Mr Dawood is the author of the first ever Pakistan Start-up Report which was published in 2014. He also used to run a weekly Newsletter, Tech Week in Pakistan, besides being the Pakistan representative of the renowned tech blog: Tech in Asia. The last time BR Research met with Kaymu's team, its history, organisational structure, and competition came under discussion. This time when BR Research team met Dawood a couple of weeks ago in Lahore, the topics of discussion encircled around progress, operations and business model. In his current role as the Country Manager at Kaymu.pk, his goal is to expand Pakistan's e-commerce industry by bringing traditional offline sellers to online shopping platforms. Below are some edited excerpts from that sit-down:
BR Research: Tell us about the recent performance of Kaymu?
Adam Dawood: Kaymu has been in business for the last two and a half years, and I joined Kaymu in August 2014. At that time we had our head office in Lahore. Just then we made a strategic decision to create a seller-management office in Karachi, and now we are running two offices in parallel. Our customer and the seller facing sides along with our regional teams are based in Lahore, while out sell management side is in Karachi.
How would I describe Kaymu's operations and progress post the broadband expansion? Well, I would say that since the rollout of 3G and 4G, there has been a big change. We have launched our App for Android, IOS and BlackBerry, and the App downloads and the numbers of orders we are getting through this App is fairly significant and contributing to the margins of our business. In terms of 3G/4G, it is mind boggling as to how fast things are progressing. For e-commerce, it's turning into a game changer; online shopping has become much easier, and smart phones have become affordable.
BRR: What is Kaymu's business model, and how do you take care of after sale service as it is a key issue in online/ecommerce businesses?
AD: We always put our customers first. At Kaymu, unlike other e-commerce websites, we technically don't sell anything; our sellers use our platform to get in touch with the buyers, and they co-ordinate between themselves. Our differentiating point is that at Kaymu, we ensure the transaction, monitor it, and make it as much as at arm's length as possible.
At the end of the day, our goal is to take care of the customers. A perfect scenario of an order is that a customer comes in, places an order for whatever item with an XYZ seller. It's our Customer Support (CS) team's job to do a thorough verification through our internal processes. The seller then gets in touch with the buyer, and they co-ordinate. The prices and terms of the transaction are fixed, so they cannot be changed. The seller then dispatches the order directly to the buyer's location. Our average delivery time as of now is just under four days, which for an ecommerce business where we don't control the seller is pretty good. It is a perfect transaction when the buyer receives the goods, he's satisfies and rates the seller of the website.
The other scenario is when the transaction is not perfect: the buyer receives the order and he is not happy with it. We always call the buyer after the delivery for feedback. If the buyer is giving a bad rating, we are very proactive as we ask the permission to immediately lodge a complaint. We log each of the complaints, and we gauge these complaints weekly. We have very strict criteria and the sellers have to meet our benchmarks. The number of complaints against a seller, as well as the type of complaints both matter. And in case these benchmarks are not met, we remove the sellers off our platform. This is how our business model is built to tackle challenges like aftersales service. I would not hesitate to share that every week we kick off hundreds of sellers from our website.
BRR: What is the difference between Daraz.pk and Kaymu.pk? Is there any sort of cannibalisation because of the two similar marketplaces?
AD: Daraz is a marketplace for big brands. Kaymu on the other hand is a marketplace community for sellers. Also, our markets are slightly different as well. Who can sell at Kaymu.pk? We have everyone. Anyone can sell at Kaymu.pk. It can be a retailer, wholesaler, a manufacturer, or an importer. Daraz.pk, which is our sister concern, is also a seller on Kaymu.pk. There are other e-commerce ventures as well that sell on Kaymu.pk. The chances of cannibalisation lessen due to the element of differentiation. Daraz.pk is controlling the customer experiences much more, and it is pricey. Since we have so many sellers on our platform, our prices are much lower due to the competition. Kaymu might not provide a huge margin at the onset; it provides volumes.
BRR: Then how is Kaymu different from OLX?
AD: OLX is a pure classified. OLX has a very different strategy for Pakistan. They came with millions of rupees to take the classified space. Their income depends on circulation, and that is why they are into heavy marketing. Whereas our marketing budget is limited
Also, anyone can go and list on OLX. The same happens on Kaymu.pk. However, there are a few distinctions. First, your listings are acceptable on OLX if you are following the basic guidelines, whereas on Kaymu, the first time you upload a listing following the basic principles, our seller management team calls you and confirms your identity, product, availability status. In short, our due diligence is much stronger.
Another major difference between us and OLX is on the operational side: we assist the sellers, and help them dispatch. We facilitate the sellers in that for the first few orders, we inform the sellers that they have received the order. We then help them with dispatching and logistics. Where on OLX the buyers have to meet the seller on their own, or pay them first before you receive the order, Kaymu gets involved in the transaction.
BRR: What's Kaymu's revenue model?
AD: We charge commission from the sellers. The commission rate ranges anywhere from two to 12 percent: two percent on mobile phones, and 12 percent on clothing lines and a few other items. Thant's the standard. Keeping the buyers and sellers from bypassing Kaymu's platform is part of the education cycle that we are working on. What keeps the sellers and the buyers from bypassing Kaymu's platform is the protection we offer both. One, the seller's details are only shared at the very end when the purchase is done. Secondly, the buyers are protected in case something goes wrong in the transaction. In the same essence, the Kaymu umbrella is also supportive of the sellers as they are getting a lot of business from us.
BRR: So what's the next step Kaymu's trying to take in e-commerce business?
AD: One of the things we are really pushing hard for is prepayments, so that we act as an escrow for our buyers- similar to how PayPal works holds the money is escrow for eBay. This will help us greatly in the post-sale services to the buyers as the seller will be confident that the money has been deposited, and the buyer is confident that if is not satisfied with the product he can get the money back. We plan to bring similar efficiency to the online marketplace, and we are looking at multiple options right now. It's a very crucial step; in the end, it would be someone who is flexible enough to can easily integrate with all our systems. Here, I would like to mention that the customer experience will be the top priority.
Why I am bullish on the impact that we can make by bringing in the prepayment system compared to others players is that we have been pushing the buyer education from the very beginning. Right now Kaymu works on 100 percent Cash-on-Delivery (COD) mode. But once the system is all set and seamless, we want to educate our buyers that rather than running on COD, they can get better deals on Kaymu through the prepayment model as we provide them the guarantee that they can get their money back in case they are not satisfied.
From the seller-side, this is a huge responsibility for the seller as well as motivation to dispatch the right product; otherwise he will lose the shipping cost as the sellers bear the shipping charges.
BRR: Where is Kaymu present?
AD: We are present all over the country. We sign up suppliers and do deliveries all over Pakistan. Karachi has the largest sellers, but we have huge number of sellers in places like Sialkot, Gujranwala, Hyderabad, Quetta, Peshawar, Lahore, and Islamabad. We register our sellers in major cities with a logistics company that can come, pick up the order and dispatch on the sellers behalf. Obviously there's a cost attached to it. If the sellers are in smaller cities, or they do not want to pay the pickup cost to the logistics company, we ask them to pack the order and deliver it to one of our drop-off centres, who then deliver the parcel through our partnership with three logistics companies. Here too, we provide assistance to the sellers for packing the order through our logistics helpers. Kaymu tracks the order, and once we receive the money, we transfer it the seller's bank account in the next 15 days from delivery.
In terms of sellers, we have over 50,000 sellers on our platform as of now, and of those one third is active every month. In terms of listings, we have over 250,000 products listed on the website. Our average daily orders are over 3000. Every product has an expiry date as well as we do not leave any product on our website beyond a certain time period. We keep our website updated.