A report on

MARKETING
ANALYSIS OF
DARAZ.COM.NP

Bibesh Manandhar
Nischal Amatya
Pramila Basyal
Pukar Sthapit
Suraj Aryal
MBA-IT 3rd Batch
Executive Summary

This report is an outlook to the marketing strategy of Daraz.com.np. Through this report, we
make an effort to understand how Daraz has used marketing theories and entailed that it in its
marketing plan. After the analysis, we identify new marketing opportunities for Daraz and offer
recommendations on how it can be implemented.

We first analyze the background of online marketing through which we try to derive the source
of customer needs. We, then, identify the marketing strategy that Daraz has been using. After
that, we analyze the literature review where we describe that in the past that have done the
similar type of project and also, we analyze the research methodology through an interview and
the website. Then, we analyze the internal factors of the company with regards to its strength and
weakness along with the external factors such as opportunities and strengths to check the strategy
for SCA (Sustainable Competitive Advantage), growth strategy, competitive strategy and the
marketing strategy of the organization and identify the key areas that the company needs to work
on.

After this analysis, we evaluate the processes that Daraz has to go through in order to acquire the
product or ensure delivery of its product whilst bridging the communication between the
suppliers and the final customers. Based on our target segment and position, we design the 7 Ps
of our service. We also provide recommendation with regards to how the 7Ps have been designed
and how it can be improved.
Table of Contents
Chapter I: Introduction ................................................................................................................ 1

1.1 Background ................................................................................................................. 1

1.2 The Marketing Concept ............................................................................................... 2

1.3 Objectives of the Study................................................................................................ 2

1.3.1 Broad Objective: .................................................................................................. 2
1.3.1 Specific Objectives: ............................................................................................. 3

1.4 Methodologies................................................................................................................... 3
1.4.1 Direct Interview.......................................................................................................... 3
1.4.2 Internet Research ........................................................................................................ 3

Chapter II: Literature Review...................................................................................................... 4

Chapter III: Analysis ................................................................................................................... 6

3.1 Strategy for SCA (Sustainable Competitive Advantage) of Daraz ...................................... 6

3.1.1 Low Cost Provider/ Low pricing................................................................................. 7
3.1.2 Market or Pricing Power ............................................................................................. 7
3.1.3 Powerful Brands ......................................................................................................... 7
3.1.4 Strategic assets ........................................................................................................... 8
3.1.5 Barriers to Entry ......................................................................................................... 8
3.1.6 Adapting Product Line................................................................................................ 8
3.1.7 Product Differentiation ............................................................................................... 9
3.1.8 Outstanding Management / People.............................................................................. 9

3.2 Competitive strategy of Daraz ......................................................................................... 10

3.2.1 Differentiation .......................................................................................................... 10
3.2.2 Focus ........................................................................................................................ 11
3.2.3 Cost Leadership ........................................................................................................ 11
3.2.4 Differentiation Focus Strategy .................................................................................. 11

3.3 Marketing Mix strategy of Daraz ..................................................................................... 12

3.3.1 Product ..................................................................................................................... 12
 3.3.2 Price ......................................................................................................................... 13
3.3.3 Place......................................................................................................................... 14
3.3.4 Promotion................................................................................................................. 15
3.3.5 People ...................................................................................................................... 15
3.3.6 Process ..................................................................................................................... 16
3.3.7 Physical evidence ..................................................................................................... 17

3.4 Growth Strategy .............................................................................................................. 17

Discussion and Conclusion ....................................................................................................... 20

Appendix .................................................................................................................................. 22

References ................................................................................................................................ 23
Chapter I: Introduction

1.1 Background
With growing urbanization and fast-moving lifestyle of people, shopping is no longer about
visiting the physical store and spending about half a day picking out the things you like.
Customers no longer want to go through the hassle of assessing the shops nearby to bid the best
price or bargain with the shopkeeper to get the best deal. Thus, internet brought opportunity for
the customers to gain a shopping experience which was only one click away. Online shopping
has been a breakthrough for customers, offering them their favorite products from their favorite
stores, without spending their time in commuting to the destination. However, one of the major
drawbacks of online shopping has been with regards to the quality. There has been problem
regarding information asymmetry, questioning their trust on online sites.

