Interview with Ehsan Saya - Managing Director, Daraz Pakistan & Sri Lanka

Personalization is crucial in today’s diverse market, where each customer journey is uniqueEhsan Saya is the Managing Director of Daraz (Pakistan & Sri Lanka), the leading e-commerce marketplace in South Asia (excluding India) under Alibaba International Digital Commerce Group. With over 13 years of diverse experience spanning investment banking, logistics, and e-commerce, he has been instrumental in driving Daraz’s growth and boosting e-commerce adoption in emerging markets.Ehsan also serves as an independent Director for FBR’s Pakistan Revenue Automation (Pvt) Ltd., and as a member of Visa’s Merchant Advisory Council, offering strategic insights. Additionally, he is actively involved in the Champions of Change Coalition, which aims to create diverse and equal work environments.Prior to joining Daraz, Ehsan co-founded JoeyCo, a logistics start-up in Canada. His financial acumen was honed through investment banking roles at BMO Capital Markets and Origin Merchant Partners, where he facilitated numerous high-profile mergers/acquisitions.Ehsan is an alumnus of the Richard Ivey School of Business, University of Western Ontario, holding an Honours degree in Business Administration.Following are the edited excerpts of a recent conversation BR Research had with him:BR Research: Daraz has made a notable impact on the Pakistani e-commerce sector. Could you share your thoughts on which areas of the Pakistani market remain untapped and how Daraz plans to penetrate these segments?Ehsan Saya: Since its launch in 2015, Daraz has been focused on developing an end-to-end infrastructure for a marketplace which includes investing significantly in various aspects such as logistics (Daraz Express) and payment solutions to help us maintain better control over the customer experience and expand our coverage nationwide. Despite our progress so far, e-commerce still makes up a little over 2 percent of the total retail sector in the country. This indicates that there is significant untapped potential compared to similar regional markets. To leverage these opportunities, Daraz’s next phase of growth will focus on improving technology and product development to enhance supply chain and assortment management, payment solutions, and customer experience. With 79 percent of Pakistan’s population under 40, the country has the largest youth population globally. This digitally native generation values convenience. For e-commerce to grow in a country like Pakistan, it is essential to not only offer customers high-quality products, but also provide them at competitive prices to encourage them to shift to online shopping from offline.BRR: What role does Daraz envision for itself in improving and supporting the retail ecosystem in Pakistan?ES: Daraz enhances Pakistan’s retail ecosystem by providing offline stores a platform to expand their reach, creating an ecosystem where customers can access and purchase products from sellers across the country. Our Marketplace offers consumers a wider range of options and benefits SMEs. For example, we have numerous sellers from iconic local bazaars like Zainab Market, Liberty Market, Gul Plaza, and Qissa Khwani Bazaar, who have seen significant sales growth, particularly among second-generation, digitally savvy owners. This allows consumers to buy products from shops they cannot visit directly due to their geographical location. Additionally, Daraz offers aspiring entrepreneurs a platform to start a business with minimal upfront investment, as opening a physical store is not feasible for everyone.On the other hand, through Daraz Mall major brands such as L’Oreal, Maybelline, Garnier, Pond’s, Dettol, Dawlance, Levi’s and Stylo use our platform to boost their online presence. Building your own e-commerce presence from scratch requires substantial investment and resources, but we have the largest user base in the country and an end-to-end logistics infrastructure. This provides an efficient solution in this capital-intensive industry that helps them achieve incremental growth.BRR: What strategies is Daraz implementing to encourage e-commerce adoption among consumers who traditionally prefer brick-and-mortar stores?ES: The key to boosting e-commerce adoption among traditional shoppers in Pakistan lies in building customer trust, ensuring depth of assortment, and offering exceptional pricing. Three fundamental principles guide us: ensuring the best delivery experience, the best return and refund process, and consistently offering the best prices. To achieve this, it is essential to have impeccable coordination across all departments, including Commercial, Operations, and Customer Experience. We believe that by consistently excelling in these three areas, we can retain our existing customers and build their confidence in expanding their online shopping activities. This strategy will also be critical in attracting new customers and driving a broader shift towards e-commerce in the market.BRR: Considering the current economic challenges, including rising inflation, what specific measures and strategies are Daraz implementing to maintain its competitiveness and affordability for customers? How