We spend most of our time studying the brands that worked. That is a mistake, because survivorship bias makes success look more replicable than it is. The businesses that stopped teach you more, and Pakistan has a substantial list of them across every model — marketplace, retail arm, quick commerce, fashion, department store.
I want to be careful and fair here. Several of these organisations still exist in some form, and the people involved were operating in genuinely difficult conditions. The point of this piece is not to score anyone. It is to name the structural patterns, because the same patterns are live in businesses operating right now.
The short version
Almost every failure in this list traces to one of three things: growth funded by capital rather than by margin; a value proposition that was really just a subsidy; or a parent business that treated eCommerce as a department instead of a channel with its own economics.
Pattern one: growth that was never paid for by the business
The marketplace generation — Kaymu among them — grew on the logic that scale would eventually produce economics. Take rate would rise, logistics would get cheaper per parcel, buyers would stop needing discounts to show up. Some of that was reasonable. What it underestimated was how much of the demand was attached to the subsidy rather than the platform.
The test is uncomfortable but simple: if you removed the discount, the free delivery and the promotional credit tomorrow, how much of your volume stays? For a lot of businesses in this list the honest answer was "not enough," and that was knowable well before the money ran out.
Quick commerce ran the same experiment faster and with more capital. Airlift moved quickly, expanded aggressively, and depended on funding continuing to be available in a market where it abruptly was not. When the global funding climate turned in 2022, businesses whose model required the next round did not have the option of slowing down into profitability — they had never built the muscle.
The lesson is not that raising money is bad. It is that capital should accelerate an economic engine that already works, not substitute for one.
Pattern two: eCommerce run as a department, not a business
Several entries here are the online arms of established offline businesses — a courier group's retail play, a department store chain's digital effort, established fashion labels that never got their online operation past a brochure with a cart attached.
The failure mode is consistent and I still see it constantly. The online channel gets staffed with people whose incentives point at the retail P&L. It gets a marketing budget set as a fraction of the offline budget rather than derived from its own acquisition maths. It inherits pricing that cannot absorb delivery and return costs. And when it underperforms against retail's revenue per square foot, it gets cut rather than fixed.
An online channel has different economics from a store. Its cost of acquisition is explicit and rising, its cost to serve includes a delivery and a probability of return, and its margin structure is nothing like a lease-and-footfall model. Running it against retail's benchmarks guarantees it looks like a failure even when it is working.
Pattern three: no defensible reason to exist
The hardest one to say plainly. Several of these businesses offered nothing the customer could not get elsewhere at the same price with the same convenience. They were distribution without differentiation.
In a market where a customer can order from Instagram, WhatsApp, a marketplace, or the brand direct, "we also sell this" is not a position. The brands that endured in Pakistan all have something specific: a formulation people cannot get elsewhere, a price ladder nobody else spans, genuine trust in a category full of counterfeits, or reach into cities competitors do not serve.
The things that killed margin quietly
Underneath the strategic failures sit operational ones, and these are worth listing because they are the ones you can fix this quarter:
- Return-to-origin treated as a cost of doing business. In a COD market, RTO is the single largest profit leak. A business that does not confirm orders before dispatch is paying for two courier legs and earning nothing on a meaningful share of its volume.
- Discounting as the only demand lever. Once customers learn to wait for the sale, your regular price stops working and you have permanently reduced your own pricing power.
- Working capital tied up in courier reconciliation. Several of these businesses were profitable on paper while insolvent on cash, because COD settlement cycles sat between them and their own money.
- Inventory bought on optimism. Buying deep on a product because last month was good, without a sell-through model, is how fashion businesses in particular convert profit into unsellable stock.
- No idea which channel was actually working. Shared promo codes, no attribution discipline, and spend allocated by habit rather than by return.
What separates the survivors
Look at the Pakistani brands that are genuinely working right now and the contrast is sharp. They know their profit per unit after every cost, not their revenue. They have a repeat purchase rate they can state from memory. They run more than one courier. They confirm COD orders before dispatch. They have a reason a customer chooses them that is not price. And they grew at the speed their margin could fund.
None of that is exotic. It is just unglamorous, and unglamorous discipline is harder to raise money against than a growth chart.
The question worth asking monthly
If your funding, your discounting and your ad spend all stopped tomorrow, how many orders would you still get next month — and would you make money on them? If you cannot answer that with real numbers, that is the thing to fix before anything else.
Why this matters for the ecosystem
Every one of these closures took capital, talent and buyer confidence out of the market. Part of why the Pakistan eCommerce Association exists is to reduce the number of businesses that fail for reasons that were structural and avoidable rather than competitive — through better data, better policy, and founders having access to the operating knowledge that currently only circulates privately.
If you are running a business and any of the patterns above sound uncomfortably familiar, that is worth acting on early. Get in touch and we can work through where the leak actually is.
