Ucaaz, named after pre-Islamic Makkah market, plans to use artificial intelligence to aid standalone neighborhood shops KARACHI: A startup powered by artificial intelligence and backed by UAE and international investors has launched a chain of retail stores in the Pakistani city of Karachi. The initiative is aimed at reviving the diminishing trend of kirana standalone community stores in Pakistan. A surge in the number of supermarkets and malls throughout the south Asian country of 220 million people, has coincided with the demise of many community retail stores, despite them having offered a wide range of products at significantly lower prices to small neighborhoods for decades. But the new venture Ucaaz – which derives its name from a pre-Islamic bazaar in Makkah that has now become a tourist destination in Saudi Arabia – aims to revive the one-stop shops by connecting buyers and sellers using digital and physical means. Syed Saad Shah, founder and CEO of the company that has been financed by investors from the US, the UAE, and Pakistan, told Arab News: “It’s a virtually integrated system in which all stakeholders including distributors, retailers, and small retail stores are interconnected. We will digitally manage our inventories and supply chains. It is a first of its kind in Pakistan. “We are offering solutions to the problems of small retail stores such as ordering, sales promotion and, most importantly, taxation. This is an irregular trade sector with immense economic potential, though it largely remains untaxed. “We have designed a program which will help us cut out the middleman and directly interact with manufacturers. This ensures that the prices offered by our franchises remain competitive and all necessary products are available in one’s proximity. Customers will be able to place their orders using the mobile app,” he said. The startup plans to open around 120 franchises in Karachi before branching out to at least five other Pakistani cities. The stores will be equipped with a point-of-sales (POS) system offering special support to trading activities and helping the government generate more tax. “At present, kirana stores are not integrated with the POS system, and this huge network of stores remains out of the tax net. Ours is the first of its kind hybrid model of e-commerce stores which has the potential of creating a huge revenue stream for the government,” Shah added. Pakistan is already striving to reduce cash-based transactions. The central bank has estimated that a shift to electronic payment mechanisms could boost the country’s gross domestic product (GDP) by 7 percent, create 4 million jobs, and result in $263 billion new deposits by 2025. The investors that have bankrolled the startup pointed out that they were attracted by the idea of reviving small retail stores through technological innovation. Dr. Jawad Arif, a Pakistani-American investor, told Arab News: “This is a data-driven project, and the Ucaaz team has made a huge achievement by providing easy solutions and making it possible to streamline inventories.” “It is very easy for small shop owners to keep track of their list of products, communicate with vendors and, at the same time, make a profit. The system is ideal for densely populated countries such as Pakistan and Indonesia, though a little bit of fine-tuning may also make it suitable for the US market.” Arif was optimistic that the company would make inroads in Turkey and Indonesia within the next three to four years. “Ucaaz plans to increase the number of stores to 500 in Pakistan before launching the initiative overseas,” he said. Shumail Haider, a shop owner in Karachi’s Federal B. Area, said: “On the back of this innovative solution, we now only need to focus on managing sales. “Replenishing stocks is usually a major problem for small traders, but supply chain management and promotion taken over by a tech startup can be a significant facilitation.”