing messages. This signifies a refreshing return to entertainment in the industry and creators and creativity play a huge role in bringing this to life,” she added.
TikTok was always a platform that was meant to influence, with many who jumped on it early and quickly rising to fame as influencers, such as Charli D’Amelio. However, it was intentionally created as a platform to influence consumer behaviours, but became one by accident.
Zafar agrees with this assertion, highlighting how, “Platforms like TikTok have played a crucial role in ushering in this new era by combining content and commerce, and through this, revolutionising how brands interact with their communities and reshape the path to purchase. It has become the platform of choice for marketers to creatively bring back entertainment as part of the value proposition of their brand. By switching from interrupting to entertaining consumers, ads are effectively moving from being a nuisance, to becoming a content type to which consumers actually enjoy attributing time.”
“Thanks to the combination of native and creative content in marketing campaigns on TikTok, the community perceives ads very positively. According to Kantar research, 74% of our users rate ads on the platform as creative, and 67% consider advertising on TikTok unique.”
TikTok has become a space where com-
merce meets creativity, helping brands thrive. “We call this unique blend Shoppertainment - commerce powered by quality content that is designed to entertain and educate firstly, and, secondly, to inspire purchases,” said Zafar.
In today’s competitive consumer landscape, it is important for brands to not only satisfy their customers’ basic needs, but also aim at a higher, emotional level. This is where the concept of “shoppertainment” comes into play. Zafar explained that shoppertainment puts content at the forefront of its advertising strategy, which helps entertain and inform users while immersing them in a narrative around the brand and its products.
We spoke to Bilal Munir, a Youtuber who goes by the name of Videowalisarkar and has also made it big on TikTok. Munir told us the success story behind his e-commerce platform and how TikTok played a huge role in it.
In 2008, Munir embarked on a journey to review cutting-edge gadgets. However, he faced a major hurdle: the products he wanted to showcase were not available in Pakistan. Frustrated by this limitation, he took matters into his own hands.
“What began as a simple solution to source review products soon blossomed into something much bigger. I created Saman.pk, an e-commerce platform that brought innovative tech to Pakistan. From bone conduction earphones to quirky kitchen gadgets, I curated a collection of unique items that were previously out of reach for local consumers.”
Initially, the platform served as a personal inventory for his YouTube channel. But as his following grew, so did the demand for these fascinating gadgets. Without intending to, Munir had become an e-commerce pioneer, bridging the gap between his content creation and his audience’s desire for cutting-edge technology.
But this did not happen without TikTok.
“I was among the early adopters of TikTok and I created an account with high hopes. However, I soon discovered that the landscape was dominated by dance moves and pure entertainment. My informative tech content felt out of place, struggling to compete with the viral dance challenges and comedy sketches. Discouraged, I decided to pivot. “What if I take snippets from my YouTube videos and repurpose them for TikTok?” I thought. It seemed like a low-effort solution to maintain a presence on the platform. But alas, this strategy fell flat, and my TikTok account lay dormant for years,” Munir recalled.
“Then around two years ago, I noticed a shift. The quality of content on TikTok’s “For You” page had drastically improved. Intrigued, I decided to give it another shot. This time, I approached it differently. No more repurposed content – TikTok deserved its own unique, tailored videos and the results were explosive.”
After just two posts, Munir realised the
error of his ways. TikTok required a completely different approach to content creation. Gone were the long introductions and detailed explanations of his YouTube videos. “TikTok demanded immediacy – jumping straight into the heart of the matter.”
“I discovered a whole new world of content possibilities. Trick videos became my specialty – how to get a PTA-approved phone, connecting multiple earbuds, or downloading the latest software. These bite-sized, practical tips resonated with TikTok’s audience, many of whom were just beginning to explore the digital world.”
The lesson Munir learnt from this was that adapting to the platform is key. What works on YouTube or Facebook might fall flat on TikTok. By embracing TikTok’s unique style and audience, he found his niche and watched his content flourish in ways he had never imagined.
Cracking the content code
TikTok managed to amass 1 billion active monthly users in just three years, a milestone that took Instagram and Facebook nearly twice as long to achieve. This unprecedented growth prompted TikTok to commission Nielsen for a comprehensive study to uncover the driving forces behind its success.
The findings revealed a combination of factors propelling TikTok’s popularity. At its core, the platform’s appeal lies in its unique, authentic, and joyful content, delivered in an unfiltered manner that resonates strongly with users. This approach helped revolutionise how people interact with social media and marketing content online.
Creators on TikTok have managed to transform the traditionally fraught relationship between users and advertising. The study uncovered that 54% of users perceive brands promoted on TikTok as authentic, while 53% express trust in the quality of these brands. This level of trust is unprecedented in the social media landscape and speaks volumes about TikTok’s ability to create a space where commercial content seamlessly integrates with user experiences.
The platform has achieved what many thought impossible; making advertisements palatable, even enjoyable. A striking 71% of users report being unbothered by ads, provided they’re entertained in the process. This shift in perception has led to the creation of new avenues for marketers and challenged long-held assumptions about digital advertising.
And all of this happened because of the nature of its content.
TikTokers’ marketing approach stands out for its highly personalised, non-intrusive
nature. The platform offers a diverse array of innovative ad formats that seamlessly blend with user-generated content. Oftentimes it’s humour and entertainment that creates an environment where promotional content feels organic rather than pushy.
The fusion of engaging visuals and catchy sounds further enhances this effect, making ads feel like part of the overall entertainment experience. Moreover, TikTok’s algorithm democratises content distribution, giving all creators an equal opportunity to go viral based solely on the quality and engagement of their content. This levelled playing field keeps users engaged, white also providing brands with unprecedented opportunities to reach wide audiences through creative, authentic messaging.
Resonating with assertion, Munir shared, “Since I began creating TikTok-specific content, my audience has grown dramatically. In just two months, we saw a staggering 108% increase in viewership, essentially doubling our reach. But it’s not just about the numbers. The impact is tangible in real life too. I’m being recognised more frequently in public, which speaks to TikTok’s incredible penetration and reach. Even though my follower count is around 700 to 800 thousand, the platform’s superior discoverability means my content is reaching far beyond my immediate audience. This experience really highlights TikTok’s power as a platform for rapid growth and widespread visibility, given that you post the right content.”
Research shows that products that are actively advertised on TikTok become popular, and the advertising itself, in an organic format for the platform, is positively perceived by the audience. According to a global survey by Marketcast, 80% of users found content on TikTok incredibly interesting. More than 90% of respondents said that the platform helps them discover something new, including new products and brands. More than 70% of TikTok users who were inspired by the platform to make a purchase, for example, said that they relied on TikTok creators more than on influencers on any other platform when choosing.
Advertising on the platform is so organically perceived by the audience that the #TikTokMadeMeBuyIt hashtag has already become a social phenomenon and inspired more than 10 million posts on TikTok as of now. Users from all over the world use the tag to share their purchases and recommendations, unbox products and talk about what they can’t wait to buy. Unlike product reviews on a brand’s website, which are often suspected to be paid reviews, TikTok users sharing their experiences with a certain brand or product are considered to be more authentic.
