Taking the e-commerce industry to a new height, Daraz will be looking to aggressively promote online transactions in Sri Lanka with an aim to grow in terms of sales value and volume.
“We see an increased trend of more and more Sri Lankans engaging in online shopping at present. During the last four months alone, our sales have doubled. We have seen a far better trend and growth than we projected. We anticipated that our main warehouse capacity could cater to the existing demand for at least another year, but it has already reached capacity, forcing us to invest on our expansions in the next financial year,” Daraz Managing Director Rakhil Fernando said.
Daraz has reached capacity much before it anticipated and will be investing in new warehouse and mini-hubs islandwide to meet capacity requirements.
Declining to disclose the investment on expansion, Fernando said its logistics arm, Daraz Express Colombo (DEX), will create more mini-warehouses or hubs around the country, to further enhance its service offering and strengthen business efficiency. It currently has 18 mini-hubs around the country.
Daraz.lk, which is part of Alibaba Group announced its second edition of its 11.11 campaign, last week in Colombo. The Alibaba Group shows confident in Sri Lankan market and will be investing heavily on people, infrastructure, technology and marketing to enable it to have a strong presence in the country.
The e-commerce industry in Sri Lanka is growing steadily, but there is a lot more to be improved on, particularly in the area of logistics. In reaching a higher standard in this sphere logistics is a challenge, as infrastructure are not geared to service level of growth required for e-commerce, he said.
During the three years of its operations in Sri Lanka, the company said it has now reached the full capacity of 200,000 items at its central warehouse located in Kelaniya, and is now in the process of investing in another, while also setting up more last mile mini-hubs around the country.
The 11.11 campaign, one of the most anticipated sales in the world, which takes place on 11 November, generates $ 30 billion at its one sale in theAlibaba Group, and Sri Lanka’s contribution to this last year was around Rs. 400 million. Around 70% of its orders are generated from outside Colombo, indicating that it is not solely an urban-centric trend to shop online.
“Alibaba Group has confidence in Sri Lanka and has already invested a lot into the market. They started investing from last year, when the head count was only 150 to 200 people, and today we are touching 700 people.
The investment runs into millions of dollars on people, resources, infrastructure, technology, and marketing. We are going very strong in Sri Lanka.
We feel that there is a lot of potential to grow here,” he added. However, he stressed that the key challenge in Sri Lanka is its lack of logistic facilities. “The fulfilment of Sri Lanka’s infrastructure is still at a very nascent stage and not geared to the service levels required for e-commerce,” he said.
“Nobody will want to resist discounts up to 80%, and it is our strategy to attract more people to our platform. We are hoping to double the packages delivered last year to over 250,000. We also see people placing orders for higher-value items such as mobile phones, refrigerators, and other home appliances as well. This is also a testament that brands believe in e-commerce as a channel, and Daraz as one big business driver as well,” Fernando stressed.
With the order numbers increasing this year, he said they will probably see an exponential increase in the business they generate as well.