Ajkerdeal Debuts A New App, Ajkerdeal’s Strategy and Why Ajkerdeal Is The Most Important eCommerce Company In Dhaka
Ajkerdeal has introduced a new version of its app store app with a bunch of new updates and features today. The leading ecommerce company has been talking about a mobile-first strategy for a while now and it finally manages to get there. (Disclosure: Ajkerdeal is one of our native advertising partners but it does not influence our editorial process.)
The new app has several exciting features and updates including a voice search feature, albeit using Google API, a social feed, and a spin the wheel game. These new features are expected to improve app engagement. More on new features that deserve attention in a moment.
Before that a little background on Ajkerdeal and how its new app fits into its overall strategy and long-term ambition. From my Interview with Ajkerdeal CEO Fahim Mashroor a year ago:
“We started AjkerDeal at the end of 2011. At that time, the Groupon model was very popular around the world. We thought of doing something similar in Bangladesh. We primarily designed it as a daily deal site.
But within a year we realized that deals follow a different pattern in Bangladesh and it’s hard to manage enough transaction to succeed in deals model. So, we shifted our focus from deals to the marketplace.”
He then offers a justification for Ajkerdeal’s pivot to marketplace model which is interesting at the very least:
“We realized that the inventory-led model has a few drawbacks, especially, it requires huge investments in logistics and warehousing. So, we decided to opt out for a mercantile model where the products will be distributed largely by the merchants.
However, we will take care of special cases where merchants are unable to do delivery.
We have observed that in many cases merchants deliver faster than us. If we had chosen the other way around, we would have to collect the products from the merchants. Two things would happen then: we would have to bear the logistics cost of collecting from merchants and then again delivering to the end customer.”
This opens up the question of controlling the customer experience. More on that in a moment.
New app, aggregator and Ajkerdeal’s Surprises
As I noted above, Ajkerdeal has been talking about a mobile-first approach for a long time. I think this is relevant and an important long-term strategy.
Mobile is the ultimate platform. More so for a country like Bangladesh where mobile penetration is way higher than laptop or desktop penetration. Moreover, time spent on mobile is way higher than any other platform out there.
From Inside Ajkerdeal’s Big Plan To Take e-Commerce Beyond Dhaka on why mobile is important for Ajkerdeal:
“Finally, AjkerDeal makes it clear that it wants to become the Taobao of Bangladesh. The company aims to be the platform for businesses, merchants it calls, to allow them to use the platform to reach out to customers and sell their products.
It is now investing heavily in its mobile app in order to secure a leading position in ongoing mobile user surge, spending in digital platforms including Facebook to local popular sites to acquire more customers.
While acquiring new merchants and adding more products to its platform remains a key metric for the platform, Fahim also understands the challenge of ensuring enough sales for the merchants, so that they use the platform more seriously and it makes sense for them.”
Having said that, while mobile offers an unprecedented opportunity, it is incredibly difficult to make anything work on the mobile platform.
One of the reasons is, of course, the real estate is limited on mobile. You can’t have an unlimited number of apps even if you want to.
At the same time, a user can’t afford to use all the app that he/she does need or want to use on a daily basis which means a mobile-first strategy will be effective only if you understand the reality of mobile platform.
In simple, making sure that your app meets a fundamental need of your users and that it engages users are two important prerequisites for success on mobile.
Now look at a few features that Ajkerdeal has introduced in its updated app:
- Voice search – this is quite fascinating because no other eCommerce thought of taking the opportunity Google has brought to them for free. Voice, many experts suggest, is going to be the next big platform. It makes sense if you look at the number of people who don’t know how to type and the number of people who don’t want to type like me. With the new app, you can search product through voice both in Bengali and English. This is on the usability side of the app which will improve engagement. I would give 10 out of 10 for this.
- Spin the wheel – it has added a game titled ‘spin the wheel’ which one user can play for 03 times a day and win discounts, cash back, and other perks. The company is already in talks with a number of partners including ride-hailing companies to offer perks to winners. Again 10 out of 10 for engagement.
- Social feed – most important feature so far, where a user can follow other users and merchants and see their offers, activities and share their preferences as well. Given the reality that we are more into social in Dhaka than reviews, this will significantly improve engagement.
I’m quite intrigued to see how far head Ajkerdeal has thought than any other players in the market. The real challenge, however, that I see for the company is making sure that people get the app and it is truly user-friendly.
What makes Ajkerdeal really different
Apart from above points, in one word, understanding, and consistency of strategy. Since its pivot from earlier deal platform to a marketplace model, the company has been dogged about what it wanted to be: Taobao of Bangladesh.
The company has deliberately focused on empowering small businesses from all parts of the country. Emphasized on reaching out to customers outside Dhaka and enabling merchants in various ways.
It is true that it has recently started reaching out to big names brands like Bata and others, however, it has largely remained focused on serving smaller businesses.
This is a distinct strategy and it is important to understand the consequences of this particular strategy in the long run.
I suspect, albeit from my limited understanding, the majority of Dhaka’s eCommerce companies are operating out of a mixed-model where it works with big brands, some small merchants and manages the delivery itself, and in some cases manage the inventory, in order to control the customer experience.
Despite that, it is a tall order to control customer experience in Bangladesh because it is not only an execution challenge, it is also an infrastructure challenge. This quote from Grameenphone To Launch New eCommerce Marketplace Shoparu, Grameenphone’s eCommerce Ambition, Grameenphone’s Advantages and Challenges makes perfect sense to put things in perspective:
“GP shuttered its much-hyped eCommerce marketplace Kidorkar.com, that too in August this year, citing reasons related to its limited ability to control the customer experience. Here is from Talat Kamal, head of external communications at Grameenphone, from a statement sent out during that time: “as we do not have much control over quality with such partner-dependent platforms as Ki Dorkar, the promotion and operations of the platform have therefore been discontinued,”.