Commenting on this phenomenon, Zafar said, “Due to such engagement and organic interest, brands often see absolutely incredible sales
results. For example, among global advertising campaigns, there was a case when Maybelline’s Sky High mascara went viral among users so much that for a month the mascara was constantly going out-of-stock due to high demand.”
Adding to this, Munir shared that, “TikTok excels in promoting lesser-known products that users didn’t know they wanted. Unlike platforms where established brands dominate, TikTok’s powerful discovery algorithm connects niche items with potential buyers. This makes it extremely valuable for content creators and businesses introducing unique products, offering unmatched visibility and engagement opportunities.”
How to make
money off TikTok?
Unlike Youtube and Instagram, content creators in Pakistan cannot monetise their content on TikTok, or directly earn revenues by simply posting on the platform.
Content creators on YouTube can generate income primarily through advertising. When viewers watch ads displayed on videos, it produces revenue. This ad revenue is split between YouTube and the creator, allowing creators to monetise their content directly.
To access advertising income from their videos and live streams, creators must qualify for the YouTube Partner Program (YPP). YouTube considers monetisation a privilege and reserves it for trusted creators who meet specific criteria, aligning with the platform’s commitment to responsible practices.
Munir explains how TikTok works quite differently than Youtube.
“Unlike YouTube and Facebook, TikTok doesn’t directly pay us for views here. For me, being a tech influencer, I found two main ways to earn. First, there’s the classic sponsored content route. Brands see my viewership numbers and come knocking, asking me to make videos for them. That’s where the big bucks are, honestly.”
He added, “But here’s where it gets interesting. Since I also have my own online store and keep in mind that TikTok Shops aren’t a thing in Pakistan yet, so there’s no direct linking. You’d think that’d be a problem, right? But let me tell you about this power bank I once promoted. I made this simple video on my phone, I didn’t even show my face, just showcasing this power bank from a brand called Beanie. I thought we’d sell maybe a couple hundred units. Boy, was I wrong! That video hit 7.3 million views, and we ended up selling thousands of these power banks!”
So, even without all the fancy features, TikTok’s reach is incredible. People will go out of their way to find and buy products they see on the platform. It’s all about creating that
buzz and making your content irresistible.
Another feature is TikTok’s localised approach for product marketing in Pakistan. When a video goes viral, it primarily reaches local audiences, ensuring higher conversion rates for businesses. This contrasts with platforms like Instagram, where global views might not translate to sales in specific regions. Munir highlighted that brands prefer TikTok for targeted marketing, as they can collaborate with Pakistani content creators to reach their desired demographic efficiently. “This localisation strategy makes TikTok an invaluable tool for businesses aiming to connect with Pakistani consumers, offering more relevant and potentially profitable engagement than other social media platforms.”
And lastly, TikTok is not exclusionary. It cuts across language and class barriers, so making the right content for your desired audience is much easier on TikTok then on any other app.
“Unlike other social media, it doesn’t prioritise language skills or written content. The focus is purely on visual storytelling. If you can create engaging video content and handle a camera, you have the potential to go viral, regardless of your English proficiency. This low entry barrier is a key factor driving TikTok’s popularity. It’s democratising content creation, allowing people from diverse backgrounds to find success and reach large audiences, even without traditional communication skills,” Munir concluded.
We asked Zafar which specific types of businesses and business owners have seen the most success on TikTok.
She answered, “Brands of all sizes and across various industries have found success resonating with the TikTok community not because they had the glossiest ad or the biggest names in their campaign, but because of their ability to creatively engage and connect with users through feelings, actions and sounds. Huge international corporations, local companies, small and medium-sized businesses (SMBs); companies from a variety of industries: e-commerce, FMCG, retail, fashion & beauty, video game developers and many others - make their ideas come to life on TikTok.”
She added that the magic of TikTok is not just the chance to create, but the chance to discover and to be found. “With TikTok For Business, our goal is to give marketers the tools to discover and connect with the broader communities around them. According to Kantar, TikTok ranks number 1 globally for ad equity, becoming the preferred ad environment for both brands and consumers.
“Another one of the key reasons for this is the unique community on TikTok, having an audience that is more inclined to act than any other platform. International research shows that almost 90% of users take action within a
week of watching an ad on TikTok and more than 70% are likely to recommend products and brands they bought,” Zafar highlighted.
According to an Oxford Economics Report, SMBs leveraging TikTok generated $24.2 billion for the U.S. economy in 2023.
Doubling down on TikTok marketers
When TikTok saw its own potential, it did what any other app trying to stay on top would do: it doubled down on this opportunity and started investing in expanding the market for TikTok as a branding tool.
We asked Zafar to talk about how TikTok focuses on marketers as a key market and gear its offerings to accommodate these individuals.
“SMBs play a crucial role in driving economic growth and generating employment. According to public sources, they represent approximately 90% of businesses worldwide, highlighting their significance in the global economy,” she relayed.
She explained that on TikTok, businesses are integrated into the platform’s creative ecosystem, benefiting from a variety of opportunities to showcase their brand through engaging content. “The platform offers innovative advertising solutions that enable SMBs to optimise their investments and maximise results. Our mission as a global digital platform is to empower SMBs to navigate competition, resource limitations, and budget constraints, levelling the playing field in an increasingly competitive online landscape.”
Additionally, TikTok offers a cost-effective marketing alternative, enabling SMBs to spread their message without a hefty budget. With just a smartphone and creativity, businesses can deliver key product messages and engage their target audience effectively.
TikTok also conducts workshops and classes to train creators, teaching them effective ways to utilise the tool to their advantage.
One such example is the Grow with TikTok Masterclass.
“The #GrowWithTikTok Masterclass aimed to equip Pakistani small and medium businesses (SMBs) with the knowledge and tools to thrive on TikTok. The program focused on teaching effective communication strategies, product promotion techniques, and showcasing success stories from other businesses,” Zafar told Profit.
“Participants learned practical skills such as using TikTok’s content creation tools, audience engagement tactics, and campaign optimization. The masterclass emphasised authentic storytelling over traditional product promotion and highlighted TikTok’s community guidelines and safety features,” she added.
According to Zafar, the key message was
that SMBs can leverage TikTok to build genuine connections and boost customer engagement without significant financial investment.
Some of the SMBs that are already successfully leveraging TikTok to grow their business in Pakistan include Scents N Stories, the first online perfume store selling duplicates of designer fragrances in the country. The brand harnessed the power of TikTok to drive incremental sales on their website. As they aimed to assess their TikTok campaigns’ impact and measured incremental conversions, the brand utilised In-Feed ads with diverse creatives and a conversion objective, conducting a conversion lift study. As a result, they saw a 66% relative lift on page view, 77% lift on placing online orders. This revealed a significant conversion boost, affirming TikTok’s efficacy as a winning brand strategy.
Another good example is Aljannat Sweets. A local sweets shop that wanted to attract a new audience and convert them into prospective customers. Focusing on creative elements, they launched a TikTok campaign which tempted users to make an order by completing a form. The campaign was a resounding success resulting in 8.1M reach in Pakistan and a 4.12% conversion rate.
Is TikTok the new Google?
We have been told to “Google it” before but has anyone ever told you to TikTok it? As weird as it may sound, TikTok, X and Instagram have started serving as search engines.
