‘As in other countries, the pandemic has helped e-commerce businesses accelerate in Nepal too’Daraz Nepal’s managing director on Nepal’s e-commerce landscape, the pandemic’s impact on the sector, the company’s preparation for 11.11, its biggest annual campaign.
If there’s one industry that has seen immense growth during the pandemic, it is the e-commerce industry. With social distancing becoming the new norm and safety concerns over going shopping in person, e-commerce sites have been given a new-found importance. Daraz, one of Nepal’s leading e-commerce platforms, has not only seen its user base increase but also a huge jump in the number of sellers signing up to sell on the platform. The Post’s Tsering Ngodup Lama had an email interview with Daraz Nepal’s managing director Lino Ahlering to learn about Nepal’s e-commerce landscape, the pandemic’s impact on the sector, and the company’s 11.11 plans, which the company dubs as the world’s biggest online sale day and is held on November 11 every year.
Daraz, previously known as Kaymu, started operations in Nepal 2014. How has Nepal’s e-commerce landscape changed since then and how has Daraz adapted to it?
When we started our operations in Nepal in 2014, e-commerce wasn’t as common as it is today, and many viewed e-commerce with a lot of scepticism, which is common when something is so new and so different. Like every other e-commerce site operating in a new market, we had to work very hard to change the public’s scepticism. To do so, some of the key areas we focused on and continue to do so are to have a wide assortment of products with attractive pricing, fast and convenient delivery, and resolving customer’s issue as quickly as possible.
And with each passing year, the number of customers and sellers on the platform has grown steadily. The major inflection point for us was Alibaba Group’s acquisition of Daraz in 2018 which gave us the opportunity to become part of the largest and most successful e-commerce company in the world. This was not only a major push in confidence for our teams but also for our consumers. Today, we have more than 1.7 million registered customers, 800,000 active monthly users, and 6,000 sellers. But we still have big dreams.
How has the pandemic impacted Nepal’s e-commerce landscape and how has Daraz adapted?
In many countries, the pandemic has helped e-commerce businesses accelerate, and it is no different in Nepal’s case. To cater to the sudden increase in the number of people shopping online, many new e-commerce sites entered the industry. Keeping this in mind, Daraz partnered with leading supermarket chain Big Mart, and this allowed us to give our customers access to its more than 3,000 daily essential products. Customer response has been phenomenal.
In 2018, Daraz conducted its first ever 11.11, the platform’s biggest annual sale campaign. The campaign generated a lot of interest but the company also faced a lot of criticism from customers: products being overpriced, incorrect deliveries and delays. Looking back I can say we were simply not ready at that time. Our sales forecasts for the campaign exceeded massively but our logistics infrastructure was not able to handle the load, leading to longer delivery timelines. As for product pricing, we do not engage in price setting as we do not hold any inventory ourselves. We have learned a lot and our working culture is such that we learn extremely quickly and rarely make mistakes.
What has Daraz done since to improve user experience?
We cross-check seller pricing for campaign offers and compare them to product prices before a particular campaign to spot any outliers. When it comes to quality, we have already achieved major improvements in coordination with our sellers. We provide regular training to our sellers, and we have also delisted sellers who have not performed up to the mark. In 2019, during our second edition of 11.11, we hosted more than 350,000 users and our 3,000 sellers sold more than 150,000 products. Our operations teams also ensured timely delivery, leading to a much higher customer satisfaction.
To ensure even faster delivery this year, we have been working very closely with our logistics partners to guarantee they can manage such massive loads of packages. We have been preparing for this year’s 11.11 for one year and increased our team considerably with more than 900 additional people hired.
There’s already a lot of buzz surrounding this year’s 11.11. What can customers expect from this year’s campaign?
To offer something special for shoppers across the country, we are bringing huge discounts with mega deals of up to 60 percent discounts on products from our pool of more than 6,000 sellers. On top of that, we will be offering special vouchers and provide shoppers access to additional discounts up to Rs 3,000 off on debit/credit card payments through eleven partner banks.
Lastly, how optimistic are you about the future of Nepal’s e-commerce industry and why?
With high smartphone and internet penetration, Nepal has a solid foundation for the development of e-commerce and digital businesses. Alibaba would have not made the move and invested in Nepal if it didn’t believe in the potential of this country.
We are here to stay and we really see our role as an ecosystem builder. We do not only want to grow Daraz but grow along with all the stakeholders—from sellers, various payment partners to our logistics companies—on Daraz platform. We are very confident about the future of e-commerce in Nepal and we are working really hard to build more trust in this new part of the economy. But we can not do it alone; it has to be a collective effort.