Keep this in mind as we move forward.
In reality, every marketplace is an aggregator of some sort. Some are pure aggregators, for instance, Facebook and others are with some limitations. Which means Ajkerdeal and many other marketplaces that operate in Dhaka are aggregators of some sort.
Now the internet is a distinct medium and dynamics are different on the internet. As an aggregator, Ajkerdeal is essentially a two-sided inter-dependent marketplace which means one side affects the other side.
Let me give you an example, as a merchant I will join the aggregator that brings me more businesses. Similarly, as a user, I will certainly use the aggregator that offers me the largest number of options or varieties. Meaning, if I have a large merchants base, the likely reality is that I will be able to attract a large number of end-users as well because ultimately customers will go to the platform that offers maximum variety and vice versa.
Now when you reach a critical mass of merchants which allows you to attract a large number of customers, it makes it easy for you to attract more merchants from that point onward making the competition hard for other players. In fact, once you ensure sales, it is easier to attract any merchant, be it a big brand or a small seller.
This distinction is important to understand for any marketplace aggregator in order to succeed.
I suspect very few ecommerce players in Dhaka understands this dynamics and I also suspect, albeit observing Ajkerdeal for a long time, Ajkerdeal understands it better than any other players in the market. Why do I think so, here are some pointers:
- Ajkerdeal has been extremely focused about the type of merchants it attracts, small sellers from across the country, except for a few exceptions in the recent times which I think the company don’t need to pursue at this point of time
- It has a robust merchants engagement programs distinct from many others. If you look at Ajkerdeal’s activities, it always puts merchants at the center of it. In fact, it offers better support to merchants than many other platforms.
“We have been working with Ajkerdeal for around 2 years now. So far, it has been a good experience. One of the best things about Ajkerdeal is their merchant panel which is much smarter than many other marketplaces.
Moreover, it allows merchants to exercise greater control over how they run their business on the platform along with greater access to the merchant panel. We can update the panel and maintain a rather seamless customer experience while also gathering better intelligence about our customers.
We also like their policy and procedure when it comes to dealing with the merchants. We sell a fairly good amount of products through Ajkerdeal. It should be between 15% to 20% of our monthly sales.”
This is an important point to note if you understand the aggregator theory because if you don’t have anything to sell why should buyers bother to come to you. And Ajkerdeal has been playing on this for a while now and it seems the company is getting somewhere.
Almost all the ecommerce companies receive orders from outside Dhaka, more or less. The difference, however, is how you view outside Dhaka market and how you approach it. Again from Inside Ajkerdeal’s Big Plan To Take e-Commerce Beyond Dhaka (data from December 2016):
“Ajkerdeal, one of the leading e-commerce marketplaces in the country, has big plans to take e-commerce to the remote parts of the country. It has already started to deploy agents in different parts of the country who will sell products from its platform on its behalf in exchange for a small cut of the commission it gets from the merchants. The company has also inked a partnership with at least two companies who have an active distribution network or agents in different remote parts of the country.
At present, the marketplace has agents in 12 districts who visit local shops with a tab and get wholesale orders from these sellers. Since these shops don’t have access to Dhaka market, they can easily buy from Ajkerdeal platform instead of coming to Dhaka, said Fahim Mashroor, CEO of the company.
It has partnered with PayWell, the payment and service aggregation company, which has around 2500 agents across the country. The company is also working with iSocial, a spinoff of Dnet, in order to use its infolady entrepreneurs as its agents.
“70% of our orders come from outside of Dhaka,” says Fahim Mashroor. “the market outside is way bigger than Dhaka. Most importantly, e-commerce is an important utility for people living outside Dhaka who don’t have access to shops, and essential products that are only available in Dhaka or metros. Now with the power of e-commerce, they can also enjoy the benefits of access to a rich and important collection of products saving time and money.”
“We have always wanted to be the marketplace for the masses. That is why we use Bangla as the language on our website. We focus on localization- local language and local context. We want to be an everything-destination for online shopping in Bangladesh.
We are not a mall; we are a market. We want to be a place where people can buy both high and low-end products. We want to be the ‘New Market’ of the internet in Bangladesh.”
The challenge for Ajkerdeal, however, remains the same, is customer experience – ensuring superior customer experience while being a marketplace. This is critical because being a marketplace it does not have complete control on the entire customer experience process.
I asked Mr. Mashroor in my interview: “Don’t you think there are risks to this model as well? When people buy a product from AjkerDeal, they are supposed to consider it a product/service of AjkerDeal and likewise credit or discredit the platform for the good or bad quality of the product, while in reality, it is merchants who should be blamed?” and his response was ideal but I think it does not solve the problem for the company:
“We inform the customer beforehand that merchants will be delivering the products and we also tell them that we will be liable for any sort of issues, such as- products replacement or performance.
Payment is a significant problem here. Payments are mostly made through Cash-on-delivery method. It gives customer extra power where a customer can check the product themselves before paying for it. From that perspective, customers don’t have much risk.
Even if a customer makes an advance payment, they are making it to us. So, if an issue arises with the product, we can always refund the money. We are taking the responsibility on behalf of the merchants.”
Theoretically, this should solve the problem but it does not and Ajkerdeal has already learned that where the company had to deal with major complaint issues including PR challenges.
I think the company should invest more into ensuring better customer experience otherwise it will have to suffer its consequences.
Having said that, for now at least, I eagerly look forward to seeing how Ajkerdeal’s new app fare in the near future.
Update on December 9: Cover image has been updated with a more recent image of Mr. Mashroor.