The change in holding structure of the popular e-commerce platform is likely to transform
Nepal’s e-commerce landscape that has been struggling to make a significant stride.
Daraz is a rebranding of what was previously known as Kaymu and now owned by Alibaba
Group Holding Limited (April 2018). It is backed by Rocket Internet Ventures and led by
Ahmed Khan as its MD in Asia (founded in 2012). Daraz has had its presence in Nepal since
2014, when it was introduced as Kaymu.com. It was rechristened as Daraz in 2016 when Rocket
Internet decided to merge Daraz and Kaymu under the new entity of Daraz Group. Alibaba buys
Daraz to expand its e-commerce empire into South Asia. Kaymu/Daraz is registered in Nepal as
an ecommerce site which brings buyer and seller together. Kaymu has targeted online
marketplaces in various countries like Nigeria, Pakistan, Morocco, Ghana, Bangladesh,
Afghanistan, and Middle East including Nepal and expanding over. Kaymu was first launched in
Nepal in May 2014. Since its launch, Kaymu/Daraz has quickly become Nepal's fastest growing
online marketplace. Daraz has offered multiple transactional modes to support and facilitate
buyer-seller via payment gateways- the most popular being Cash on Delivery. Without any
doubt, Daraz Nepal is one of the largest ecommerce platforms in Nepal. However, unlike the
business model of Amazon and even eBay, Daraz accepts promotional and transaction
responsibility without maintaining any inventory itself.

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Daraz has expanded its online shopping experience in Nepal to mobile platform with the launch
of its Android and IOS mobile application. The application has been developed with the vision of
making buying and selling online faster and more convenient. The Daraz app also features
unique services to improve user experience, such as a shipping fee calculation system to organize
more personalized and cheaper delivery. Daraz in Nepal is currently being managed by Mr. Rajiv
Amatya as a managing director and Mr. Laxman Basnet as a human resource manager.

After joining with Alibaba Group Holding Limited, Daraz changes their organization priorities
and their prizes. They want to know the customer experience and their expectation. Recently, the
organization has done 11-11 biggest sale which was quite successful.

1.2 The Marketing Concept

Daraz has been focusing on what customers wanted transfiguring the customers’ value into their
service. They have been providing a wide range of product offering ranging in different price and
quantity, which customers can easily pick in terms of what brand they prefer. Along with just the
product offerings, it has also been adding value to their service by ensuring delivery of their
products to all customer locations within their target location. Join with Alibaba group holding
limited, Daraz changes the prizes and their priorities through customer expectation and their
experience. They also take continuous feedback from its customers in the form of online ratings.
It has been able to create its presence in social sites to be more interactive with customers to find
out what they want and take recommendations on how they can improve their service.

1.3 Objectives of the Study

1.3.1 Broad Objective:
The broad objective of our research is to find out the marketing strategies as well as the growth
strategy and the sustainable competitive strategy of Daraz Nepal which is currently the largest E-
Commerce site in Nepal.

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1.3.1 Specific Objectives:
• To understand the marketing policies of Daraz Nepal.
• To find out the promotional activities of Daraz Nepal in online as well as offline.
• To understand the strategy of the organization to sustain in the more competitive market.
• To identify the threats from their competitors.

1.4 Methodologies
We used direct interview method and also took data from other various resources i.e. internet.
We collected data with the help of internet, we validate the information during the interview
process and we also prepared the questionnaire related to the topic.

1.4.1 Direct Interview

We went to Daraz office where we interviewed Ms. Vidha Pradhan, the marketing officer of
Daraz. We prepared various questionnaires according to the topic we were related to and
collected detailed information about research questions. We got the first-hand experiences of
what the marketing strategy is done during their normal days and during their event days.

We got to know how Daraz works, got to know their objectives in context of customers, profits.
We also got to know if Daraz is affected by the season cycle. And also understand in which way
they strategies themselves, to market themselves during their events online as well as offline. We
also got to know the rising issues during their strategy.

1.4.2 Internet Research

We surfed through internet to know more about their past strategy since they were taken over by
Alibaba. We got how they used to make strategy before Alibaba.

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Chapter II: Literature Review

Marketing is the study and management of exchange relationships. Marketing is the business
process of creating relationships with and satisfying customers. With its focus on the customer,
marketing is one of the premier components of business management. Marketing is defined by
the American Marketing Association as "the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large." The term developed from the original meaning which
referred literally to going to market with goods for sale. From a sales process
engineering perspective, marketing is "a set of processes that are interconnected and
interdependent with other functions" of a business aimed at achieving customer interest and
satisfaction

The 'marketing concept' proposes that in order to satisfy the organizational objectives, an
organization should anticipate the needs and wants of potential consumers and satisfy them more
effectively than its competitors. This concept originated from Adam Smith's book The Wealth of
Nations but would not become widely used until nearly 200 years later. Marketing and
Marketing Concepts are directly related. Marketing practice tended to be seen as a creative
industry in the past, which included advertising, distribution and selling.

