Black Friday: Daraz group co-CEO expects volumes to rise three times

E-commerce market has yet to reach even 1% of total retail market

LAHORE: The online shopping spree in Pakistan is gaining momentum beyond industry’s expectations and retailers are now adopting local as well as global events to further fuel this binge.

A couple of years ago, Black Friday in Pakistan was nothing more than a distant idea borne out of television screens, where Westerners avail themselves of 24-hour shopping discounts, by standing in long queues – with quarrels breaking out occasionally over discounted products.



However, Pakistanis finally got a taste of Black Friday for their own. Last year on November 26, a battle between few ladies on the eve of availing discounts at a popular brand store made headlines.

Critics associated that with Black Friday, though the management was simply clearing their stocks by offering huge discounts. That scuffle further sparked the Black Friday mantra among the rising middle-class and the retailers in Pakistan.

However, the online shopping platforms, such as daraz.pk, which introduced the Black Friday concept last year by offering huge discounts through its vendors, have proved more fruitful than expected and this year these platforms are expecting the traffic on their website to more than double on the eve.

“The Pakistani shoppers’ response to last year’s Black Friday was gigantic, which clearly shows the willingness of citizens to spend, and if this enthusiasm is fuelled by huge discounts of up to 80%, then one can only speculate the exigency,” said Jonathan Doerr, Co-Chief Executive Officer of Daraz group in an interview with The Express Tribune.



“Last year, we gave discounts of Rs132 million and this year we are expecting the volumes to be three times higher,” he added.

The Daraz group is a venture of Rocket Internet Gmbh, a German incubator, which entered the e-commerce market of Pakistan in late 2013. The group offers more than 250,000 products with some 1,500 vendors on normal days, except for Black Friday, when it offers around 100,000 discounted products. But black Friday is not the only day when the group offers discounts.



Based on public response and vendors’ willingness, it started offering discounts on other days as well like the Independence Day to further penetrate and explore more customers in urban as well as rural areas.

“Pakistan is actually a growing e-commerce market and this sector has not even reached 1% of the total retail market; the future potential is huge as now more and more vendors, big players as well as banks are joining this market,” Doerr said.

Executing each and every order on special occasions was not the only challenge the group was confronted with. Convincing the vendors to offer huge discounts and to tackle logistics support were other areas where the group was focusing even more.

Doerr said they initially faced issues convincing vendors to offer such discounts. “It looks difficult initially, but observing the jubilant response we found it much easier this year [to obtain discounts] from our vendors,” he said adding, “It all depends on the relationship with the vendors, as they are the ones who give the discounts”.

The company currently is getting more than 50% of its total orders from second-tier cities and rural areas, and therein lays the challenge of making the deliveries of products possible within a timeframe.

Right now, more than 50% of logistics support is being executed by the company itself. “We have to deliver the orders to Gilgit-Baltistan, it is a challenge for the company to deliver the products on time,” Doeer said.

This is the area which needs most of the attention, proper roadmaps and further partnerships with other logistical partners, another sector which could definitely get a boost along with the e-commerce industry of Pakistan, Doerr added.

the writer is a staff correspondent

Published in The Express Tribune, November 21^st, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.