Rokomari’s Expansion Strategy
Rokomari was founded in 2012 with about 10,000 books on its platform, a handful of publishers, and a small team. Over the past 8 years, the company has grown meaningfully. Today, it is a team of over 150 people, has over 200,000 books on its platform and thousands of publishers. The company does more than a thousand orders per day. It has introduced a long list of interesting features and used ingenious strategies to achieve consistently higher growth.
When Rokomari started in 2012, the ecommerce landscape of Dhaka was markedly different than what it is today. Over the past years, the market has changed. The digital commerce market has grown in Bangladesh. The market has become much more competitive. Alibaba owned Daraz and a host of local ecommerce players has been pushing the ecommerce market with a combination of aggressive marketing and discount efforts.
Rokomari has always followed a rather unconventional approach. The company, while has been pushing growth using various ingenious strategies, remains strategic regarding how it pursues growth.
Instead of freely investing in growth through the means of discounts and cash backs, it has been using content, loyalty programs such as user points, gift vouchers, email marketing, and various growth hacking techniques.
While it has been able to achieve meaningful growth using low-cost yet effective growth hacking techniques, the company made little progress towards expanding beyond books, an area that remains a critical challenge for the company.
If Rokomari doesn’t want to be a niche ecommerce player and aims to remain competitive, expansion is a must. Ecommerce at scale is an aggregation business. In order to be able to compete with other big players in the long run, Rokomari has to be able to expand and build a solid base in more than one vertical. If the company wants to remain a niche ecommerce player, that is an entirely different discussion. There are ample opportunities to pursue a niche in ecommerce in Dhaka as well as anywhere in the world.
However, the behavior of Rokomari suggests that the company wants to expand beyond books.
The company has tried expansion before. It tried DVDs and similar products and educational items with little success. DVD has been rendered obsolete due to technological changes and expansion with educational products is simply not enough.
The company has been experimenting with a new model of late, which it calls the Boi Toi model. More on that in a bit. Before a little bit about expansion.
Expansion is always hard. Digital platforms starting from ecommerce to services, everyone followed a rather focused approach to expansion across markets. You first start with one product, build a strong market presence in that vertical and then gradually move into other relevant verticals using the knowledge and expertise. This has been the case with Amazon and many other successful digital companies across the world.
However, this trend has played out differently in Bangladesh. Most digital platforms in Dhaka started with multiple verticals from day one. Rokomari remains an exception. One logic local operators use in favor of this strategy is that consumer experience has been shaped by global platforms. Since people have already seen aggregator platforms, they want everything in one place. While this idea sounds logic as well as lucrative, it is not so in reality because it is expensive and hard to pull off such a model for several reasons: 1) it is expensive 2) it is inefficient, at least in the early days 3) it puts an extra burden on focus and resources.
If you look around, this has been the case with most companies in Dhaka. Started with multiple verticals. Few verticals do well but not well-doing verticals keep on dragging the company down.
Rokomari did not make this error. While it saw through some expansion experiments with mild successes and outright failures, it has remained focused on books and it tried to do it to perfection.
The company is now eyeing expansion both vertically into new categories and horizontally into new segments of books such as academics where it was not doing as well.
Rokomari’s vertical expansion plan: Boi Toi model
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Ruhul Kader is a technology business and technology policy analyst based in Dhaka, Bangladesh. He is also the co-founder and CEO of Future Startup and author of Rethinking Failure: A short guide to living an entrepreneurial life. He writes about internet business, strategy, technology, technology policy, and society. He can be reached at [email protected]