According to Google’s senior VP Prabhakar Raghawan, younger users are increasingly turning to social media platforms like Instagram and TikTok for search functions, rather than traditional tools such as Google Search or Maps. TechCrunch reports that around 40% of Gen Z uses these platforms to find local dining recommendations.
This shift presents a significant opportunity for businesses to connect with younger audiences through TikTok’s search advertising, as this demographic can be challenging to reach via conventional advertising channels. The rapid rise of TikTok also has implications for YouTube. While YouTube currently maintains a larger market share, TikTok’s growth rate suggests it could become a serious competitor in the future.
Insider Intelligence predicts that by 2025, the United States will have approximately 24.2 million TikTok users compared to 26.6 million YouTube users. YouTube’s user base appears to be reaching saturation, while TikTok continues to experience remarkable growth.
A key factor in TikTok’s potential impact on internet search is pricing. If TikTok can offer competitive pricing and better return
on investment compared to Google, it could potentially attract increased advertising spend.
However, despite its popularity, privacy concerns continue to be wide spanning, with many people on the Internet accusing TikTok of utilising their data for unethical purposes, similar to how Meta (Facebook) had come under fire for violating user data privacy.
So, will TikTok steal your data like Facebook and even Google does?
We asked Zafar how TikTok addresses concerns about data privacy and security, especially as it becomes more integral to business operations.
She explained, “Sustaining a safe environment both for users and for brands is the number one priority of TikTok. We believe that brand safety is something that every marketer has to make a priority when choosing an online platform to advertise on. This is why we are committed to staying ahead of industry expectations to provide a safe and inclusive experience.”
Brand safety on TikTok involves strategic ad placement in appropriate environments. Zafar explained that TikTok maintains community guidelines applicable to all users and content. Their content moderation approach removes violating content, implements age restrictions, and ensures recommendation system appropriateness.
TikTok empowers brands with control over their ad environments through tools like the Inventory Filter, allowing marketers to set content filtering levels. The platform partners with external organisations to comply with industry standards and improve brand safety measures.
Effectiveness can be evaluated using data from TikTok and partner Zefr, providing independent assessment based on Global Alliance for Responsible Media (GARM) standards. Double Verify and Integral Ad Science assist in ensuring ads reach the right audience in the right context. For data security, TikTok offers a Data Security Verification feature, providing an additional layer of protection for sensitive account information.
In conclusion, the use cases of this entertainment app, later coupled with the platform’s own efforts to incorporate creator friendly features have led it to become one of the most efficient tools for targeting the right audience at the right time.
The application has been instrumental in helping SMBs in several regions across the world adopt creative marketing strategies, reach wider audiences, and achieve business goals at every stage of the marketing funnel. The main strength of TikTok lies in its expansive and varied user base, providing SMBs with unparalleled access to a global audience of millions. Through TikTok, SMBs can transcend traditional regional limitations, allowing them to interact with consumers both in their local area and across international markets. n
How five women are rewiring Pakistan’s business landscape
By Nisma Riaz
In a country where women's participation in the workforce remains low, a new initiative by Visa is aiming to unleash the untapped potential of female entrepreneurs. Visa, the global leader in digital payments, has set its sights on Pakistan with the launch of She's Next - an advocacy program designed to empower and uplift women-owned small businesses through funding, training, and mentorship.
The inaugural edition of She's Next in Pakistan, launched earlier this year in partnership with HBL, Pakistan's leading bank, has already made waves by awarding grants worth $ 50,000 to five women-led businesses. But the program's ambitions extend far beyond mere financial support. With the recent initiation of the She's Next Club, Visa is fostering a community of like-minded women entrepreneurs, providing hands-on training, and facilitating valuable networking opportunities.
The timing couldn't be more crucial. According to Visa's 2023 Women SMB Digitization Index survey, women entrepreneurs in Pakistan are eager to learn from their peers and require specific assistance in key areas. Estimates suggest that 61% need help overcoming business problems, 54% want support developing online sales and 43% seek guidance on building a team of employees.
Perhaps most telling is that a staggering 98% of women surveyed expressed interest in payment-related training. This highlights both the challenges and opportunities in Pakistan's rapidly evolving digital economy.
As we delve into the stories of the She's Next grant recipients, two key themes emerge: how women-led startups are revolutionis-
ing education in Pakistan, and how they are embracing and driving digital change across various sectors, such as e-commerce, tourism and marketing. Their journeys offer a window into the transformative potential of women's entrepreneurship in the country.
Revolutionising Education: coding the future
Sadaf Rehman Co-founder of CodeSchool
In the rapidly growing landscape of Pakistan's EdTech sector, two startups stand out for their innovative approaches to preparing the next generation for a digital future.
The first one is CodeSchool, which aims to make coding fun and accessible.
For SadafRehman, co-founder of CodeSchool, the journey began with a shocking realisation, "I overheard my son's programming class, and it was so bad that it was shocking," she recalls. "It was like a more boring version of maths, if that was even possible."
This experience sparked a mission to revolutionise coding education in Pakistan. CodeSchool aims to equip students aged 6-16 with critical 21st-century skills like computational thinking and problem-solving through the power of coding.
"We are giving coding classes to kids from ages 6 to 16," Rehman explains. “Our unique proposition is that we use instructors from Pakistan. We are screening and certifying them on how to teach, after which we provide them with the curriculum."
The She's Next grant has been instrumental in expanding CodeSchool's reach and impact. "It allowed us to expand our teacher training program," says Rehman.
This expansion includes two low-cost pilot programs - one in Karachi with children of domestic staff, and another with a low-cost school outside Lahore. These pilots aim to prove that CodeSchool's curriculum can be effective across different socioeconomic contexts.
"A child's brain is a child's brain, whether they're sitting in the Netherlands or whether they're sitting in Punjab," Rehman asserts. "And so we didn't find any issue with the kids. Our curriculum is exactly the same and the learning outcomes are exactly the same."
The grant has also allowed CodeSchool to experiment with training non-tech individuals to deliver programming education - a crucial step in scaling their impact. "The linchpin is the teacher," Rehman emphasises. "And how scalable is that?"
Looking ahead, CodeSchool sees potential for their model to be offered to schools as a new revenue stream. With the support of She's Next, they are poised to make coding literacy as fundamental as reading and writing for Pakistan's youth.
Hira Javaid
Co-founder, Foster Learning
The second initiative that targets the education sector is Foster Learning, a startup that strives to fill a gaping hole in the market; the skills gap.
While CodeSchool focuses on early coding education, Foster Learning takes aim at a different challenge; improving employability through digitised education and skills-based training.
Foster Learning, co-founded by HiraJavaid, emerged from a recognition of educational disparities across Pakistan. "If you go to southern Punjab, you will see that there is actually a huge disparity.That was a trigger point to start this all," Javaid recounts. The company's journey began in Laiya, a small city in southern Punjab, with a flagship program teaching leadership and entrepreneurship.
Foster Learning's approach combines entrepreneurship training with technical skills development. They developed a bilingual curriculum and partnered with industry leaders to offer guaranteed internships. This model has gained recognition from major institutions, including the Pakistan Engineering Council and Oxford University.
This initial batch grew from 20 to 43 graduates, all of whom now run their own businesses. "If we go back and look at it, we had around 20 students. That batch grew over time and by the time they all graduated, all 43 had started their own businesses.
