Business, Technology

Daraz: Changing the Way We Shop 0 264

E-commerce was an industry fairly unknown in Sri Lanka. But over time it has slowly made its
way into our houses, showing us the ease of life of ‘shopping online’. The lockdown may have
even channeled it into our front pocket. As crowned retail giants struggled to meet demands
while following COVID19 safety regulations, e-commerce platforms got their time in the
limelight. Online shopping has firmly secured 1 percent of the market share to date, and there is
no doubt it will continue to grow rapidly even as we enter the “new normal”. We spoke to the Managing Director of Daraz.lk, Rakhil Fernando to find out how the industry is evolving in the wake of the pandemic.

How did Daraz face Covid19?
Our first priority was to support the government and really help fight the virus itself. As a group
globally, we invested in deploying testing kits and masks and tried to get it to our respective
governments as soon as possible.We donated 20,000 test kits and 100,000 masks to the Sri Lankan government. Our next goal was to help the e-commerce ecosystem. We were relying on so many small entrepreneurs to build our platform and sell on our platform. The government also needed these kinds of enterprises to restart the economy and keep it from collapsing. So, we really felt this was the area we needed to focus on and invest in.That was the goal behind launching the Seller Stimulus program in May. To further subsidize sellers, we decided not to charge them a commission, while providing them free shipping, and free packaging to help them get their business up and running at no extra cost. We now have about 4,000 SME’s that have come on board the platform within the last 30 days.How is business after the pandemic?
Business is growing tremendously well. Between last year and this year, we grew about 200
percent and we’re looking to grow at least another 150 percent from this year to next year. We
are also looking to exceed our Rs.15 billion in sales this year. We are very excited about
the prospect; COVID19 has really changed the e-commerce landscape in Sri Lanka.

There’s been an increase in the number of people who are willing to shop online, some of whom had little choice but to shop online during the curfew. Initially, they were looking at buying groceries online but now they’ve started buying other things as well. Currently, we have around 100,000 people visiting our site every day as unique visitors and that number keeps growing.

What does Daraz bring to the table?
E-commerce in general has many interesting players. The local e-commerce platform
unfortunately hasn’t been able to expand as much within the past few years. We’re one of the
first companies that has the capacity to sell island-wide. In terms of the items we have on sale
and our reach in terms of where we can deliver, I think it’s really becoming the golden era for e-
commerce in Sri Lanka with regard to the efficiency of the platforms and delivery platforms.
During these times you also see third party logistic companies coming out to provide services to
e-commerce companies during this very critical period. “So it’s an interesting time”. I think it’s
the right time for Daraz to be here and invest in Sri Lanka.

Many new platforms have entered the e-commerce ecosystem, as a market leader do you
see this as a threat?
Not at all. I think, for us, our biggest competitors in the last couple of months in terms of what
has popped up would be the FMCG grocery segment; mainly the likes of Uber and PickMe.
They sell online and get people their groceries in a short period of time. Now what we see, is
that we can do what a lot of our competitors probably find difficult. For an example if you buy a
Rs.1,000 worth bundle, you get a fixed set of vegetables, a set of cooking items or
confectioneries. These platforms sell these bundles because it’s easy for sellers to have a
packed bundle ready to hand over to the Uber or PickMe rider to deliver to the customer. But it
becomes very complex when you want to have a mixed order. When you scale that to 15,000
orders that are very different it becomes very complex because it takes a long time to find the
items, put them together, and make sure the order has the correct items and they aren’t mixed
up. It’s the kind of scale we operate in. We project our orders to reach about 30,000 orders a
day in the next couple of months. So, in that sense, we think that we can provide a more
scalable solution to a vast number of customers looking for different types of products that exist
on e-commerce platforms. Now there’s room for us to exist along with new e-commerce groups
like UberEats and PickMe. But I think we fulfill two very different types of orders, not the type of
customers; the orders we get are actually very different.

Is e-commerce a Colombo based market or has it diversified around the island?
We do around 15,000 orders a day and most of those orders come from out of Colombo.
About 70 percent of the orders come from outside the Colombo district. That’s interesting
because most people think e-commerce is centralized to Colombo but in our experience, there’s
a lot of demand from outside Colombo. Cities like Jaffna, Kandy but also in rural provincial
areas as well. So that’s a good sign, it shows there’s an increasing demand and purchasing
power for people who are looking for the right items, at the best price and happy to use e-
commerce to get them.

