Daraz has introduced a new customer experience hoping to increase its users on a month on month basis. The online shopping platform is now providing the users with an “in-app shoppable live stream”.
The e-commerce app claims to be the largest player in Pakistan’s e-commerce landscape. In an interview with Dawn, Daraz Group Chief Commercial Officer Jan Poter shared that the business is projecting its active monthly users to ‘more than double’ to 30 million in November. It allowed its users to watch the ICC T20 World Cup free of cost on its app in a bid to increase its number of customers.
Poter said, “We’re expanding in scope. We don’t just want to be a one-dimensional shopping app. This can be something that repositions Daraz”. The in-app shoppable live stream feature was originally introduced by the company’s sponsor in China and became quite popular.
The feature allows a seller in a market to simply open his phone and sell his products to customers who can watch him live. The user is not required to exit the live stream to add the items to their cart.
Poter added, “Selling online through clicks was last year’s story. Today’s story is live-stream selling”. He added that none of their competing online shopping platforms is offering the in-app shoppable live-stream feature as yet.
The segment has garnered such popularity in China that Poter is expecting it to make up a 20 percent share in Beijing’s e-commerce market. He said, “It’s super-engaging like TikTok. People always come back for the experience.
Poter noted that Daraz has a 40-45pc share in Pakistan’s “addressable market” which as per his estimates is worth near $1 billion. Daraz app has nearly 100,000 sellers offering 25m products for sale, after an increase from 15m products during the same month last year.
He remarked that the average number of orders was within the range of 4,000 to 8,000 per day back in 2017. He continued, “Now the daily average is 11 times higher”. The average item value is between $7 and $13, and there are numerous items in a single order.
Poter explained, “Historically, we’ve had a high average order/average item value because the share of electronics (in total sales) was higher. We want this number to come down”.
However, unlike Daraz’s D-mart’s new and relatively small competitors like Airlift and Pandamart, its claim to deliver groceries within hours remains unfulfilled.
The orders get delivered the same day if the user places them prior to a specific cut-off time but in most cases, the groceries are delivered the next day.
Porter said, “What a lot of people don’t think about is the infrastructure that you need and how costly that is. Can you ever be profitable with something like that?” He added that his company is aiming to attain “assortment breadth,” instead of quick delivery.
The business reports eye-popping numbers, yet it is operating at a loss. Poter is of the view that the company will achieve breakeven “in a couple of years” in Pakistan while stressing that they are investing money for long-term returns.
Poter noted, “It’s a deliberate strategy. If we decide, we can become profitable tomorrow at the expense of certain growth that we’re pursuing. It’s about pushing just a few buttons, creating a few tweaks here and there. But the idea is to build a robust customer base. We’ve achieved close to triple-digit top-line growth in the last couple of years”.