From that one batch, today if we go back down the road, that class became out of 20 or 33 class by the time they all graduated, and right now all 43 of them have their own businesses," Javaid proudly states.
Before COVID-19, Foster Learning expanded to over 60 universities across 30 cities. The pandemic prompted a shift to online learning, reaching more remote areas like Kashmir and Balochistan.
Their impact extends beyond just their students. Foster Learning has been appointed as the computer science technical lead for the National Curriculum of Pakistan. "Now anyone registered in Pakistan to teach needs to follow
the computer science guidelines that we have set," Javaid notes. "This means Pakistan is now one of the few countries in the world that has a programming mandate, and programming is free from grade six onwards."
The She's Next Grant has enabled Foster Learning to enhance their technology infrastructure, invest in marketing, and expand their training programs. Looking ahead, they aim to reach 110 cities across Pakistan where universities are present, continuing to digitise education and improve employability on a national scale.
plore new AI-driven features. "We've been able to hire new developers who are now working on our AI-based features that are like AI content generation and AI-based reporting."
Driving digital change: from social media to e-commerce
Beyond education, women-led startups are making waves across various digital sectors in Pakistan. Three She's Next grant recipients exemplify this trend, each tackling unique challenges in the digital landscape.
Ayesha Awan Co-founder, SocialBu
SocialBu is a digital platform that has set on a journey to empower social media management.
In today's digital-first world, effective social media management can make or break a business. This is where SocialBu, co-founded by Ayesha Awan, comes in.
"SocialBu is an AI-powered social media management and automation tool," Awan explains. "We offer it to social media managers, small business owners, influencers, and freelancers so that they can manage all their social media accounts from one place."
The She's Next grant has been a game-changer for SocialBu, enabling them to accelerate their product development and ex-
For a bootstrapped startup like SocialBu, the grant provided crucial financial breathing room. "Since we are completely bootstrapped, we haven't raised any money so far," Awan notes. "So it has helped us with dealing with financial challenges while growing the team."
The impact of SocialBu extends beyond just convenience. By making social media management more accessible and efficient, they're empowering small businesses and entrepreneurs, particularly women, to compete in the digital marketplace.
"We have been helping them manage their entire social media presence, even with one person," Awan explains. "So they have been able to cut costs on their social teams and they've also been able to stay ahead with what's going on in the market and compete with bigger competitors with bigger social teams."
Looking ahead, SocialBu is focusing on developing more AI-centric features and even launching a new AI-based product. With the support of She's Next, they're poised to continue driving digital transformation for businesses across Pakistan and beyond.
Ziana Sakhia Co-founder, Bechlo.pk
Next in line is Bechlo.pk, an digital platform democratising e-commerce for women
Co-founded by ZianaSakhia, Bechlo. pk is an online social marketplace created specifically for women to buy and sell both new and pre-loved products.
"We connect buyers and sellers," Sakhia explains. "So sellers will come and list their products on their platform, buyers will come and buy it. When sellers list their products, they don't have to do any marketing, they don't have to do any customer service, any conversations with the customers, we will take care of all of that for them."
The idea for Bechlo.pk was born out of necessity during the COVID-19 pandemic when Sakhia and her co-founder found themselves stranded in Karachi, unable to find essential items for their babies. They discovered a wealth of products available through Facebook groups but encountered numerous challenges in actually completing transactions.
"The entire process of conducting the transactions was really choppy," Sakhia recalls. "And it was such a shame because there was so much really good product out there."
With a background in e-commerce, Sakhia saw an opportunity to bridge the gap between Pakistani women sellers and buyers, creating a safe, efficient platform reminiscent of global giants like Poshmark and Etsy.
Bechlo.pk emerged as a solution to the chaotic world of Facebook buying and selling groups, where women sought privacy and security in female-only spaces. Sakhia recognized that these women, often housewives running side businesses, lacked the technical expertise or scale to set up their own websites.
"It's for women, by women," Sakhia explains, highlighting how this approach fostered trust among users. The platform caters primarily to female sellers and buyers, though it welcomes men too, offering everything from clothing to corporate gifts.
Three years into their operation, Bechlo.pk had validated their market with a thousand customers. But to scale further, they
needed a significant financial boost. Enter the She's Next program, whose grant came at a crucial juncture.
"We were at a point where now we need to see if this is going to be able to scale further or not," Ziana recalls. "And we needed a hefty amount of money to be able to do that."
The She's Next grant provided the necessary funds to enhance their website, improve user experience, and take Bechlo.pk to the next level. It was a turning point for the platform, enabling them to dream bigger and reach further in their mission to digitise and empower women sellers across Pakistan.
The She's Next grant has enabled Bechlo.pk to enhance their technology infrastructure and improve user experience. "We had to redo the website," Sakhia shares. "We felt that there was some feedback that we were getting where buyers and sellers wanted a better user experience."
But perhaps more importantly, the grant has allowed Bechlo.pk to invest in seller training and support. "We did a lot of training and upskilling programs that we developed," Sakhia explains. "We hired extra team members who basically have helped these sellers take their product and make it more presentable."
The impact of Bechlo.pk goes beyond just facilitating transactions. By providing women with a platform to sell products from home, they're enabling financial independence and empowerment. "These are the kind of things they're going to tell us, that now I can go ahead and choose to make my own expenses," Sakhia notes. "I can choose to buy formula for my child because I don't have to rely on my mother-in-law or my husband giving the money for doing it."
With the support of She's Next, Bechlo. pk is well on its way to achieving its mission of digitising 100,000 female sellers by 2025, potentially impacting over half a million lives in the process.
Rida Zainab
Co-founder Porter Pakistan
Another company among these digital changemakers is Porter Pakistan, co-founded by RidaZainab. Porter Pakistan is tackling the travel and leisure sector with an innovative online platform for planning and booking experiences.
"We're an OTA (Online Travel Agency) with an added feature of tech-enabled experience planning," Zainab explains. "We have over 600 service providers from all over Pakistan on our platform."
The She's Next grant has been instrumental in enhancing Porter Pakistan's technological capabilities. "We've used the grant money to improve our technical capabilities and we've also spent the money on designing and making the trip designer feature," Zainab shares. The funding has also enabled them to launch their app on both iOS and Android platforms.
Moreover, the grant has allowed Porter Pakistan to invest in content creation and marketing, crucial elements in the highly visual world of travel planning. "With the Visa money, we basically were able to invest more in marketing and content creation," Zainab notes. "So better graphics, working with bigger influencers, spending more on ads and being able to kind of cater to a much bigger market than we were able to do so before."
Porter Pakistan's platform is particularly impactful for women, who often make travel
decisions for their families or companies. "35% of the clientele, of the decision makers, I would say, on behalf of their family, or on behalf of a corporate, are mostly females," Zainab observes. By providing a transparent, detail-rich platform, Porter Pakistan is making travel planning more accessible and trustworthy for this key demographic.
Beyond the Grant
While the financial support provided by She's Next has been crucial, the program's impact extends far beyond the monetary grant. All five grant recipients emphasised the value of the mentorship, training, and networking opportunities provided by the She's Next Club.
"The mentorship program was really valuable because it always helps to get a fresh set of eyes on your business," Rehman of CodeSchool notes. "We had very curated mentorship sessions where there were five winners and there was an expert.”