What is Daraz doing to integrate e-commerce in rural communities?
We have a concept called “Daraz stores”. We have engaged with about 400 to 500 Branded Daraz stores. These local shopkeepers are our representatives. How this initiative works would be, the shop keeper a village or town level will encourage and get his local shoppers, local customers to order on Daraz. We want to introduce e-commerce to the local community. A lot of people don’t shop online because they’re afraid to give their credit card details or they fear they may not receive the item they purchased online. We look at Daraz stores, as having a local representative, somebody you trust, somebody you deal with every day, they can be the person you trust to help you order online for the first time, so we work with these stores that help us get local customers online. The goods also get delivered to the shop so they know there’s a physical place that they can go to, make a complaint, return the item, and collect it. The advantage is that essentially, right now, the shop is restricted to items they have in store to sell. We make available for the shop to have a million items they can sell and they get a commission of 10 to 15 percent for the sale which is a decent commission.

Do Sri Lankan buyers get internationally listed products?
About 30 percent of the products on our platform are foreign sellers. Daraz and Alibaba Express are connected to the same supply network. We list some of those sellers also on our platform. We’re looking to increase foreign goods to create a bit more variety, especially now that there’s the limitation of importation of goods and available products. We want to make sure that there’s a good assortment still available on the site. But overall the site now lists about a million products of about 700,000 local sellers.

Do Sri Lankan sellers get to list their products internationally?
Not at the moment. Sri Lankans can sell on Alibaba as a B2B platform. But direct customer, Daraz is still a local base. It’s mainly only local customers that can order and get products delivered. That’s something we’re looking to grow and maybe do in the next couple of years.

What is the future of e-commerce in Sri Lanka?
It’s an incredibly bright future for e-commerce in Sri Lanka. I think over these weeks e-
commerce has really evolved and people have looked to online channels get all their shopping
needs. Right now, the demand is there but the sellers are still catching up and it’s up to a
platform like Daraz to really come through in terms of offering products, in terms of the service
level, and in terms of the technology. Now we see e-commerce growing by 3 percent in the next
2 to 4 years. So the potential should be 4 times the size we see it right now in the next 2 years.
That’s encouraging, that’s a huge opportunity. But you need platforms like Daraz to really set
the standards and be able to sell to everyone in the country.

“We are trying to reach all the customers in the country because everyone deserves to have any product they want, not just the products that are available on the high street. We want to reach out to the whole island and make e-commerce accessible to anyone, anywhere in the island”.

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Ariyaseela Wickramanayake Positive Economy for the Country! 0 1195

The first man to envision the Magampura Port, Founder Chairman and Managing Director of the landmark marine industry company Marster Divers and of Pelwatte Milk Powder, underwater diving expert, ship owner, and dairy man Ariyaseela Wickremanayake opines that the port can be converted into the largest in the region, and that by becoming self-sufficient in dairy products, Sri Lanka can save a mammoth US$ 500 Million annually.

Also a Director of Aitken Spence Plantation Management, Palwatta Sugar Company, Bogawanthalawa Plantations and several other companies, Wickremanayake spoke to BiZnomics about his life journey: building his empire, simple pleasures of life, and one’s responsibilities to the nation.

Initially tracing back his school days, Wickremanayake credits his Europeon teachers who shared their lives with the boys at the Jesuit School of St. Aloysius Collage in Galle by saying, “They moulded us students to become chivalrous men, and stamped in us that life is about service to others especially to our motherland, and not in serving ourselves”. he states.

As a youngster in the early 1960s Wickremanayake was down to admire the lifestyle of the highly paid British divers and fathomed of being one himself, with a niche carved as a national swimming champion. Although selected to the Peradeniya Medical Faculty, opportunity of realizing his dream came his way when the Colombo Port Commission called for trainee divers and effortlessly he made the grade.

Deep sea diving although is synonymous with risks, Wickremanayake’s capabilities, commitment and dedication to his profession stood out in his favour to be classified as highly efficient and productive in a comparatively short time. These also led him to become one of the most sought after, with newspapers splashing details of his skills and workmanship.

