Foreign investors, keen to expand in other countries, have seen South Asia as a lucrative market with its bulging population and growth in internet penetration. Rocket Internet is one of the foreign companies that have made their presence felt in Pakistan, taking on local competition with its aggressive expansion strategy. Backed by heavy investments, the German based e-commerce focused venture capital firm and startup incubator has captured a share in the country’s growing market.
The company has given stiff competition to leading portals in various spheres including pakwheels.com, zameen.com and homeshopping.pk with clones including carmudi, lamudi and daraz.pk clones. Since the start of their operation in 2012, they have doubled the number of their ventures, pouring in millions of euros.
During his visit to Karachi, Asia Internet Holding co-Chief Executive Officer (CEO) Koeen Thijssen said that Pakistan has the most number of ventures opposed to the rest of the Asian countries Rocket Internet has invested in. Asia Internet Holding, a joint venture between Rocket Internet and Qatar-based Ooredoo, builds and funds startups across Asia, particularly focusing on ecommerce and mobile services. The core focus is emerging economies in Asia, particularly Pakistan, Myanmar, Thailand, Malaysia, Singapore, Indonesia, Vietnam and the Philippines.
He said Rocket Internet will pump €180 million during the next three to four years as investment in Asia, declining to quote even a ballpark figure for Pakistan’s share.
“But a major chunk will be invested in Pakistan,” he said.
Recently, Daraz.pk – based on the amazon model – included the electronics category on its online shopping store. “The response has been very good with almost 100 iphones sold in a matter of seven days.
“The profit margins in electronics are very low. The local sellers did not have the platform, skills or the delivery network to sell in high volumes, so they go through us.”
The co-CEO said Pakistan is an interesting case because most of the local ventures are headed by Pakistani nationals, while in the rest of the Asian countries, expats tend to head the ventures. “It’s very unique for Pakistan. It seems that the country naturally has the entrepreneurial gene,” he said, appreciating the country’s workforce. “It’s difficult for expats to recognize local market mechanics.”
When asked about the company’s market strategy, he said, “It is simple; it aims at transparency by providing comparable prices on its websites. We are also using market place strategy for all our ventures,” Thijssen added.
Internationally, the German company – owned by the Samwer brothers– is criticised for its business model that focuses on replicating successful ventures rather than coming up with genuine ideas.
The writer is a staff correspondent
Published in The Express Tribune, December 8th, 2014.
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This was a PR piece for Rocket Inc.