KARACHI: With changing consumption patterns, 2012 was another good year for leading multi-national FMCGs (Fast Moving Consumer Goods) operating in Pakistan,” said a report prepared by the Topline Research issued on Monday.

The consumer driven growth has changed economic growth pattern as household consumption constitutes 75 per cent of gross domestic product, the report said.

In spite of energy shortages, economic slowdown, security issues and declining investment in Pakistan, consumer- driven growth story continued as 2012 witnessed 19 per cent sales and 16 per cent profitability increase for the listed FMCGs, like Unilever, Unilever Foods, Nestle and Colgate, said the report.

As a result, these listed companies generated a return of 65 per cent (53pc in $) for their shareholders in 2012 compared to 49pc gain (38pc in $) by benchmark index.

Consumer spending not only remained immune from the downfall but also served as an engine for economic growth, thanks to rising share of informal economy in the last few years.

The trend is also evident from the higher import of consumer goods, opening of new malls and restaurant and influx of several global brands into the economy.  The report said that in the last five years, collective sales of these foreign MNCs grew at 22 per cent or Rs164bn ($1.8bn) compared to Rs75.4bn ($1.1bn) in 2008.

Similarly, compared to Rs138.2bn ($1.6bn) in 2011, sales of these companies grew by 19 per cent in 2012.

Further, improvement in gross and operating margins resulted in 23 per cent increase in gross profits to Rs51bn and 21 per cent rise in operating profits to Rs21bn in 2012. In the end, profitability of these companies grew by 16 per cent to Rs13.2bn ($141m) in 2012.

The report said in FY12, real consumption in Pakistan increased by 11 per cent according to government statistics compared to 3.9 per cent in FY11 and was the only positive contributor to economic growth.

“Currently, household consumption constitutes 75 per cent of the GDP in Pakistan which is much more than the 47pc in Malaysia, 70pc in Sri Lanka and 57pc in India and Indonesia,” said the report.

The report considers rising remittances as the main cause of massive growth in consumption.

Increasing remittances has effectively increased purchasing power and living standards of households, especially in rural areas.

Further, higher agricultural production, commodity support prices and income support programmes have also provided the push in the shape of higher demand in rural areas.

“In addition, changing consumption patterns are also lending its due hand in consumer firms' boom. Since the explosion of mass media to corners of the country, consumers are more inclined to branded items highlighted in the advertisements,” said the report.