10 profitable small business ideas in Pakistan for 2021

If you want to start a small business as a Pakistan business owner in 2021, get ready to discover 10 profitable business ideas. From launching a manufacturing company and exporting goods overseas from Pakistan, to taking advantage of consumer trends and new emerging markets. Let’s take a look at some of the best opportunities for Pakistan entrepreneurs to start a business this year.

An overview of the Pakistan economy

Before we explore 10 low investment business ideas, we first need to understand the current economic climate of Pakistan. While 2020 has certainly been an unpredictable year due to Covid-19 and international travel restrictions, 2021 provides a new opportunity to explore new and emerging industries and shifts in consumer trends and behavior.

Pakistan is home to highly skilled professionals and has an incredible supply and variety of raw materials and goods. Despite a rise in inflation rate, the country remains one of the cheapest places to live in the world, according to CEO World Magazine¹. This means Pakistan can offer high-quality goods and services for a low price, and on a global scale, helping new businesses to out-perform their international competitors online. However, corruption still holds the country back, and this is something you’ll need to take into consideration before opening a small business.

Is 2021 a good time to start a business?

One major takeaway from 2020 is the progress international business has made in terms of digitizing their processes to overcome the global pandemic. Customers are now more accustomed to placing orders online, tracking deliveries and communicating with businesses around the world. Due to national lockdowns, it is also far easier to reach consumers who are stuck at home and bored. Worldwide e-commerce sales are still heading towards the $5 trillion mark with online retail sales expected to rise by 14.3 percent in 2021².

Another thing to consider is competition. Major international companies suffered significant financial loss during 2020, and businesses that opened in early 2020 have now shut down due to the pandemic. This has created a unique opportunity for small to medium-sized entities to break into the global market from the get go.

In 2021, start-ups and new businesses are at an advantage, since they can react faster to a changing marketplace and are not tied down by financial commitments such as offices, warehouses, factories and hundreds of employees. Plus, with many industry leaders struggling to stay afloat, the competition is now wide open for ambitious entrepreneurs³.

10 profitable small business ideas to explore

After you’ve weighed up the risks of starting a business in 2021, let’s now explore 10 profitable business ideas for Pakistan entrepreneurs.

#1: Import-export business

Business analysis: Pakistan is one of the major players in terms of importing and exporting goods and services worldwide. Since many manufacturers have suffered during 2020, now could be the best opportunity to launch a new, Pakistan import-export business. While the country’s exports are expected to be impacted still by Covid-19, according to the International Trade Center’s latest export potential assessment for Pakistan, the country’s exports are set to rise to $12 billion in the next 3 years⁴.

Now consider the fact that more people than ever before are working from home, ordering products online is becoming the norm and this will help you to attract overseas buyers and start trading internationally. With high-quality products and the low cost of labour in Pakistan, focus on trading with European countries who value quality will be key to your success.

Industry: Manufacturing

Products/ services: Importing and exporting goods in and out of Pakistan can cover a wide range of products and services.

Target market: European B2B & B2C

Considerations: The pandemic is still causing major disruption worldwide in terms of travel restrictions, and this may cause delays when importing and exporting goods.

#2: Textile manufacturer

Business analysis: Pakistan’s textile industry is booming, despite pandemic impacts. Recent data has revealed that textile shipments have risen by 3.8 percent to $4.8 billion. This significant rise is promising news for Pakistan business owners looking for a profitable small business idea. Export recovery has been most prominent in knitwear, home textiles and denim. The more people who work from home, the more demand there will be for cosy loungewear, soft furnishings and denim over formal office wear⁵.

Industry: Textile & Clothing

Products/ services: Soft furnishings, denim, knitwear

Target market: International B2B & B2C

Considerations: Will people return to the office as Covid-19 vaccinations are rolled out, or will people continue to work from home?