Javaid of Foster Learning echoes this sentiment: "I think mentorship sessions were really great. They definitely gave me some fresh perspectives from a finance point of view, and an outreach point of view, shifting focus to the trends in marketing right now."
For Awan, the program provided much-needed structure and community in the often isolating world of entrepreneurship. "The loneliness of entrepreneurship was shocking even for someone as introverted as me," she admits. "And so I think the structure of the She's Next program was amazing because it pulls you out and it takes you into a communal shared space and gives you an excuse to interact with other like-minded people."
Sakhia highlights how the program has boosted their credibility and opened doors to new partnerships. "Having the Visa association really helped build us as a reliable, trustworthy brand," she notes. "Because e-commerce is one of those industries where everyone's always doubting you and establishing trust is crucial."
For Zainab, the program has provided invaluable guidance on effectively utilising the grant funds. "Most of the programs, most of the grant programs, I would say, do not focus on the mentorship part and do not have that training available where they guide us on how to properly use the funds in order to maximise the output," she observes.
Challenges and Opportunities
As these women-led startups continue to grow and evolve, they face both challenges and opportunities unique to Pakistan's business landscape.
One common challenge is the difficulty in raising capital. "To raise money as a woman entrepreneur, the biggest shock, which took us a year, like it's been the last one year has just been this one shock," Rehman shares. "All we were interested in is the quality of education of the kids, right? But to raise capital is almost like a different language."
Sakhia highlighted how Bechlo. pk's journey reveals the unique challenges faced by women entrepreneurs in Pakistan, particularly in smaller towns and cities. Many women lack access to physical retail spaces and transportation, limiting their ability to discover and purchase desired products. The platform addresses this by bringing a wide range of items, including pre-loved and Western wear, to their fingertips through social media and e-commerce.
Pakistan's large, young population and the country's ongoing digital transformation.
The She's Next program, by providing not just funding but also mentorship and a supportive community, is playing a crucial role in helping these women-led startups navigate these challenges and seize the opportunities ahead.
“A significant hurdle is the misconception that tier-two and tier-three cities only house low-income populations. In reality, these areas, including industrial hubs like Faisalabad and Sialkot, have a substantial market with purchasing power. Bechlo.pk taps into this potential by connecting resellers from these cities with a broader customer base,” she explains.
Another area where Sakhia believes to be creating an impact is financial independence for women; a challenge many women in Pakistan face, due to the large unbanked female population in the country. “Perhaps the most crucial challenge is the lack of financial independence for women. Many sellers initially operate discreetly, using family members' accounts for transactions. Bechlo.pk encourages women to open their own accounts, fostering financial autonomy and formal business practices. This shift often leads to increased respect and support from family members,” Sakhia shares.
So, the platform also tackles the issue of unbanked women by promoting digital wallets, which have become increasingly accessible. This financial inclusion is a game-changer, empowering women to manage their earnings and make independent purchasing decisions, gradually altering their social and economic status within their families and communities.
Despite these age-old challenges, the entrepreneurs remain optimistic about the future. They see tremendous potential in
A new chapter for women's entrepreneurship in Pakistan
The stories of these five women entrepreneurs, and the impact of the She's Next program, paint a picture of a new chapter unfolding in Pakistan's business landscape. Despite the challenges, these women are driving innovation, creating jobs, and paving the way for a more inclusive digital economy.
From revolutionising education to transforming e-commerce and travel planning, these startups are not just building successful businesses, but also reshaping entire industries and empowering other women in the process.
The She's Next program, with its combination of funding, mentorship, and community-building, is proving to be a powerful catalyst for this change. By focusing on women entrepreneurs, Visa is tapping into a vast reservoir of untapped potential that could drive Pakistan's economic growth for years to come.
Indeed, as these women continue to innovate, adapt, and overcome challenges, they're not just building their own businesses - they're laying the groundwork for a more inclusive, diverse, and dynamic business ecosystem in Pakistan. And with programs like She's Next supporting them, the future looks brighter than ever for women entrepreneurs in the country. n
Fauji and Askari Cement
merged two years ago. How has the merger worked out?
The two military-owned cement companies have combined to create the third-largest cement company in Pakistan. Creating shareholder value, however, is a harder task
By Zain Naeem
Mergers and acquisitions are an easy way to create economic value for shareholders in theory, but notoriously hard to do in practice. The merger of the two military-owned cement companies in Pakistan – Fauji Cement and Askari Cement – should have been a relatively easier one to manage, and in many ways, it has been successful in achieving its aims of generating shareholder value.
The simplest way to measure the success or failure of a merger – at least in the case of publicly listed companies – is whether the market value of the company in question increased. On that score, the merger of Fauji Cement and Askari Cement is unquestionably a success. On the eve of the merger, Fauji Cement’s market capitalization – the total value of the company – was Rs17.7 billion, and it paid Rs27.3 billion to acquire Askari Cement in an all-stock deal, implying a combined value of Rs45 billion at the close of the transaction. The
market capitalization of Fauji Cement as of the close of trading on Friday, October 18, 2024 was Rs70 billion, implying that the company is currently valued at considerably higher than the entity at merger.
If one were inclined to be uncharitable, one might argue that stock prices alone are not a great way to determine whether a merger was accretive (created value) or dilutive (destroyed value), since stock prices can be volatile and dependent on the vicissitudes of the market that go beyond just the intrinsic value of the company itself.
A better set of metrics might be to explore the operational performance of the company to see if it is doing better than its combined predecessors, since that would judge the company on whether it achieved the core drivers of value in the first place: increasing revenue, reducing costs, improving overall profitability. Even on that set of metrics, it is hard to argue that the Fauji Cement merger with Askari Cement was anything other than a success.
But before we dive into those metrics, let us first examine the history of both of these
companies, why the merger happened in the first place, and then examine the extent to which it succeeded in creating shareholder value.
A tale of two military-owned cement companies
Askari Cement is the older of the two companies, having first been established in 1980 under the name Associated Cement. In 1993, the company was renamed Wah Cement Company, and in 1997, it became Askari Cement Company. It was the smaller of the two entities, with two production plans located in Wah, a suburb of Rawalpindi, and in Nizampur, a small town in Nowshera, Khyber-Pakhtunkhwa. Both factories have a combined production capacity of 2.68 million tons per year.
Fauji Cement was the newer of the two companies, having been established in 1992 as the Potohar Cement Company though its name was quickly changed to Fauji Cement
Company in 1993. The company’s sole production facility is in Fateh Jang in Attock, Punjab, and has a production capacity of 3.5 million tons per year.
Both of these were fairly ordinary cement companies that rode the wave of the Musharraf-era boom in cement manufacturing that saw the country nearly triple its production capacity from 15.5 million tons per year in 2001 to 45.3 million tons per year by 2010. In the nearly decade and a half since then, production capacity has nearly doubled again, to 83.1 million tons per year, according to data from the All Pakistan Cement Manufacturers Association (APCMA).
So why the merger? Well, it was always a strange thing that they were separate companies to begin with. Both were majority owned by the Fauji Foundation, the charitable foundation originally established in 1954 with seed capital left behind by the British government to serve the needs of British Indian Army veterans of World War II.
