“There is a huge opportunity here for us and we are convinced these emerging markets will grow rapidly over the next few years.”
Daraz since starting operations in Bangladesh has very quickly become the frontrunner in the E-commerce industry here. Recently the e-commerce giants raised $56 million from their investors led by the UK Government’s development finance institution, CDC Group and Asia Pacific Internet Group (a joint-venture between Rocket Internet and Qatar-based telecommunications company, Ooredoo).This investment is to be injected in the emerging markets in Bangladesh, Pakistan and Myanmar. They also recently announced that they will be introducing the first ever online “Black Friday” sales event on November 27th, which will offer ridiculous discounts and price cuts for Bangladeshi online shoppers. During their short but hectic trip to Dhaka, IBT caught up with Daraz Asia’s Co-CEO Dr. Jonathan Doerr to hear from him about Black Friday and what they have planned for the future of the E-commerce industry in Bangladesh.
E-commerce is on the rise in Bangladesh. How does Daraz along with its investors intend on taking advantage of this new E-commerce wave?
We know the e-commerce industry here is still young and it lacks big players. There is a huge opportunity here for us and we are convinced these emerging markets will grow rapidly over the next few years. If you look at the regions of Bangladesh, Pakistan and Myanmar there’s a huge population of around 400 million people, so the potential for growth is these areas is immense. We feel that it is also our responsibility to invest wisely. With our investments we aim to grow a healthy business and make e-commerce as big as it is in other countries.
Our investors have several expectations but what comes foremost is the objective to grow a stable and strong business. This means that it must grow in a way so that we can provide the best customer experience and the biggest assortment of products at the best prices.
Out of the $56 million being invested, a large portion will be utilized in Bangladesh. What helped Daraz decide on making such a massive investment in Bangladesh?
It’s not really just our decision, but it’s one taken by the investors as well. We’ve raised $56 million from our investors at CDC Group along with Rocket Internet and Ooredoo’s joint venture, the Asia Pacific Internet Group. A substantial amount of funding is required as the e-commerce sector in Bangladesh is still just beginning to pick up and we have to invest wisely to help the industry grow. Internet penetration is at a decent level already, but we still have to try to educate our buyers on e-commerce and how online shopping works. Overall, the aim is to help this business grow and thrive in emerging markets such as Pakistan, Myanmar and Bangladesh.
Have any strategies been formulated regarding how Daraz is to proceed with this funding in Bangladesh?
Of course, both we and our investors have strategies about how to proceed with this investment. We’ve set goals, targets and ideas on how to grow the business. Daraz.com.bd will be the biggest e-commerce platform in Bangladesh. In this regard, it’s important to have the right ideas, the right people and of course, support and funding. For us it’s important that we not only focus on our business model but also manage to give back to the country. If you look at our staff, they are being provided with education regarding e-commerce, online marketing and so on. They are learning things which Rocket Internet had previously learned from their other ventures. This way we are giving back to Bangladesh in terms of skill development.
We have a big advantage in having Rocket Internet as one of our investors as it has immense experience in building e-commerce businesses around the world. That along with the experience gathered over the years by my Co-CEO Bjarke Mikkelsen and I, has allowed us to come up with the appropriate strategies for these markets.
What can you tell us about Black Friday and why it’s being started in Bangladesh?
Black Friday is a concept which comes from the West and it’s one of the biggest sales event of the year. However, such an event has yet to be established here. So we thought it would be a great idea to bring that event to Bangladesh and its people. Last year in the US alone, Black Friday generated $40 billion worth of revenue online. Since it will be the biggest e-commerce event in Bangladesh, we are working very hard to get the best deals for customers. We have to negotiate with our vendors and our suppliers because we are a marketplace and in partnerships with these brands we plan on making it a special event for all our customers. It’s a one day event so everything will start at midnight on the 27th of November. The main focus will be on Friday while on Saturday and Sunday we may have some special offers that carry on too. People have to know that we have a lot of products but with these huge discounts, there will be huge demands and of course they have to be very fast if they want to get the desired deals.
We have to prepare our IT division for the huge incoming wave of people who will be visiting our website and app. We also want to make sure we have enough customer service agents who can receive our calls because some of our customers place orders via phone through the Daraz app. We are sure that people during midnight on the 27th will sit on their computers and their phones, maybe use the Daraz app to access the Black Friday deals when they are finally available.