Billionaires Push $20 Smartphones on Pakistan's Black Fridayby
Rocket Internet startup pushes US-style holiday splurge
Three-year-old Daraz gets 50 million euros in new funding
The billionaire Samwer brothers want to help introduce Pakistan’s shoppers to a local version of Black Friday, the November sales binge that kicks off the year-end holiday retail season in the U.S.
It doesn’t matter that Black Friday is an American invention, said Bjarke Mikkelsen, co-chief executive officer of Daraz, the online retailer backed by the brothers’ incubator Rocket Internet SE. Daraz -- operating in Pakistan, Myanmar and Bangladesh -- will team with brands and advertisers to offer “hundreds of deals” on Nov. 27, he said. It will partner with Easypay, the mobile payment service offered in Pakistan by Norwegian wireless carrier Telenor ASA.
“It’s a shopping event that was created in the Western world,” Mikkelsen, a former Goldman Sachs Group Inc. investment banker, said in an interview. “It’s a way of attracting many people with great deals and big marketing.”
Daraz, a three-year-old company, is getting more funding to bankroll that effort. On Tuesday, Daraz said it raised 50 million euros ($56 million), including 20 million euros from CDC Group, a British government-owned investor trying to create jobs in Africa and South Asia. The rest came from Asia Pacific Internet Group, Rocket’s joint venture with Qatar mobile carrier Ooredoo QSC.
Daraz is taking a page from Amazon.com Inc. and Alibaba Group Holding Ltd., which have demonstrated how hefty one-time discounts and exclusive merchandise can get American and Chinese bargain-hunters to spend billions of dollars. Daraz also plans its own version of Cyber Monday, the online shopping event held three days after Thanksgiving, which occurs in the U.S. on the fourth Thursday of November.
The plans are in the making even though Pakistan currently has only about 30 million Internet users. Neighboring India has 10 times as many, according to the lobby group Internet and Mobile Association of India, yet Pakistan’s $232 billion economy is on track for its fastest pace of annual expansion since 2008.
Daraz draws 6 million visitors a month spending a combined 1 million euros on exclusive offers for Chinese-made smartphones, TVs and clothes, Mikkelsen said. It sells via websites and mobile apps and almost half its deliveries venture beyond major cities, with smartphones as cheap as $20 being a top seller.
Building buzz will be key for a company that started out as a fashion retailer before expanding its wares in November 2014. It partnered with Google Inc. to host Tech Mela, a 10-day online shopping event that preceded this month’s Islamic Eid al-Adha holiday.
There’s little point advertising online when Internet penetration is so low, Mikkelsen said. Instead, Daraz is recruiting taxi drivers and college students to become “brand ambassadors,” or a sales force paid on commission.
“By tapping into a global shopping phenomenon we will create a more powerful event than if we made up a new concept from scratch,” he said.