In 2020, Waqar Ahmed Malik, the for-
mer CEO of ICI Pakistan (back when it was a subsidiary of the British industrial multinational conglomerate) became the first civilian to become the CEO of the Fauji Foundation and he set out about implementing a plan to simplify and modernise governance in the military’s industrial interests.
The two military-owned cement companies were not the only ones to be merged. The two fertilizer manufacturers owned by Fauji Foundation also completed their merger just last month. The two food companies have also consolidated into a single structure. In all, the military now owns the same assets through a smaller set of corporate entities, likely significantly simplifying corporate governance.
In the case of the two cement companies, however, it was not just a case of combining management structures. Immediately following the merger, the combined Fauji Cement Company embarked on a significant expansion of its production capacity by opening up a facility in Dera Ghazi Khan that
can produce up to 2 million tons per year, and came online in February 2024. Aggregate cement production capacity for the company has now hit 9.3 million tons per year.
Once the merger was finally finalized at the end of 2021, it was expected that Fauji Cement would become the third largest cement manufacturer in terms of capacity after Lucky and Bestway. The company also commanded a hefty market share of around 13% and there was an opportunity to expand into markets both local and international. In relation to the industry, it seems that Fauji has moved the needle in terms of its past performance, however, there is still much to be desired in relation to its competitors.
Synergies realised… sort of
The merger was designed to capitalise on cost efficiencies, but the devil, as always, is in the details. Financial metrics indicate that Fauji Cement
has indeed improved gross margins from 25% in 2021 to 32% by 2024, a positive sign of reduced costs. Operating margins have similarly climbed from 20% to 25% during the same period, suggesting the company is doing a better job at managing operational expenses. But there’s a catch: net profit margins fell from 14% in 2021 to 10% in 2024, well below the 12% benchmark set in 2019.
What’s dragging profitability down? Interest rates and taxation. Pakistan’s high interest rates have made servicing the combined company’s debt expensive, eating into profits. Higher taxes have also taken a toll, exacerbated by rising revenues that push Fauji into higher tax brackets. While the merger did achieve some cost savings, these external factors have limited the company’s ability to fully reap the benefits.
Compared to competitors like Lucky Cement, which has seen net margins rise from 22% to 24%, and Cherat Cement, whose margins doubled from 12% to 24%, Fauji’s margins have not quite kept pace. It perhaps does not help that its expansion plans were financed almost entirely through debt. As of June 2021, the company held very little long-term debt, less than Rs0.5 billion. But it added about Rs19 billion in 2022 in order to finance the expansion.
That expansion, however, has yet to result in significant increases in revenue. While production capacity has increased, Fauji Cement has yet to begin utilizing that capacity, and hence it finds itself in the position of paying interest on debts taken on to fund a project that is not yet yielding cash flows, at least not meaningfully.
That may be judging the company a bit harshly, though. The latest financials available are from June 30, 2024, and the Dera Ghazi Khan plant only came online in February, barely enough time to make a dent in total production. It does not help that this produc-
tion came online at a time of record inflation and interest rates, meaning that the level of construction activity taking place in the economy is considerably constrained.
Indeed, Fauji produced less cement in 2024 than its predecessor entities combined produced in the financial year ending June 30, 2022. The recession, in short, has hit the company hard just as it had taken on a massive debt-financed expansion plan. At one point or another, every Pakistani cement manufacturer has been hit with overcapacity issues, and they usually come at the inopportune time when interest rates are high. Fauji had managed to escape that cycle during the 2008 financial crisis. It appears it is now the company’s turn to live through this.
Rivals have been more adept at turning operational efficiency into bottom-line success, leaving Fauji playing catch-up.
Exports: slow growth
One of the key goals of the merger was to boost exports, particularly to neighbouring Afghanistan and Central Asian markets. Before the merger, Fauji Cement exported Rs72 crore worth of cement in 2017. By 2024, this figure had risen to Rs 6 billion—an average growth of 24% annually. While this growth is commendable, it pales in comparison to the explosive export gains seen by competitors. Cherat, for example, saw exports grow by an average of 64%, while Attock Cement’s exports ballooned from Rs 3 billion in 2017 to Rs 11.4 billion in 2024, a 54% increase per year.
Even in relative terms, Fauji’s export growth has been sluggish. Exports as a percentage of total sales have crept up from 2.6% in 2017 to just 6% in 2024. By comparison, Cherat now derives 10% of its sales from exports, while Attock has managed to lift exports to a striking 31% of its total sales. The
gap is even starker in the first quarter of 2024, where Fauji saw a 12% decline in exports, while competitors like DG Khan and Lucky Cement posted export increases of 98% and 84%, respectively.
The tepid export performance underscores the fact that, while Fauji Cement has grown its international presence, it has not kept pace with competitors who are increasingly relying on foreign markets to offset falling local demand. Cement manufacturers across Pakistan are shifting their focus to exports to counteract domestic market challenges, and Fauji’s relatively slow growth in this area could limit its potential in the long run.
Conclusion
Has Fauji Cement’s takeover of Askari delivered on its promise?
The short answer: partly. The company has made undeniable strides in improving its gross and operating margins, suggesting that some of the hoped-for synergies have materialised. But external pressures, particularly rising interest rates and taxes, have blunted the impact of these efficiencies on net profits.
On the export front, the company has seen growth but lags significantly behind more aggressive competitors. This underperformance in international markets raises concerns about whether Fauji Cement can fully exploit the potential of its larger scale.
In a highly competitive market where rivals are nimbly adapting to both local and international challenges, Fauji Cement has shown it can walk—but has yet to prove it can run. As the industry continues to evolve, the company will need to quicken its pace if it hopes to unlock the full potential of its merger. Otherwise, what was once seen as a bold move to consolidate and grow could instead turn into a cautionary tale of unrealised promise. n
PSX JUMPS THE GUN ON CHAKWAL SPINNING’S REBIRTH AS A CLOUD COMPUTING COMPANY
The exchange is supposed to be the first line of defence for the investors. In this instance, however, it ended up facilitating the hype around the revival of a bankrupt textile spinning company as a cloud computing company
By Zain Naeem
In a perfectly functioning capital market, it is the role of the exchange to be the first regulatory body which looks out for the little guy. Investor confidence is built on the fact that when they take an investment deci -
sion, it will be protected and looked after by the regulator who calls the balls and strikes as it sees them. In the context of Pakistan, it seems that the exchange has a lax view. The latest case of this is Chakwal Spinning Mills. Usually it is seen that the market is left to function unhindered in order to allow the demand and supply to lead to price discovery.
An unfettered market is supposed to allow for the market to function smoothly with little uncertainty and interruption. In the case of Chakwal, the exchange was not able to force the company to follow the applicable regulations and then even contributed to the mess in the end. This is the story of how the exchange forgot to apply its own regulations
properly while jumping the gun and then having egg on its face. While the exchange looks to save some grace, the cost of this fiasco is still weighing on the exchange as the investors are seeing their investment crumbling in front of their eyes.