During the 1940s, the discipline of marketing was in transition. Interest in the functional school
of thought, which was primarily concerned with mapping the functions of marketing was waning
while the managerial school of thought, which focused on the problems and challenges
confronting marketers was gaining ground. The concept of marketers as "mixers of ingredients,"
was first introduced by James Culliton, a Professor at Harvard Business School. At this time
theorists began to develop checklists of the elements that made up the marketing mix, however,
there was little agreement as to what should be included in the list. Many scholars and
practitioners relied on lengthy classifications of factors that needed to be considered to
understand consumer responses. Neil Borden developed a complicated model in the late 1940s,
based upon at least twelve different factors.

Organizations are competing to be at the top of the customers mind and at the same time trying
to protect their market share. Marketing is at the center of creating customer loyalty and

4
customer retention. As a result, the function carries out promotions, campaigns from time to time
and this has been proved as a successful initiative in also attracting more customers. Without
marketing, our brands will not be illuminated and our organizations would be lifeless.
Organization’s success is not only determined by the prudent application of funds to the various
portfolios of investment but also by the relationship established with the customers, which is a
function of marketing.

We also reviewed the report based on Daraz as a part of secondary sources. We also reviewed
how Daraz analysis the market, check the upcoming problems and also solve the problems. We
also got to know the environment or the surrounding markets that got affected by Daraz. It also
helped us to identify Daraz target group for customer and also how they were able to bring in the
customer.

The literature also supported on how their strategies changed after acquisition by Daraz. How the
change their operation activities and their planning method due to change in their investment.
The information collected are later all verified during the interview with the marketing officer.

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Chapter III: Analysis

3.1 Strategy for SCA (Sustainable Competitive Advantage) of Daraz

Sustainable competitive advantages are company assets, attributes, or abilities that are difficult to
duplicate or exceed; and provide a superior or favorable long-term position over competitors.
Daraz is backed by Rocket Internet Ventures which serves as an ecommerce site which brings
buyer and seller together. Daraz is now one of the largest ecommerce platform in Nepal. Daraz is
much more popular due to the quality of the products and services then its others competitors
like sastodeal, esewapasal, etc. Due to its reasonable products and services it has been getting the
competitive advantages over its competitors. It has been able to create its presence in social sites
to be more interactive with customers to find out what they want and take recommendations on
how they can improve their service. Daraz keep track of what its competitors are doing. Its
competitor can come up with new product offering and schemes that directly effects on the sales
of Daraz. Thus, Daraz stay one step ahead to outplay its competition. Some of the sustainable
competitive strategies that Daraz has are:

Sustainable Competitive
Advantage

Low Cost
Powerful Barriers to Product
Provider/ Low
Brand Entry Differentiation
pricing

Market or Pricing Adapting Product Outstanding

Strategic assets
Power Line Management / People

Figure 1: Sustainable Competitive Advantage

6
3.1.1 Low Cost Provider/ Low pricing
Daraz’s efficient operations help the organization to keep competition out by being the low-cost
provider. Being the low-cost provider, it can be a significant barrier to entry for other ecommerce
organization. In addition, low pricing done consistently can build brand loyalty be a huge
competitive advantage to Daraz. Daraz offer huge discounts in some products in different events
like Black Friday, 11:11 and others different festivals. This provides the competitive advantages
to the organization.

3.1.2 Market or Pricing Power

Daraz has the ability to increase prices without losing market share and also have pricing power.
Companies that have pricing power are usually taking advantage of high barriers to entry or have
earned the dominant position in their market. In today’s context Daraz has become one of the
organizations which have been dominating the ecommerce market with its marketing strategy
and with the price penetrating strategy. Daraz has change itself from Kaymu to Daraz and trying
to change the consumer’s perception ecommerce. However, this change has created confusion
among customers in the target market. To avoid this confusion, Daraz is involving in various
activities to get establish it in the market.

