Ehsan Saya, a former investment banker, is the Managing Director of Daraz Pakistan. Saya returned from Canada in 2018 to work for the biggest e-commerce platform. He had also created JoeyCo, a transportation and logistics company, in Toronto. Daraz’s Head of Seller Marketplace is Mohammad Hasan Osama. Mohammad Hasan Osama, the Head of Marketplace at Daraz, has a distinctive reputation for leading growth operations in the tech start-up and e-commerce market in Pakistan before joining Daraz. Hasan Osama served numerous roles at Careem before joining Daraz; he also directed category operations for six countries at Kaymu and was a member of the core team that created Tripda.

The last time BR Research met with Ehsan Saya, the topic of customer value was discussed. The topic of discussion between the two this time was Daraz’s second important priority area for 2021: sellers. The following are excerpts from the book that have been edited:

BR Research: Daraz has made some new promises to its sellers. Before coming to what these promises are, do you think offline sellers have generally started selling online since Covid – or are they still reluctant?

Ehsan Saya (ES): First and foremost, COVID aided many merchants in making the move to online selling, as it was extremely difficult for them to sell when the markets were closed, and traffic had decreased dramatically last year. There were other ways to sell besides Daraz, such as vendors posting their WhatsApp contacts and collecting orders over the phone.

There was obviously a shift to selling online. Fortunately, our markets did not remain closed for an extended period of time, and as a result, many sellers did not have to be online for an extended period of time. Small and medium-sized businesses, in particular, are wary about selling online. When will I get my money, and how will I learn how to acquire it?

So, when we talk about seller commitments, one of them is making it simple for them to sell online. We feel it is our job to ensure that they are assisted and that their experience on our platform is improved. One of the promises we’re making to sellers this year is that we’ll pay them in half the time, which is a clear indication that we’re serious about improving our sellers’ experience so that they can mature online and sell more effectively.

Mohammad Hasan Osama (MHO): Anyone who has been selling offline and now wants to switch to online selling faces two challenges: logistics and technology. Daraz supports sellers in two ways: by providing a logistics solution in which we handle their full end-to-end operations; and by providing them with a market on the platform where they already have a large number of customers coming in on a regular basis.

BRR: How many new sellers have registered on Daraz since last June, and what categories have they signed up for?

MHO: Since June 2020, around 223,000 people have expressed an interest in working at Daraz. Around 53,000 merchants have finished their registration and are currently selling on Daraz. In terms of a year-over-year comparison for Daraz, the figures have skyrocketed, and it’s clear that COVID has sped up the process. The growth in the category has been very evenly distributed across all clusters.

BRR: Could you explain the process of seller onboarding at Daraz?

MHO: On Daraz, selling is fairly straightforward. All you need is a valid CNIC or, if you’re a registered business, a business account and financial information. Sellers create an account using their email and phone number, enter their credentials, and begin selling online. This entire procedure is being redesigned to make it even faster and easier. On the backend, we ensure that the quality of the products they post meets Daraz’s standards.

BRR: A key issue from customer point of view of having so many sellers online is about finding the genuine and credible sellers. Daraz is offering ‘carrot’ to the sellers; but what kind of ‘stick’ measure do you take – or plan to take to ensure the authenticity and credibility of the sellers on your platform?

ES: Daraz’s two key battlegrounds this year are customer experience and seller experience. Despite the fact that we make it simple to sign up, we put sellers through a rigorous process before they can begin selling to ensure that we are obtaining appropriate quality merchants. We make certain that when they complete Daraz University, they understand exactly what titles, descriptions, and pictures they need to post for their products on the platform; how they should package the products once they have been sold; how they should respond to customer inquiries; and how they should work to improve and increase their reviews.

We penalise merchants who sell a bogus goods with a Rs500 fine. We also check at the return rate of the sellers, and if it surpasses 2%, we remove them from the site temporarily and re-enroll them in Daraz University. If this happens again after these sellers have been granted access to the marketplace, they will be permanently removed.

On a weekly basis, we evaluate the sellers’ performance against numerous KPIs, and based on the score card, we determine if a particular seller should begin selling more, less, or be delisted permanently. We not only do this on a seller-by-seller basis; we also look at individual products to determine which ones have low ratings, which is why we encourage our customers to provide reviews.

We’ve also introduced a Virtual Refund programme, where if a consumer purchases something for less than Rs750 and wants to return it, we’ll refund the money and let them keep the product. When you’re delivering millions of packages, that’s a large commitment to make. We also make returns and refunds easy by coming to your home in Karachi, Lahore, and Islamabad to take up the items and refund the money.

BRR: Seller’s must also have complaints against customers in an online marketplace. What are these complaints and how is Daraz addressing these issues for the sellers?

ES: Vendors are the internet platform’s backbone, just as we owe it to our consumers. We begin by looking at the numbers, such as a high number of fake returns or fake rejections. We begin banning and preventing such customers from ordering from Daraz. To aid us in identifying such consumers, we have outstanding technology that analyses their login, device id, and other personal information.

MHO: We also have a quality control department that investigates why a particular product is returned. If the seller is still unhappy with the ruling, he has the option to make a claim. This is the foundation of the seller promises to which we are committed.

BRR: So, for a typical seller on Daraz, what are the key challenges that they face while selling online?

ES: Because Pakistan is an import-dependent country, the first priority is cash flow and supply. Many of our sellers ran out of materials during COVID, which made things difficult for them. And because Pakistan’s cost of capital is very high, it’s tough for someone to sell something and wait a long time to be paid because that’s the money they use to recycle and buy more. When we say we’re going from 14 to 7 days to pay our sellers, this is primarily the problem we’re trying to fix for them.

MHO: Another aspect of selling on a platform that is tough for sellers to grasp is the data side of things, such as what is selling and what isn’t, or how to make a product sell more. So, throughout the course of the coming year, we’ll be assisting sellers in identifying what gaps they need to solve in order to expand on Daraz. On the platform, we also have tools like business advisory that can help sellers figure out what’s selling, what’s out of stock, how to go about restocking them, how many customers are visiting their stores, what products have the highest sales conversion, and what price points are selling the most, and so on. This makes price adjustment decisions much more difficult.

BRR: So, what are you offering sellers in the coming year to make it easier for them to stay and sell on Daraz?

ES: Daraz’ ecosystem revolves around sellers, and in 2021, we’ll focus our efforts on making it easier to sell and develop your business on Daraz. These initiatives are motivated by the realisation that small and medium-sized businesses are critical to our economy’s success.

First, by reducing the payment cycle from 14 to 7 days, we will pay the vendors twice as quickly. We recognise that our sellers’ ability to maintain a healthy working capital is critical, and we hope that this endeavour will assist you in better managing cash flows.

Second, during business hours, we will strive to react to seller inquiries on live chat within 30 seconds. We intend to meet this goal in the next months, ensuring immediate assistance.

Third, if a seller’s products aren’t selling as planned, we’ll offer tailored assistance to help the seller pinpoint the problem areas.

Finally, we’ll simplify the claims procedure for sellers, making it much easier and faster for them to file claims.

We will more than double the number of sellers producing more than $1,000 per month by the end of the year thanks to these initiatives and continuous investments to increase page views from our rapidly growing user base.