To comprehend what has happened here, there is a need to step back one year into time. In November of 2023, Chakwal was a company which had not been operating for almost 6 years. Way back in 2017, the company had stopped manufacturing and had leased out its premises to Yousuf Weaving Mills Ltd. The company was sustaining losses and was accumulating them on its accounts. Due to its rising liabilities, the banks were knocking the doors of the courts in order to recover their outstanding dues. The situation had gotten so bad that the auditors felt that the company could not sustain itself and it was no longer a going concern.
Faced with these challenges, the company was touting a plan of a reverse merger where it was going to merge with another
company in order to survive into the future. It was trying to come up with business plans and contingencies which were being argued and litigated in the courts. With accumulated losses of Rs89 crores and a negative equity of Rs13 crores, the liabilities were increasing day by day. At this point in time, the share price of the company was hovering at Rs1.27 per share which showed that the market was not valuing the company much higher based on its conditions. The exchange had placed the company in the defaulter segment. This might sound jarring to an investor but the exchange places certain companies in the segment to make the investor aware that the company has breached certain regulations of the exchange. Chakwal had been placed on this list as it had not restarted production for more than one year.
For the time being, the best course of action for the company was to carry out cosmetic changes like revaluing its plant and property to turn its equity positive. In terms of operations, it announced that a memoran -
dum of understanding had been signed with an Information Technology related company and things were looking up as a debt restructuring plan was in the works. In January of 2023, the board announced that a merger had taken place between Chakwal and one of the largest technology companies of Pakistan which had presence in USA, UAE, Philippines and China.
While these developments were taking place, the stock price of the company saw slight changes. During November, the price was around Rs1.5 per share which increased to Rs12 by December end.
With progress taking place on this front there were talks of changing the name of the company in order to suit its new business as well. In February, the board changed the memorandum of association of the company by February 2024 and by July this was carried out. The stock price kept increasing while this was taking place in the background and hit a high of Rs50 by July of 2024.
This is where things start to go a little awry.
After the formalities of the name change had been carried out, the board approved the new name of the company as Quantum Cloud & AI Technologies Limited. In order to suit the name of the new company, they applied for the ticker symbol to be changed at the stock exchange as well. On the 12th of July, the board approves the name change and on the 25th of July, the stock exchange informs the market that the symbol will change from the 29th of July 2025. Sounds innocuous enough. The problem with this? The board has to get this move approved in an extraordinary general meeting that is to be held on the 2nd of August. Why and how did the Pakistan Stock Exchange (PSX) change the name even before the approval from shareholders was taken is a mystery. The exchange seems to be too antsy and desperate to approve the symbol change for starters.
The new symbol opened at Rs55 and increased to Rs 156 in less than a month. This was an increase of almost a 100 times from where the stock price was in November of 2023. It has to be noted that till now, only a merger was announced and nothing credible had been stated or presented by the company which could justify this price. Even when the exchange asked the company to provide rationale for the price increase, they stated that they had no material information in this regard.
On 2nd August, the shareholders resolved to change the name of the company after the symbol had already been changed. It seemed like PSX had gotten away with it. On the 9th of August, the company restated to the exchange inquiring about the reason behind the price increase and the company again reiterated that it had released all material information and there was nothing that
needed to be disclosed.
But was it being honest?
News broke on the 5th of August 2024 that Huawei had joined hands with Quantum Cloud & AI and formed a strategic alliance going forward. The next disclosure that was made by Chakwal was that it had signed a term sheet worth Rs7.784 billion with PNO Capital to launch a data center and cloud operations in Pakistan. The investment would mean an injection of Rs 0.5 billion in Chakwal Spinning Mills after the sponsors of the company put up Rs 0.4 billion of their own equity injection. The remaining Rs 7.284 billion is a convertible bond of 3 years with an annual coupon of 10%. The company will be able to use these funds to pay off some of its liabilities owed to banks and be able to restart operations with a lower cost structure. There was no mention of any strategic alliance with Huawei till now.
Around this time, news had started circulating in the market that the company was involved in alleged insider trading with investors and the company was being investigated by the Securities and Exchange Commission of Pakistan (SECP). The company came out to defend itself stating that it was not involved in any such activity. A letter was also sent by PSX which needed clarification from the company. The Huawei deal should have been disclosed by the company as soon as it was formalized which it had not done. The company stated that it had not released any news to the media and their vendor had done so. According to the PSX regulations, the company should have disclosed it to the exchange which it did not. The company further stated that it had not gotten the documents from the SECP which it had applied for on 7th of August 2024. It was going to disclose the information to the market once these certificates had been
issued by the SECP.
But it seemed that the saga was not over. While the market kept trading the company under the symbol named CLOUD, the SECP wrote back to the company that it had refused the application of the company to be able to change its name. The paperwork that had been sent to the SECP had been rejected and it was communicated to the exchange that the request had been refused. So now PSX had to walk back its decision to change the symbol being traded. A move that should have happened after all the necessary approvals had been received, it seems like the exchange was a little too trigger happy to carry out the change. The exchange had to take back its decision and carry out the necessary disclosures to communicate this reversal taking place. The question is then raised, why was the name changed in the first place without prior approvals? What was the hurry?
The cost of these decisions falls on the investors who were investing in the company from the get go. The share price of the company had started from Rs 1.5 in November and hit a high of Rs 156 when things were looking up in August. Currently, the share price is hovering at Rs 50 and the outlook is negative on the company going forward. The whole episode has shown that the PSX needs to implement its own rules and regulations in a much better manner in order to oblige the companies to make the proper disclosures and announcements to make sure the people are aware. In addition to that, the exchange also needs to follow rules and regulations itself rather than facilitate certain companies which can harm the image and trust of the investors in the exchange as a regulator and the market as an avenue of investment. The way the PSX had stumbled over its own tale goes to show that even a small scar on the trust of the consumer has a lasting impact. n
When it comes to sports advertising, betting companies mean big money. Should Pakistan cricket cash in?
Last year, Pakistan banned betting websites from advertising, even through surrogates. Now, a reversal may be on the cards. The question is, are we missing out?
By Abdullah Niazi
Emblazoned across the jerseys of the Indian Cricket Team is “Dream 11” in bright purple. The richest and most powerful cricket team in the world, India has its pick of sponsors. They have been sponsored in the past by Indian Conglomerate Sahara, Nike, Unicorn startup Byjus, and many others.
When Dream 11 made their bid to join this elite list, they paid a massive INR 358 crores ($42.5 million) to have their name placed front and centre on the Indian jersey for a three year period. Why? Because Dream 11 is the closest thing you can get to legal online betting in India, and in a cricket crazed country of one-anda-half billion people, that means big money.
What do we mean by Dream 11 being the ‘closest’ thing to legal online betting? Much like in Pakistan, betting is prohibited by law in India. But Dream 11 bills itself not as a betting company but as a “fantasy sports” platform. The concept of fantasy sports is pretty simple. You sign up on a website, you spend money to “buy” certain players for a fantasy team of your choosing, and then you gain points depending on how well those players perform. You can buy or sell those players to others with fantasy teams and prices go up and down depending on how many points each player has managed to get.
This might sound a lot like gambling considering you make and lose money depending on how well a particular player performs on a particular day. The only difference is that legally, fantasy sports are considered a game of skill since it involves participants analysing and deliberating on which players might perform well or not. Because of this key difference, it does not fall within the legal definition of gambling.