#3: Plant-based meal provider

Business analysis: Veganism and plant-based diets are growing significantly, and on a global scale. According to Unilever CEO Alan Jope, the planet-based trend is unstoppable. Vegan-friendly goods such as almond milk, hemp milk, soya milk, plant-based meat alternatives and vegan candy are all interesting business ideas for Pakistan business owners. Unilever recently set out a $1.2 billion sales target for the plant-based sector for the next 5 to 7 years. Companies such as Beyond Meat and THIS, are leading the way forward and towards a more sustainable, meat-free lifestyle, so why not jump on this growing vegan trend?⁶

Industry: Food manufacturing

Products/ services: Plant-based food and beverages. Vegan alternatives. Meat alternatives.

Target market: B2B & B2C - Eco-conscious, plant-based customers.

Considerations: To manufacture plant-based food, you may need to team up with a reliable factory and product-development team.

#4: Halal confectionery manufacturer

Business analysis: Demand for halal food is on the rise across Pakistan and the rest of the world. The global halal food market reached $1.9 trillion last year and is set to continue to rise in 2021. Halal food refers to food and drinks that have been carefully prepared according to religious rules defined by Islamic dietary law.

Halal snacks and in particular confectionary can be sold across the world and is a low investment small business idea, worth considering in 2021. While Asia Pacific is the leading market for halal goods, there is also room for small to medium-sized startups to meet the rising demand for halal candy across Europe⁷.

The demand for ethical and halal goods is primarily driven by a global Muslim population which has grown significantly to one-quarter of the world’s population. By 2025, the global halal food industry is expected to be worth $9.71 trillion. For those interested in starting a business as a halal food manufacturer, the UK should be your target market. In 2018, gummy manufacturer Haribo opened its first halal candy store in the UK, and leading supermarkets are also expanding their halal and vegan offerings⁸.

Industry: Halal Food Manufacturer

Products/ services: Halal and vegan confectionery

Target market: UK leading supermarkets and independent businesses

Considerations: You will need to consider the cost to ship goods to the UK from Pakistan when exporting halal confectionery in large quantities, in order to make a healthy profit.

#5: Henna & mehndi wholesaler

Business analysis: The global hair color product market is set to witness substantial growth between 2019 and 2026, due to growing awareness of online beauty trends and natural self-care. This expected growth is creating a unique opportunity for henna wholesalers from Pakistan. With a consumer shift towards natural cosmetics and beauty products, henna is becoming more popular for hand and body decoration as well as natural hair dye. Real henna is generally safer to use and comes in orange, red and brown tones⁹.

Since Covid-19 has disrupted the beauty industry and caused a lot of hairdressers and beauty salons to close their doors to the public for good, consumers are now looking online for affordable ways to dye their hair, tint their eyebrows and temporarily tattoo themselves with henna. Not only is this a creative way to pass the time during lockdown but it’s also considered safer than box hair dye. Plus, Pakistani weddings and festivals also call for henna and mehndi designs, so Pakistan businesses that start to sell henna can target both local customers and overseas buyers. Since henna is very affordable, this type of business can be started with even a modest initial investment.

Industry: Natural beauty industry

Products/ services: Henna hair dye, mehndi kits

Target market: Pakistani women, and overseas buyers of natural hair dye.

Considerations: Henna is already an affordable product to buy, so securing a healthy profit will take market research. What can your business offer that adds value and demands a higher price tag?

#6: Leather footwear manufacturer

Business analysis: While leather exports from Pakistan dropped by 5.6 percent from $58.186 million to $54.955 million from 2019 to 2020, year on year, exports have increased by 12.19 percent. So, if you’re thinking of starting a business in Pakistan, perhaps high-quality leather footwear is the ideal industry for you. Although India and China are major competitors within this space, Pakistan is well positioned to compete. With low manufacturing and production cost along with high-quality materials readily available, there is certainly room to open a small leather footwear manufacturing business from Pakistan in 2021¹⁰.

Moreover, leather garments worth $52.5 were exported from Pakistan in the first two months of 2021, showing a 2.81 percent increase from 2020¹¹. As one of the oldest and most prominent industries in the country, the manufacturing of footwear should be an easy industry to move into, with plenty of experienced and talented local professionals available to hire to help you business succeed.

Industry: Leather Footwear

Products/ services: High-quality handmade leather footwear

Target market: European and US B2B and B2C buyers.

