‘We’ve set ourselves a big target for 2022’Bjarke Mikkelsen and Lino Ahlering on customers trust issues on e-commerce in Nepal and Daraz’s plan to mitigate them.
Online shopping platform Daraz has been in Nepal since 2016. Buoyed by the constant growth it has seen over the years, Daraz recently announced its plans to maintain the momentum, setting a goal to reach out to 20,000 customers each month. It has set yet another ambitious goal for 2022—introducing digital payment to connect with five million customers. As a part of its drive to ensure quality service, the online shopping platform also runs Daraz University which aims to educate prospective sellers on how to use the e-commerce platform, currently educating 500 sellers each month. In an interview with the Post’s Krishana Prasain, Daraz Global CEO Bjarke Mikkelsen and one of Nepal’s Managing Directors, Lino Ahlering, discussed customer trust issues in e-commerce, and Daraz’s upcoming plans. Excerpts:
Many say e-commerce has been unable to garner customer trust because of product duplication and sub-standard service and return policies. What is Daraz doing to address these issues?
Mikkelsen: It takes time to earn customers’ trust in any market. E-commerce is a new and emerging industry in Nepal. But given our commitment and strong focus on these aspects, we are really confident we can win back customer trust that we perhaps lost after Daraz 11.11 last year.
Customers who didn’t have a good experience with Daraz should write [to us] about it and upload images. We do not want to hide any problems and repeat the mistakes we have made.
Ahlering: Next year we will have e-wallet and one will be able to make transactions easily. The best way to build trust is by delivering goods effectively and we know that we can do better this year.
Although it was well marketed, Daraz 11.11 was widely criticised on social media. Where do you think the company lacked and how are you planning to address the complaints?
M: Daraz 11.11 was a very new concept and we learned a lot—in terms of logistics infrastructure and increasing engagement with our customer base. We had many orders to deliver in a short period of time but we lacked the ecosystem to support the process. We did well, our sellers did well, but our logistics partners messed it up. So we are focused on every part of the ecosystem from sellers to delivery.
A: We have fundamentally changed the logistic process and we are looking at every single aspect for improvement. We have launched our pre-payment gateway, which is new for the country’s e-commerce market and put a lot of effort in this regard. We continue to engage with customers. We are a platform connecting buyers and sellers.
Even though the response was not as positive as expected, we made Rs220 million in a single day of Daraz 11.11.
Are you planning to introduce any more shopping fairs like Daraz 11.11?
A: We are planning to bring the same kind of shopping fair again this year, and we have been preparing for it. We are working with sellers, and we have already started the process despite it being two months away. We hope to make it a big success in the country.
M: When you do something big, there will be mistakes. But our job is to minimise mistakes. It’s our commitment.
A: From order generation to marketing and delivering on time, this year we are going to be a lot more prepared. We are going to be very strict about sellers. Customers’ review and rating will provide more transparency about products.
Before going to the market this year, we have reviewed all of our processes. We are now able to provide excellent service to our customers. We also have a seven-day return policy—sometimes 14 days—for all our Daraz premium services.
The government recently passed the National E-commerce Strategy 2019 and it has been preparing its guidelines. Do you have any suggestions for the new guidelines?
A: We have held talks with the government and went through the details. We are very optimistic. There are lots of discussion points and plenty to execute from both sides. The government is focusing on clarifying the legal operations of e-commerce in the country. It should also consider and protect consumer rights. With better coordination on these issues, the government will provide the right foundation for the future of the industry.
How has Nepal’s response to Daraz been? How many transactions take place through the site each year?
M: We deliver approximately 100,000 items per month and we have been growing more than 100 percent each year, for the past three years. We hope to continue this trend for the next four years. We’ve set ourselves a big target for 2022.
How do you see the future of e-commerce in Nepal?A: We are very optimistic. We want to drive this growth and GDP forecast is also positive. Also, the government is working on new policies. If these all tie together, there will be more investment in the country and we will be able to continue on our success.