INTERVIEW
Daraz juggles assortment and delivery speed
It won’t dive into quick commerce at the expense of its merchandise mix.
Q
uick commerce, or item delivery as fast as 10 minutes, is on the rise but one e-commerce platform is taking a different approach to the trend. Daraz Group Founder and CEO Bjarke Mikkelsen vowed that Daraz will not sacrifice having a wide assortment of products, which is a crucial factor for online shoppers. It will, instead, strike a balance between assortment and delivery speed–even if not as fast as within an hour but still within the day. In an exclusive interview with Retail Asia, he discussed what is in store for the e-commerce platform in 2022, a year focused on integrating business models and features that will address the customers’ needs. How has Daraz performed in 2021? What were the factors that contributed to these results? 2021 was a very good year for us. We saw tremendous growth in our user numbers. We now have about 40 million active users across our platforms and the internet population in our four markets is about 100 million. Almost 40% of the internet population in our markets is now using Daraz on a monthly basis. The key driver of this is COVID which has accelerated the shift toward digital services. Do you expect the same performance this year, and what do you think will be the drivers for this? We're very optimistic. First of all, e-commerce is still a very small proportion of the retail market in our countries. Regardless of COVID, we still have a lot of growth opportunities. We will ensure that e-commerce becomes much more integrated, and we start building frequency and high engagement with all of these users. As I mentioned, in 2021, we reached 40 million users across our platforms whilst growing orders by 100% year-on-year. In 2022, we expect a reduced pace of growth as we focus on strengthening customer experience. Amongst your foreign markets, which country is the biggest market and which countries in Southeast Asia do you see an increase in consumers or penetration? We operate in four markets primarily. Pakistan and Bangladesh are the two biggest markets from a population and from an economic perspective. These two markets are almost the same in terms of business size. We also have Sri Lanka and Nepal, and both are performing really well. They're also significant in terms of population, particularly Sri Lanka which has a higher gross domestic product per capita. It's a country where we see a tremendous opportunity. In all of our countries, we see the potential for growth over the next five to 10 years as a fantastic opportunity. Particularly now, in many countries that we're heading into, there is a 30
RETAIL ASIA
Daraz will not sacrifice having a wide assortment of products, which is a crucial factor for online shoppers (Photo: Bjarke Mikkelsen, CEO, Daraz)
tough macro situation where inflation is rising, and we'll probably see some currency depreciation, which we expect in some of our markets, this is an opportunity for Daraz also to help the countries navigate through this macro uncertainty because e-commerce can make sure that there's an equal service for everyone in the country and that everyone has access to products at the best possible prices.
In many countries that we're heading into, there is a tough macro situation where inflation is rising
What consumer trends have you observed last year and what are the emerging trends amongst shoppers this year? First and foremost, live streaming is something that we're seeing taking off in our countries and where we are investing a lot of our time and also tech resources in terms of developing digital content. For example, we started Streaming Cricket, which has had tremendous success and adoption in our countries through our platform. It is also the way that sellers can interact with consumers because, in our countries, the biggest factor for growth is building trust with the consumers. Most of the time, if the consumer can actually see the product in the live environment with the seller actually displaying it in his store, this is something that can help build trust. It is definitely one trend that I think will only accelerate, and we'll see a lot of that in 2022. The second that I would pick that was big in the last year is quick commerce. A lot of companies started doing these