Considerations: While leather continues to be in demand, there is also a major global shift towards veganism, which rejects leather and promotes faux leather, eco-friendly companies.

#7: Virtual assistant

Business analysis: The world of virtual assistants is an interesting business idea to explore, especially if you’re looking for a low investment start-up.

As a great Pakistan business idea, you can manage a team of virtual assistants from a small office or online, and help provide professional support to clients from around the world. Virtual assistants can take the role of data entry executives up to experienced personal assistants. You can choose to specialize in a particular field of VAs such as marketing and social media management, or customer service and IT support. By having a niche, you can build a brand and make your company stand out from most of your online competitors. All you need to start this type of business is a high-speed, stable internet connection!

Industry: Virtual Assistants

Products/ services: High-quality virtual assistants that can help save businesses time and money.

Target market: Busy international clients looking for reliable professional help.

Considerations: English is often a key requirement for virtual assistants, especially if you want to attract US, UK and European customers.

#8: Air quality smart masks

Business analysis: As Covid-19 vaccinations are starting to be rolled out, the need for face coverings and PPE will eventually begin to decline, but a smart move for Pakistan businesses is to branch out into air quality smart masks. Environmental issues are a growing concern around the world, and air pollution is a significant health concern for city-workers. To protect yourself against air pollution, air masks are becoming increasingly popular especially for those who cycle to work and are exposed to fumes on a daily basis. With light-weight designs that offer comfort and smart filtering systems, this is an industry that is about to emerge within the health and technology sectors. Although combining technology with face masks is not a new concept, in fact AirPop Health have launched a sensor mask that measures breathing rate and alerts the wearer when it’s time to change their disposable filter¹².

Industry: Environment, Air Quality, Urban Healthcare

Products/ services: Air quality smart masks

Target market: B2B & B2C concerned about pollution and air quality.

Considerations: This is a new emerging market and more market research is required before you heavily invest in this sector. If we combat air pollution by moving towards smart, sustainable cities, the demand for air quality face masks might drop.

#9: Herbal medicine manufacturer

Business analysis: Herbal medicine involves treating a wide range of health concerns with natural and plant-based remedies. This traditional approach to healthcare is on the rise, with The World Health Organisation stating that the trade in medicinal plants, herbal raw materials and herbal drugs is growing at an annual growth rate of around 15 percent¹³.

Pakistan businesses able to trade in herbal medicine can take advantage of the international rise and reliance of e-commerce in 2021 and start selling almost instantly on a global scale. The global herbal medicine market was valued at $138350 million in 2020 and is expected to almost double this figure ($218940 million) by the end of 2026¹⁴.

Industry: Global herbal medicine

Products/ services: Plant-based medicine, natural remedies, herbal substances, raw herbal materials

Target market: Worldwide B2B & B2C

Considerations: You will need to be aware of what natural products are restricted in each country you plan to export natural and herbal medicine to.

#10: Sustainable fish farming

Business analysis: Fish farming is a highly profitable and well-established business in Pakistan, however you can take this a step further in 2021 by specializing in sustainable and eco-friendly processes. The ‘blue revolution’ is the combination of technology and aquaculture that provides a sustainable approach to fish farming.

Using the latest developments in technology, farmers can provide high-quality fish and seafood without the ammonia concerns currently associated with fish farming. While this is not a new business idea, it is still extremely sought after in countries such as Japan, India, Thailand and Malaysia. The World Bank report, ‘Revitalising Pakistan’s Fisheries’ states that the European Union countries, Japan and the US are the world’ biggest export markets for seafood, but Pakistan exports to these countries only accounts for less than 3 percent of export earnings. So, there is clearly huge potential for Pakistan to capture a larger percentage of these markets by improving their quality standards, processing plants and supply chain¹⁵. For anyone already experienced within the fish farming industry, this is certainly an interesting business idea to consider in 2021.

Industry: Sustainable fish farming

Products/ services: High-quality seafood

Target market: B2B & B2C who value high-quality seafood and are concerned about ammonia levels in seafood.

Considerations: This can be an expensive business idea to start from scratch, so is best for those already experienced within the food manufacturing and seafood industry and are looking for a way to diversify or expand and develop their product range.