Regional online retailer plans major investments

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Ismail Hossain | Published: October 15, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

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Regional online retailer Daraz said a good chunk of its Tk 4.43 billion (50 million euros) planned investments will flow into Bangladesh.
But the company will not say how much Bangladesh will get, with Pakistan and Myanmar sharing.
"We'll place such an offer before online shoppers of Bangladesh on the occasion of Black Friday sale, which will be remembered for many years," Bjarke Mikkelsen, co-chief executive officer of Daraz, told the Financial Express at its office in city on Wednesday.
Daraz said it would 'surprise' the Bangladeshi shoppers by introducing a local version of the year-end American sales spree known as Black Friday on November 27th of this year.
Dr. Jonathan Doerr, co-CEO of Daraz Asia, was also present during the conversation with Daraz co-CEO.
They are also planning to carry out advertisement in the mass media and intensive campaign on the Black Friday sale.
Around 200 local and global brands, including Apex, Bata, Yellow, Noir, Symphony, The Body Shop, Huawei, Samsung, Walton, Aranya, ShadaKalo, Apple, LG, Fastrack, MAC, Nikon, Ecstacy, Panasonic and Doors teamed up with Daraz in Bangladesh to expand their market online.  
Declining to share country-wise breakdown of €50 million cash injection, Mr. Mikkelsen said, "Bangladesh is the one of our biggest opportunities, so it means, a good part of it will go to Bangladesh."
"The online shopping trending in Bangladesh is developing fast, internet penetration is growing fast, the transition to smartphones is overwhelming and the number of users on the Daraz shopping App is increasing exponentially," he said.
"The retail market is growing in the country at 2.0 per cent to 3.0 per cent, while etail (a portmanteau of E-commerce and retail) is growing at only 0.1 per cent," he said.
"If this 0.1 per cent growth continues, Daraz will be happy to be in Bangladesh," he added.  
He noted that two million visitors visited daraz.com.bd last month, which he called 'amazing'.
Daraz made commission arrangements with its partner companies aiming to introduce healthy business practice in Bangladesh.   
"The commission arrangement with companies depends on the categories, size, price and weight of products, ranging from 5.0 per cent to 30 per cent," he said.
Daraz has its own set-up to deliver products at the doorstep of customers apart from parcel services. Besides Dhaka, it is expanding its service to major cities, including Chittagong, Sylhet.
"In the capital, delivery cost is ranging from Tk40 to Tk60 depending on distance," Mikkelson told FE.
"Unlike other leading online market places in Bangladesh, Daraz only sells new products at their online marketplace."
He said not only big brands can put their products at Daraz, any individual, small and cottage industries also can place their products for sale.
Daraz still prefers 'cash on delivery' method for the sale over mobile payment, ATM card, credit card and other electronic payments systems.
"We sat with the banking authority and other e-payment system existing in Bangladesh for finding out effective online payment for Daraz," he said.
Internet subscribers reached 52.219 million at the end of August this year, according to the Bangladesh Telecommunication Regulatory Commission.
More than 80 per cent of e-commerce transactions in Bangladesh are carried out in three major cities-- Dhaka, Chittagong and Gazipur City, according to a recent study by Kaymu.com.bd-- a venture of Rocket Internet AG that also partly owns Daraz.
The Kaymu report also revealed that new users were also being attracted to online shopping. New online shopping visitors stand at 49 per cent of the total traffic, while returning visitors are 51 per cent.
Around 71 per cent online browsers use either a desktop computer or laptop, followed by mobile phones and tablets with 26 per cent and 3.0 per cent respectively, according to the study.
Of the €50 million investments, €20 million comes from the CDC Group, the UK Government's Development Finance Institution (DFI), and €30 million from existing investor Asia-Pacific Internet Group (APACIG)--a joint- venture between German internet platform Rocket Internet and Qatari telecommunications provider Ooredoo.
Daraz-an e-retail brand, launched its operation last February in Bangladesh as daraz.com.bd. Meaning 'Drawer' in Urdu, it was founded in Pakistan in 2012 as an online fashion business, which is now planning  to become Bangladesh's number one online market place among other several hundred rivals, as it eyes the country's growing market in the digital sphere.   
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