eCommerce in Pakistan needs more time or some good investments which is not coming around to anyone. Big names are still struggling, all stores are selling same products no matter how much big or small company or individuals are sourcing in the back. The online one pound shop, Kaymu.pk has also received a lot of diatribe for its poor customer service and low deals with no value for money.
Here is our analysis of 6 default reasons of disruption that Kaymu failed in Pakistan:
1) Unmanaged Ecommerce Type
There are too many portals but without any particular direction. No legislation or government support. This is alarming. Actually positioning is the key and that’s what Pakistan ecommerce is not well aware of.
2) Kaymu failed due to bad Quality of Products
Apparently the website seems to be working and on 149 position in Pakistan. But it is not enough. They want 15% on every sell. For that either product quality should be too low or else price should be high. Way too poor quality just to beat the price. Such a deal is only good for those who calculate number of items they are getting in a certain price and not the quality of the product.
3) False Advertisements let Kaymu Fail
Sellers would put up stock photos and when the package would be received it would be a different product. Sellers might try to trick them by completing orders and still submitting cancellation requests on site to avoid paying any 15% payment.
4) Unverified Sellers
Kaymu banks zero to 10% authentication of sellers. Free hand to buyers and sellers, no checking or scrutiny etc. Poor customer support even for those who want to sell. Cheap positioning and poor products by these unverified sellers.
5) Customer Experience
Speaking specifically of time management, the seller would give a different time frame from the operator at Kaymu/JumiaCustomer service is restricted to 5% of total buys. Several cancel their orders owning to un-called for delays in delivery. Sellers hook customers in, which drives the traffic and orders therefore the CEO makes his years salary. Mediocre user experience is a massive reason that clustered everything.
6) Low Margins for Kaymu as a Platform
Ali Express was based on an idea that was predicted to be a failure for decade but they executed the idea, kept working and it paid off. Execution is not an issue. It’s an issue with business model comparison with conventional e-commerce. Kaymu works on marketplace model that requires network effect both from supplier and end customers.
How is it different from Daraz.pk and Olx.com.pk?
Kaymu never failed. It was bigger than Daraz in order numbers, almost equal in order value and 1/4th in OPEX. It missed a couple of funding rounds. Hence was acquired by Daraz which was taking flak from massive global investors for not going for the long tail market that Kaymu had. Kaymu charged between 2 and 12% of order value and had an over 75% Valid to Net order ratio. Which, by the way, was higher than Daraz. Even the recoveries were higher and the cost per order was lower. This is flat, on the numbers and in investor slide deck all over. Before answering this question in more detail, we should know success parameter here.
- It could be, as a startup?
- As a business platform for company?
- As an ecommerce or marketplace?
- or failed in delivering idea?
All have different answer. We would say either it Daraz or Kaymu both are not failed ideas. Daraz covered brands from day one till date and now it is first choice for all brands which want to sell online. Kaymu, however, started with small sellers who had something to sell but no platform other than OLX. OLX which had limited ecommerce oriented traffic (at that time) gave place to Kaymu and Daraz. These two also generated lots of traffic with extensive marketing as well. So with Kaymu (former Azmalo) people tasted how to build an online business and most of them become proper businesses with good earnings. So the model is not totally failed at all. Yes, when people compare it with Daraz, it may seem a little less popular.
Perhaps Kaymu and Daraz are operated both under the same group of companies. Kaymu, similarly, focusing primarily on the marketing part, bringing traffic, with not great focus on vendor quality and delivery. For Daraz worked with established brands given their quality and delivery. Kaymu should have been more selective with its vendors, giving much more weightage to quality of order processing rather than raw numbers only. There are two sides to Kaymu’s current situation. As a business service or as an E-Commerce platform, we have seen Kaymu get traction but from a customer service point of view, and as a Service Delivery channel it failed.
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