does the company ensure it continues to offer value while navigating these changes?ES: The rising inflation has noticeably influenced consumer behaviour, particularly in categories such as groceries and fashion, leading to increased price sensitivity. Daraz is leveraging its extensive ecosystem of brands, sellers, payment and logistics partners to address these challenges to maintain its competitiveness and affordability.We collaborate closely with our sellers, ensuring they offer the most competitive prices by investing in an end-to-end supply chain. Additionally, we have closely studied shifting customer demands and increased the frequency of our double-digit sales events which previously used to be limited to 11.11 and 12.12. This strategic approach helps us build strong brand recall, as customers now know exactly when each month; they can turn to Daraz for spectacular deals.For instance, we have observed a spike in bulk buying of daily essentials at the beginning of the month, especially when bank discounts are available. In response, we introduced a ‘Payday Sale’ every month to help customers navigate the best offerings. In response to the high demand for free shipping, we have made most products on our platform eligible for it through bundle offers such as ‘Buy More, Save More,’ which benefits our customers while also improving the efficiency of our logistics operations. We have also begun partnering directly with local manufacturers to eliminate middlemen and secure the best prices for our customers.BRR: How is Daraz leveraging advanced technologies such as AI, machine learning, and big data to enhance its services and improve customer experience?ES: At Daraz, being customer-centric and data-first means that our investments in advanced technologies are always aimed at enhancing our services and improving the customer experience. Leveraging our parent company’s position as a leading technology innovator, we have access to cutting-edge technologies that we introduce as industry firsts in our market.We apply these technologies across various aspects of our operations, including product recommendations, customer service, fraud detection, and inventory management. These innovations simplify complex tasks, allowing us to scale our business efficiently while ensuring a superior customer experience.Recently, we revamped our app to offer more personalized experiences for each customer, which has driven higher conversion rates. Personalization is crucial in today’s diverse market, where each customer journey is unique. Factors like age, gender, income, industry, and location influence customer preferences, and with over 20 million products across numerous categories, we continuously optimize our platform to present the best options tailored to individual needs.Our Seller Center which our marketplace sellers use to manage and scale their businesses has also introduced enhanced features, such as better UI and further guidance for new sellers, access to more granular data to allow them to be better informed to cater to customer demand, automated responses with product recommendations and real-time chat agent monitoring. Our multi-language model has enabled over 240,000 Daraz sellers to translate over 6 million products from English to local languages across our markets, further improving accessibility and the overall shopping experience.BRR: How does Daraz support the growth and development of its sellers, particularly new and small businesses, to ensure they can thrive on the platform and meet customer demands?ES: We firmly believe that the backbone of our platform is our sellers, which is why it is a critical business priority for us to enable them and allow them to build the skills they need to provide the best possible service to their customers. For sellers, we have various initiatives such as our fully virtual and free-of-cost Daraz University to help them learn different aspects of online selling from anywhere in the country. We also have a dedicated Seller Engagement team that offers personalized guidance to help sellers navigate challenges. We foster a community by organizing events and forums for sellers to connect and share experiences. Incentives and rewards, including bonuses and recognition programs, motivate sellers to excel.BRR: Having led the largest e-commerce platform in the country for over five years now, what is your outlook towards the prospects in Pakistan especially for the youth?ES: At Daraz, I have had the privilege of witnessing firsthand the incredible potential of Pakistan’s youth. Our employees exemplify the intelligence, resilience, and hard work that define this generation. Thriving in a fast-paced environment like ours requires adaptability, and time and again, our team has risen to the challenge. Beyond our workforce, I regularly engage with our young sellers who are achieving remarkable milestones and creating new opportunities for themselves. The power of technology lies in its ability to democratize opportunities, and we are already seeing countless success stories emerge across the country. These experiences fill me with optimism for Pakistan’s future, which I believe will be digital and driven by the brilliance of our youth.