Daraz Eyes Expansion to Compete Against Amazon

Pakistan’s leading e-commerce retail platform Daraz expects to host 300,000 small to medium enterprises (SMEs) in the next two years as the company looks to strengthen its position in the domestic market in the face of prospective competition from the global powerhouse Amazon.

The CEO and founder of Daraz Group, Bjarke Mikkelsen, told Reuters that it wants to “get to 300,000 active and educated SMEs selling on our platform within the next two years, and that will basically create a million jobs”.

He added that Daraz has managed to penetrate just two percent of the South Asian eCommerce landscape so far, but he believes the platform can be expanded 10 to 20 times.

Data from the Ministry of Commerce shows that Pakistan’s eCommerce sector ascended 35 percent in the first quarter of 2021 to Rs. 96 billion ($548.89 million), up from Rs. 71 billion ($405.95 million) during the same period last year. Pakistanis accounted for 35 million of the 70 million people who visited Daraz’s website last month.

The CEO of Daraz remarked that more people in Pakistan are now willing to use digital services, and it is the right time for the company to address their needs.

Daraz currently employs nearly 10,000 people in four other South Asian countries — Sri Lanka, Bangladesh, Nepal, and Myanmar — and has access to 500 million clients. Mikkelsen claims that Daraz has invested $100 million in Pakistan and Bangladesh over the previous two years. He said the company is aiming for roughly $1 billion in sales this year through its platform which has had 100 percent year-over-year order growth in the last four years alone.

Pakistan’s fast thriving middle class with over 60 percent youth population and over 100 million broadband subscribers makes the region a huge market for e-commerce platforms and related businesses like Amazon, and possibly Walmart.

Retail heavyweights Amazon and Walmart both run large operations in neighboring India, a country that also has indigenous eCommerce platforms run by the highly popular Reliance and Tata groups.

Founded in 2012, Daraz was acquired by Chinese behemoth Alibaba in 2018 and has more than 100,000 SMEs running their supply chains through the platform. While the mostly Pakistani business is not as big as the ones running the money games in India, Daraz still plans to beef up in the next few years to offer competition at the highest level.

  • Not going to work as long as Daraz doesn’t take action against deceitful sellers. These sellers spoil the name of Daraz. These sellers advertise one thing and send something else

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