It is one of many techniques that gambling platforms have used in the past two
decades to advertise on the field in the world of cricket. Going the route of a fantasy sports website is one method but it is not the only one. Take Pakistan as an example. Until last year, the HBL PSL and international cricket in Pakistan had been infiltrated by betting websites that were advertising through surrogate websites. It was a trend that caught wind fast, but came to an abrupt end after a number of star players including former Captains Babar Azam and Muhammad Rizwan took a moral stand over the issue, eventually leading to the end of betting websites advertising in cricket in Pakistan.
However, murmurs are beginning that there is a move to bring back surrogate advertising. The details on this are not clear, and the PCB is not saying a word. However, it is worth noticing that the ban on this advertising was made by the government last time and the PCB did not want it. This time around, however, the Chairman of the PCB is also the Federal Minister for Interior and has some sway where it matters.
While the details may not be here yet, it is worth looking back and understanding surrogate advertising and the tensions it caused in Pakistan cricket only last year. How does this work, what happened to bring it to an end, was the decision too hasty, and could we see a comeback?
Surrogate advertising
V$42.5 million —
Price paid by Dream 11 for main sponsorship of Indian Cricket Team
$11 billion —
The total revenue from online sports betting in the USA
$4.25 billion —
The total revenue from online sports betting in Australia
$22.5 million —
Value of the HBL PSL’s Title Sponsorship
ery briefly put, surrogate advertising is a loophole. For example in India there has long been a law in some states that bans the advertising of alcohol. So what alcohol companies do to get around this is launch a product with very similar brand recognition to their booze. Bacardi famously launched Bacardi records so that any time they air an ad for their record label, people would think about their alcohol which they are not allowed to advertise on TV.
It is the same with cricket and betting. For example, one of the PCB’s main sponsors was Dafa News. Now, a website called Dafa News definitely existed and was a news website. But it was owned and operated by DafaBet, which is a well known betting company. While the law does not allow DafaBet to sponsor in Pakistan, there is nothing stopping a news website like Dafa News from sponsoring. Hence, a loophole. Any time a person looking at Dafa News ads googles it, they will be led to the DafaBet website even though a shell website called DafaNews does exist. In 2022, other than Islamabad United and Peshawar Zalmi, all of the teams in the HBL PSL
had a surrogate sponsor. For example, Multan Sultans was sponsored by Wolf777 which was a surrogate for Wolf777Bet and 1XBAT was a surrogate for 1XBET.
And these websites were paying the franchises big money to put their name on their shirts. Everybody was happy, that is, until the players resisted. Take the case of the Multan Sultans.
As reported by Profit in November last year, when Wolf777 News sponsored the Multan Sultan for a reportedly whopping Rs 10 crores for two years, the team’s captain Muhammad Rizwan asked the management whether it was true that this was for a betting website.
“The management told him this wasn’t the case and Rizwan played with the logo for the first few matches. But he is a religious fellow and the doubt had crept into his mind so he asked a religious scholar for a fatwa. When the scholar told him it wasn’t allowed, Rizwan refused to wear the logo leading to a serious dispute with the team management. In the end, however, he got his way and taped over the logo when he came out to play the next day,” one former captain of the cricket team told Profit
On top of this, Rizwan was not the only player rejecting these sponsors. According to one source, Babar Azam was offered a massive contract of over Rs 25 crore to be sponsored by 1XBat, but advised by Saya Corps, he also declined the lucrative offer. For the players this was a matter of both principle and their image. But for the PSL franchises and the PCB it was a bone of contention because they were losing out on big sponsorship contracts. It was also at this point that Saya Corps reportedly began lobbying with the government to have these websites banned, which they succeeded in. On the 31st of October last week, the caretaker government also announced a crackdown on these websites.
What the ban means
The drama that followed meant eventually these websites were banned. By January 2024, only a few months after Profit broke the story, the Ministry of Inter-Provincial Coordination (IPC) directed the Pakistan Cricket Board (PCB) to ensure there would be no surrogate advertising during the forthcoming edition of the HBL-Pakistan Super League. It is an order that has been followed through on. In fact, the anger regarding this has not quickly subsided. Just recently, a petition was filed in the Peshawar High Court alleging players need to be stopped from wearing sponsorship of these surrogate websites even when they play cricket leagues outside Pakistan. It is enough of an issue for player image that earlier this year, Pakistan’s test captain Shan Masood asked his English County team Yorkshire, of which he is captain, to not place the DafaBet logo on the collar of his shirt. The reality is Pakistani players can refuse to do this on their own accord even on moral grounds, but it will not take these websites out of the game. In fact, they will remain very much a part of international cricket and will bring money into the game as well. Internationally, gambling is a big earner for sports. In 2023 alone, the sports betting industry made $11 billion in revenue in just the USA, a market cricket has been desperately trying to break into.
Cricket’s relationship with sports betting has been strained. Because of the analog nature of the sport, many people fear the infiltration of such websites could lead to increased incidents of spot fixing, an issue that is particularly sensitive for the Pakistan Cricket Team since the 2010 scandal in England. There really are only two ways to go about this. The first is to say it is not a risk worth taking and forgo the revenue that sports betting can bring to a sport. The other is to regularise it, which will also help with keeping checks and balances. Countries like India have
also found workarounds. This is not to say these are good ideas, but with an increasing focus on monetising the game of cricket Pakistan needs to keep up otherwise it will fall behind further in what is already a losing race with countries like India, England, and Australia. In countries like Australia, where gambling is legal, the annual sports gambling revenue for 2024 is projected at $4.54 billion.
Why the franchises will be unhappy
There is a very good and logical reason for not wanting surrogate advertising in cricket. One must also, however, consider the fact that franchises of the HBL PSL are losing out on some big money here, and they are already stuck in a financial model that they consider unfair.
The revenue sharing model that dictates the tournament is deeply flawed. The way it works is that the six franchises participating in the tournament agreed to a 10-year contract to lease rights to the franchise for different amounts. They pay this fee in yearly instalments. The highest single payment by a team is around Rs 1.07 billion by the Multan Sultans, although the second highest payment is significantly less at Rs 44.2 crores.
In exchange for this, the PCB organises the tournament, provides grounds, accommodation, supplies, and bears other costs such as broadcasting. Meanwhile the teams are responsible for paying their own players and staff. The tournament itself makes money through broadcasting, gate receipts, sponsorships, and more. Now the revenue from these sources is all put into a central pool which is then divided between the teams and the board. Each team gets around 15% of this central revenue pool and the board gets 5%, but they also get the entirety of the franchise fees.
With negotiation, things have gotten better over time. In 2023, the HBL PSL had a central revenue pool of Rs 5.67 billion, which is the highest in its history. However, this amount of money is still not enough to cover the costs for most of the franchises, and the bigger ones are still facing losses. Within the HBL PSL, one big avenue for these franchises is advertising revenue they can earn, and sports betting websites were giving them big money. As mentioned, Multan Sultans alone had signed a deal worth Rs 10 crore with Wolf777, and 1XBAT had made an even larger agreement with Karachi Kings and were offering extra money for representation from Babar Azam.
Next year, the stage will be set for the HBL PSL franchises to go up for rebidding. In this process, as the PCB negotiates with the existing owners, it will be interesting to see whether or not this becomes a sticking point for the franchises. n
