Consolidation Begins in Dhaka’s eCommerce Space as Daraz and Kaymu Merger Comes into Effect
The old news is Rocket Internet’s much talked about ecommerce marketplace Kaymu has completed its merger with its sister site Daraz, also owned by Rocket Internet. The merger originally took place in July last year, as part of the global restructuring where Kaymu merged its operations with other Rocket venture in several markets including Myanmar and Pakistan.
“We are excited about being one team and one platform and look forward to building the most competitive shopping platform in the country,” said Benjamin de Fouchier, managing director of Daraz Bangladesh told to the Daily Star. “Daraz will still be the home of original, brand new and authentic products and we assure our customers that we will try to meet all their retail requirements followed by a seamless shopping experience”, He added.
Rocket Internet is one of the earliest players in Dhaka’s ecommerce space. The company started its operation with Kaymu. However, the marketplace never took off despite widespread promotion. While initially, it invested heavily in growth at any cost, the company became business conscious from early 2015. In fact, it laid off almost 30% of its staff in July 2015 as part of a strategic shift “to make the business work”. However, it never worked out.
On the hand Daraz, although started late, has been able to create an awareness in the market with its heavy cashback and discount offers and unusual marketing campaigns. Given the situation, the merger sounds a good strategy on the part of Rocket.
There is an overall consensus in the market that ecommerce is growing fast in Bangladesh. However, it does not reflect in number for most companies. This is largely due to the huge number of small and medium players in the market that made it difficult for consolidated growth for many seemingly big players. At the same time, the trust on e-commerce vendors is yet to develop among the common users. Considering the slow pace of growth, the industry will see more consolidations in the near future as well as the closure of the many businesses.