Daraz CEO: Need to localise if we want to achieve success in Nepal

Bjarke Mikkelsen is the co-CEO of Daraz Group, a popular online shopping company of the region. He has been with the company for the past four years. Prior to joining Daraz, Mikkelsen worked at Goldman Sachs where he worked as its Executive Director for its branch in London.

Mikkelsen spoke to Onlinekhabar about how his company has changed after being acquired by Alibaba and why localising strategies here in Nepal was important for them to grow as a business. Excerpts:

What has changed since Alibaba acquired Daraz?

Three things have changed mainly. First is the technology. Our value proposition to the customer has improved significantly as we are providing a lot more services. For example, we have started the instant messaging service which allows customers and sellers to communicate with one another in a regulated way. It has opened a world of opportunities. The way we display relevant product to relevant customers at the right time is also a huge improvement we’ve made in recent times.

Number two is the supply change. It has increased substantially as now we are working with sellers around the world and also opening up to Nepali sellers to sell to consumers around the world. This is something we’re working on as a big project with Alibaba to integrate all of their different marketplace platforms. We’re also working on a project which will allow a Nepali seller sign up on Daraz and then automatically be eligible to sell to China or anywhere around the world through one single account.

Number three is just learning. So far, we have been figuring out all on our own, but now that we are affiliated with Alibaba we can do things a lot more efficiently because what we are doing here now, they did it in China years ago.

When can people buy items from Alibaba here in Nepal?

You already can, to some extent. We have a global collection in the app through which you can directly order stuff from China.  Slowly, we will be doing more in that aspect.

Why did 11:11 fail in Nepal as compared to other markets?

In general, that was a new concept here in Nepal and we got to learn a lot from it. Alibaba’s 11:11 is the biggest shopping date worldwide and we wanted to try it here too. From a sales perspective, I don’t think it failed. The sales volume was higher than what we expected. But we had these learnings.

We found after the event the certain customers had to wait longer for the items they had ordered. But considering the order volume that we had, we actually enforced a lot after this campaign. We focused a lot on logistics infrastructure.

Since then, we have also been evaluating the performance of every seller. We do not want our customers to suffer. We sit with them and bring out solutions to make them better.

After 11:11, we also launched a campaign in Nepali New Year, and it was good. We have delivered items in a better manner during that campaign than we do on normal days. Be rest assured, 11:11 will be better this year.

How is Alibaba’s model in South Asia different from that of other countries?

I think it’s a lot more localised. What we’re doing now is trying to understand how the local sellers work and what services do they need. Because the services here may be different from, for example, the services they need in China and Malaysia where everything is digitised and integrated.

It is the same principle which is mainly about being engaged and having something for everyone and using technology to manage a huge marketplace with a lot of sellers and a lot of customers.

Is the app also localised?

It is. The algorithm, mainly, is. We look at what people are searching for and what do they want to see and we try to give them that experience. We also try doing local campaigns which aren’t happening in other countries. We did Nepali New Year earlier this year and now we are doing one for Dashain which starts on September 15.

Have you achieved the breakeven?

No. Not yet. But we will do that. We plan to be a profitable company by 2022. So far we are still investing in the country. We need to build the infrastructure and we need to have the scale.

Kyamu, when it came to Nepal, advertised on Facebook and Google. That has now changed as you have been advertising in the mainstream media. What brought about this change?

Advertising, in general, has changed since Kyamu was here and we just evolved with it. The manner in which Nepalis interact with media and the internet has also changed. That way we also learned year on year on what was better for our business. As for our advertising strategy, it didn’t change after we rebranded as Daraz or after Alibaba’s acquisition. When we came here with Kyamu, we came in as a startup, but now we are an established business. In general, our strategy is to stay current and relevant which is why we have been working with more influencers than before.

What inspired Daraz University? How have sellers here taken to it?

It was inspired by Taobao University in China started by Alibaba. When we first started working with Alibaba who had a gigantic university in China we wanted to do something similar to give sellers the knowhow to sell. That was the inspiration. After that, we sat down with a blank piece of paper and started to design a curriculum and we started to do it. That way anyone who has a smartphone can start his/her business.

Published on August 28th, Wednesday, 2019 2:21 PM

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