“At 23 a German company contacted me for a tow-year assignment in Saudi Arabia. During the first three months I worked over normal capacity and earned a fantastic US$ 16,000 a month” he says adding, “Everybody was shocked with my skills and abilities when I completed my assignments in a mere nine months. I collected a lump sum payment for the balance period and returned home with an unprecedented amount of money”

Wickremanayake pioneered a diving company named Master Divers in which at times 1500 were employed, and built his legacy. The Colombo Port Commission immediately engaged his services for the Queen Elizabeth Quay extension, the first container terminal on South East Asia which attracted American container shippers, resulting in Wickremanayake’s reputation expanding many fold. Shippers who faced complications in obtaining diving services from the government due to bureaucratic procedures turned to Master Divers, leaving Wickremanayake with a tight work schedule doing a typical daily dive between four to ten times which saw him breakfasting in the Trincomalee and lunching in Colombo before rushing to Galle, yet he claims that he had been nowhere in the ‘tired line’

Wickremanayake proudly explains the circumstances under which he became an owner of boats and ships: “During the early period when ships were anchored in the outer harbour, we were compelled to use pilot boats whenever available as there were no boats to go out to sea. As this became a hassle, I thoughtfully bought three boats from the Netherlands”. He continues in the same tone: “Another problem we faced was that although fuelling brought us good income, ships were unable to dock in for fuelling purpose. Fuelling was crucial and demanded urgent attention but the authorities were lackadaisical on the whole. I then stepped in and brought three oil tankers, got the necessary fuel from the Petroleum Corporation and satisfied the shipping industry with a prompt service.

When in his zenith, Ariyaseela Wickremanayake was invited to join the Board of Directors as a shareholder of Aitken Spence. It did not take long for other companies to spread their tentacles to grab hold of this master- mind entrepreneur.

With the lunching of the Southern Development Project in the 1980s Wickremanayake was deeply involved in the fisheries harbours in Galle, Kirinda and Hambantota. It was at this stage in 1996, preserving the strategic location of Hambantota in the sea lane between the Middle East and the Far East he conceived the thought of a harbour at Magampura, and devoted time to studying the locality. In ancient time civilisation flourished with temples abounding, and kings had their chief seat of government in Magampura at one end where rice production thrived and salt panning was the major industry in the coastal area. However, it took some time for Wickremanayake to convince the rulers of the country to implement his proposal which finally become a reality in November 2010 when his vision and endowment was realised, and the first ship sailed in to the harbour.

Wickremanayake laments that only two percent of what could be done at Hambantota has been completed so far. “The Hmbantota Port has potential to be the largest in the region. It lies beside on of the world’s biggest sea routes, and we should make proper use of it. A dry dock where ship repairs can be done should be constructed. This would enhance services provided. The hinterland agro- industries such as rice-based production and dairy-based products can be exported though Hambantota. Employment opportunities, direct and indirect, can be expanded, and even engineers could be provided with world-scale salaries”, he told a seminar on ‘Entrepreneurship’ organized by private sector engineers.

Switching on to the dairy industry, with statistics to support, Wickremanayake emphasise that the country had been self-sufficient in milk at one time. “Of the present cattle population of 1.2 Million only 240,000 cows are milked. Milking another 250,000 cows will make us self-sufficient in milk. We know how to churn our own butter, and also produce yoghurt, ice cream, and other value-added dairy products. We need not import dairy products at all. We even the technical knowledge of producing owdered milk. We can save US$ 500 Million annually in this way”, he explains. Wickremanayake’s Pelwatte plant already produces milk powder, ice cream, yoghurt, and butter – a quantity of which is exported.

By sheer face of commercial ingenuity an energy, the market has become an oyster. But Ariyaseela Wickremanayake has not hesitated to use the knife to prise it open and try to get at the pearls. He has launched the ‘Maubima Fund’ to give local producers a future’, as one with nationalistic feelings. He states that everybody should contribute his might to the country.

‘Country’ property considered is not just the soil or the spot of earth on which we happen to have been born, not the forests and fields, but that community of which we are member or that body of companions and friends and kindred who are associated with us under the same constitution or government protected by the same laws and bound together by the same civil polity. In other words, it is our politics and not our topography that gives us our true national allegiance. All the rest is just selfish bluster.

