Daranz, an Alibaba-owned Company, is Preparing to take on Amazon

Daranz, an Alibaba-owned company, is preparing to take on Amazon
Daranz, an Alibaba-owned company, is preparing to take on Amazon/courtesy of Facebook

Daraz, Pakistan’s largest e-commerce retail platform, aims to host 300,000 small to medium enterprises (SMEs) in the next two years, according to its CEO, as the company seeks to strengthen its position in the domestic market in the face of potential competition from global giant Amazon.

E-commerce growth in the 220 million-strong country has yet to fully take off, unlike in neighboring India, where the market is dominated by retail behemoths like Amazon and Walmart, as well as large local platforms run by India’s Reliance and Tata groups.

Daraz, a Pakistani startup that was acquired by Chinese giant Alibaba in 2018, has 100,000 SMEs on its platform.

“Within the next two years, we want to have 300,000 active and educated SMEs selling on our platform, which will essentially create a million jobs,” CEO Bjarke Mikkelsen told Reuters in an interview on Wednesday.

Pakistan’s rapidly growing middle class, over 60% youth population, and over 100 million broadband subscribers make it a lucrative market for e-commerce platforms.

Amazon announced earlier this year that Pakistani entrepreneurs will be able to sell their products on its platform.

Mikkelsen met with Prime Minister Imran Khan and his finance and investment teams before the interview to discuss coordination on free zones where tech companies would receive special incentives to thrive, as well as an e-commerce university that Khan said Pakistan would open.

Daraz employs 10,000 people in four other South Asian countries: Sri Lanka, Bangladesh, Nepal, and Myanmar, and has access to 500 million customers. Over the last two years, it has invested $100 million in Pakistan and Bangladesh, according to Mikkelsen.

He said the company is aiming for nearly $1 billion in sales this year through its platform, which has seen 100 percent year-over-year order growth in the last four years.

According to data from the commerce ministry, the e-commerce sector in Pakistan grew by over 35% in the first quarter of2021, to 96 billion Pakistani rupees ($548.89 million), up from 71 billion in the same period last year.

Pakistan accounted for 35 million of the 70 million users who visited the Daraz website last month. According to Mikkelsen, more people in Pakistan are now willing to use digital services.

He went on to say that e-commerce accounts for only 2% of the retail market in the South Asian countries where Daraz operates, but that it could be scaled up 10 to 20 times.


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