Pickaboo, a Dhaka-based fast-growing omnichannel ecommerce startup, has built a strong position in the mobile and gadget vertical — one of the largest categories in ecommerce — over the years. The company sees huge potential in the vertical and has always given it special attention. It now seeks to expand its lead in the mobile and gadget market and, eventually, expand into other relevant categories.
Founded in 2016, Pickaboo has quickly become one of the top eCommerce players in Dhaka by combining quality products, excellent customer service, timely delivery, price benefits, and clever marketing. The company launched its physical retail operation in Q1 2020 to become an omnichannel ecommerce player.
Although the pandemic has slowed its growth, particularly in its offline retail business, Pickaboo says it has grown significantly and built a sustainable business.
Pickaboo has focused exclusively on mobile and gadgets since its inception. The company has strategically benefited from the expertise of Edison Group, the owner of the Symphony and an investor in Pickaboo. Mobile is a complex and competitive vertical. Domain knowledge and expertise have helped Pickaboo design effective strategies and build competitive moats. Pickaboo has since expanded into several other verticals, including accessories, but mobile and gadgets remain its top priority and largest vertical in terms of business.
As Pickaboo enters into the next phase of its growth, it wants to consolidate its lead in the mobile and gadgets verticals. The company has also been working on plans to launch an independent gadget brand.
Pickaboo's single category focus has worked in its favor. As a result, it has managed to position itself as a market leader in the mobile and gadget sector in omnichannel ecommerce. While it faces competition from other e-commerce players since mobile is among the biggest categories in ecommerce, the company has constructed a strong moat using its advantages and domain expertise.
Successful ecommerce companies are often aggregation plays where the platform with the longest collection of products wins. However, almost all the major ecommerce players today, including Amazon, started with one vertical and added more verticals once they had decisively conquered that one. Pickaboo says it will continue to focus on mobile and gadgets for the next few years.
By focusing on one vertical, you can compete better and go deeper. A startup is often a resource-constrained entity, so if you're doing a limited number of activities, your chances of doing them well increase.
The 80/20 rule applies everywhere. Generally speaking, 20% of your products bring in 80% of your revenue, so concentrating is better than spreading yourself too thin across too many verticals in the early days.
Pickaboo, for example, has been able to benefit from its dedicated emphasis on mobile and gadgets by boosting profitability. As mentioned earlier, mobile and gadgets are perfect examples of the 80/20 rule for overall ecommerce in Dhaka.
Mobiles and gadgets are a big market. The under penetration of smartphones makes the market even more lucrative because it means in the next few years it will grow significantly. Industry insiders estimate the mobile and gadget market is north of BDT 16,000 crore and is growing every year. According to some estimates, Bangladesh is the ninth-largest mobile device market globally. Even though e-commerce's share is still small, it is one of the top categories in ecommerce.
For Pickaboo, going all-in into mobile and gadgets makes sense for several reasons. As a vertical, mobile and gadget offer certain benefits. As I mentioned earlier in the essay, Pickaboo’s tie with the Edison Group allows it certain expertise. Mobile and gadgets are a complex vertical and having domain know-how can be meaningful competitive advantages.
Ensuring quality and supply is relatively easy and inexpensive. Market awareness is there. Consumers are already used to buying gadgets online. In other words, you don't need to educate the market as much as in many other verticals. This has enabled Pickaboo to save on advertising and reduce the customer acquisition cost.
Logistically, it is straightforward. For example, in clothing, there are a ton of small details you need to take care of. The return rate is also much higher in fashion and other categories. This is not the case with electronic products. The chance of sending the wrong product is relatively low in mobile and electronic products. Therefore, the operational hassle is relatively low, and providing after-sales and value-added service is fairly simple.
Pickaboo works directly with brands, which ensures better after-sales service, better product quality, and better margins. Many smartphone brands have an extensive market reach, so launching a product with one of them gives you certain mileage. You build credibility.
Moreover, Pickaboo has created an ecosystem around mobile and gadgets. In addition to selling mobile phones and gadgets, it also helps customers exchange old mobile phones, etc.
Besides selling mobiles, Mr. Morin adds, "We have after-sales services for our customers and also allow them to exchange used phones if they want to do so." "Anyone can sell used phones to Pickaboo and buy a new one, which nobody provides online."
Using a data-driven strategy, Pickaboo matches demand and supply. The company collects data from both the offline and online world leading to better decisions.
Pickaboo has always placed a high priority on customer service. The company prides itself on being customer-focused which has helped it to attract and retain customers without spending much on discounts.
Mr. Morin says that loyalty is often easier to establish with better service than discounts. "Customers who search for discounts always search for more discounts. They rarely stick with one brand for very long. Customers, who come for service, are more loyal if they receive the service they have been promised.”
Customer acquisition costs go down when you have a loyal customer base because they give you more business and bring new customers. Pickaboo has been able to control its acquisition cost by using this strategy. Pickaboo offers several services such as faster delivery, loyalty program, flexible EMI options, and exchange option focused on building lasting relationships with customers.
Being an omnichannel ecommerce player amplifies Pickaboo’s advantages. The combined operation strengthens Pickaboo’s overall demand aggregation improving Pickaboo’s leverage with partners. Apart from improving competitive moats, larger market opportunities, the company is approaching offline retail differently, focusing more on customer services and tech, changing customer behavior offline in the process.
Customer service is often an overlooked aspect in offline retail. Contrary to that, Pickaboo has been working hard to replicate its customer-centric approach online to its retail operation. Pickaboo leverages technology as well as customer service in order to create lasting relationships with the customers it serves offline. The company has introduced various services across its outlets to improve customer experience. It has also created an integration between its offline and online operation effectively changing customer behavior.
Mr. Morin says, "We are open to learning and agile. We have a system no other offline retail has. We can offer far superior customer service than anyone in the market.” The company’s focus on service and tech is already changing customer behavior offline and creating lasting advantages for its omnichannel operation.
Pickaboo has invested heavily in building processes and systems over the past few years in order to improve its overall efficiency. Now, these developments are paying off. According to Mr. Morin, "We have created systems and processes that allow us to run a lean operation compared to our size and business." Organizational inefficiency is one of the primary reasons behind startup failure. Labor productivity is the key.
Pickaboo says it will continue to invest in the mobile and gadgets category. The company has introduced a slew of new features such as Buy now pay later, Tempt, fast pick, official 12 months warranty, club points, P Protect, exchange programs for old phones, and new campaigns and benefits. In the coming days, the company says it intends to continue to innovate in the vertical and use its dominance in mobile and gadgets to expand to other related verticals.