By : T V Perera

Image Curtsey : Eranga Pilimathalawwe

Make timely moves to stay competitive 0 108

By Dr. Kishu Gomes
Prominent business leader, Corporate Icon & Management Consultant, Kishu
Gomes was the Chief of Sri Lanka Tourism (SLTDA & SLTPB) after leading a
multinational operation in Sri Lanka for over 2 decades. He continues to consult
businesses and corporates to take a transformational journey.

Many things cause organizational change. Covid19 is one big example only. Other than
pandemics or epidemics, economic downturns, tougher trading conditions, finance cost
escalation, technological changes, competitive pressures, including mergers and
acquisitions, customer pressure, particularly shifting markets, government legislation or
regulatory changes etc.
All organizations are in flux: changing their focuses, expanding or contracting their activities, and rethinking their products and services. Most organizations more than ten years old look nothing like they did even five years ago. Pre and post-COVID 19 are two different worlds altogether. And it is likely that in the next year or two organizations will not look as they do today.

In this context, managers have to be able to introduce and manage change to ensure
the organizational objectives of change are met, and they have to ensure that they gain
the commitment of their people, both during and after implementation. Often, at the
same time, they also have to ensure that business continues as usual.
Resistance to change may be active or passive, overt or covert, individual or organized,
aggressive or timid, and on occasions totally justified. Organizational change
management takes into consideration both the processes and tools that managers use
to make changes at an organizational level. Most organizations want change
implemented with the least resistance and with the most buy-in as possible. For
this to occur, change must be applied with a structured approach so that
transition from one type of behavior to another will be smooth.

As the speed of change continues to increase, change management is a fundamental competency needed by managers, supervisors, Human Resources staff, and organization leaders. To tap your wisdom, my recent survey about change management afforded me the opportunity to consolidate hundreds of years of experience in change management. Here, in your… Change is possible; the need for change is increasing; change capability is necessary for organizations that will succeed in the future. Change management challenges organizations to succeed during times of great change. Employees love to stay in their comfort zone because it is familiar and they know what their expectations are. Many employees fear change and the manager has the responsibility to help employees move through the change process. Managers need to develop themselves as a role model for change and create an environment where all of their employees will get aboard and be willing to make the changes that are needed. It takes a smart and intuitive manager to manage change in any business organization. In order for a manager to effectively manage change in the business setting, they need to develop an understanding of how employees react to change. Every employee will have a different view of change and what their reaction to change will be. It is important that the manager stays visible and is always willing to jump in and help the employees manage change. In order to be an effective manager of change, the employees must continue to feel valued and respected by their manager. If a manager helps the employees through the process of learning to let go of the old way of doing things, they can help the employee adjust to the new changes in their working environment.

Deal with resistance
When a manager is facilitating change in the business world, they need to be
aware and acknowledge that resistance to change is normal and common.

Smart managers will recognize that resistance to change can actually be viewed as a positive sign that the employees are involved with the changes that are occurring in their working environment. If employees do not believe in their managers and lack trust in their decisions or there have been explanations of the reasons for change and how it will benefit the employees, that manager will have difficulty managing any changes that need to be implemented.
Another effective tool for a manager to use to implement change in the business setting
is to involve the employees in the decisions that are being made to change their working
environment. This is a method to help the employees feel valued and more motivated
to go along with the implementation of the changes. This becomes a win-win situation
for the organization, the manager, and all of the employees. Managers that involve their
employees and let them become part of the change will have an easier road for
acceptance from the employees.

Communication is the manager’s best friend. This is how the manager prepares the employees for the changes and can clearly clarify the expectations and expected outcomes. The manager is the individual that clearly can communicate the rationale for the change and answer the employee’s questions and stress the importance for the change to occur. Managers need to remain positive and upbeat and show the employees they are energized to make the changes happen. There are always some risks when changes are being initiated. The manager needs to be ready for the potential negative effects of any changes and have a plan to handle them. If mistakes occur along the way, then this is the opportunity for the manager and their employees to learn from the mistakes and move forward. Organizations that have a talented and effective manager will be able to handle the changes that need to occur to keep them competitive in their industry.