3.1.3 Powerful Brands

It takes a large investment in time and money to build a brand. It takes very little to destroy it.
The brand offered by Daraz is invaluable because it causes customers to prefer the brand over
competitors. Being the market leader and having a great corporate reputation Daraz can be part
of providing a powerful brand and can have a competitive advantage. Daraz provide the brands
that are unable to get in other ecommerce market. With its branding strategy Daraz is able to
guarantee the authenticity of the product.

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3.1.4 Strategic assets
Patents, trademarks, copy rights, domain names, and long-term contracts would be examples of
strategic assets that provide sustainable competitive advantages. Companies with excellent
research and development might have valuable strategic assets. Daraz serves as a marketing
channel and provides the flow of information about the products and services that are offered by
the offline market. Daraz does not have its own stores; it has made the long-term contracts with
the vendors to provide the available goods and service at a reasonable price. Daraz has a well-
known brand value which has become the valuable strategic assets for the organization. This
helps Daraz to achieve future outcomes.

3.1.5 Barriers to Entry

Cost advantages of an existing company over a new company are the most common barrier to
entry. Daraz has the unique digital market platform where sellers and buyers can interact and a
one stop shop for buying and selling and also has the cost advantages over offline market and
other ecommerce market. Daraz set as benchmark for the other organization and also makes
difficult for other market to sustain in the market. With the different marketing strategy Daraz
provide the discounts on the certain products which make other ecommerce organization difficult
to establish in the market. Daraz is much more concentrate about Product quality, Entrance of
new product in the market, Image and branding, as well as customer satisfaction which creates a
major barrier for other ecommerce organization.

3.1.6 Adapting Product Line

A product line that can evolve allows for improved or complementary follow up products that
keep customers coming back for the new and improved version and possibly some accessories to
go with it. Daraz provides that type of the products that are needed as per the demand of the
customer. The products on Daraz also changes as change in the season. Daraz also provide the
new products that are launched newly in the market. Daraz adopt the new feature products at
reasonable and affordable pricing.

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3.1.7 Product Differentiation
A unique product or service builds customer loyalty and is less likely to lose market share to a
competitor than an advantage based on cost. Daraz has quality, number of models, flexibility in
ordering and customer service and all aspects that can positively differentiate a product or
service. In a differentiation strategy a Daraz seeks to be unique in its industry along some
dimensions that are widely valued by buyers. It selects one or more attributes that many buyers
in an organization perceive as important, and uniquely positions it to meet those needs. It is
rewarded for its uniqueness with a premium price. Daraz has been able to provide such products
which are much more different from others in terms of the quality and brands. Most of the online
sites are competing themselves in terms of the price but are unable to ensure the quality. Daraz
provides such products that are of quality and in reasonable price and services.

3.1.8 Outstanding Management / People

There is always the intangible of outstanding management. Management that has been successful
for a number of years is a competitive advantage. Daraz is website or an application where the
customer can see what types and qualities of products it provides to its customers. The
management of the employee has become its one of the biggest competitive advantages.
Currently Daraz has more than 300 employees so that it is getting its partner and consumer
development. Daraz regulates its employee form the point of getting order of a product to the
time of delivering of the product which provides the advantages to establish in the market.

Daraz provide different trainings to its sellers and other employees which provide the proper
customer service. Form the information of the product to the delivery of the product Daraz has
many competitive advantages. Daraz has used differentiated strategy which offers different
products for different market. Daraz also have the huge infrastructure than other ecommerce
organization which makes the organization to satisfy the target market. Daraz has the solid team,
i.e. the team is consisted of all business people and technological people. It is often hard to find a
team with good mix. With the good mix team Daraz is growing faster in each and every step.

9
3.2 Competitive strategy of Daraz
Competitive strategy is the process of developing competitive advantage and earning above-
average returns for stakeholders. Competitive advantage is achieved through the strategic
management of resources, capabilities, and core competences, as well as the firm’s responsive-
ness to opportunities and threats in the external environment. Above-average returns are gains
that are superior to alternative investments with a similar risk profile.

Figure 2: Competitive Strategy

Daraz has the focused marketing strategy. It has been providing the goods and services to the
people ranging in different price and quantity. Daraz has been providing the products that are not
been able to provide by other others ecommerce organization. Daraz recently has more than 5
lakhs app users and it aimed to provide the service in all the geographic areas of Nepal. Now
Daraz has most of its branches in more than 20 cities outside the Kathmandu city. Daraz has the
competitive strategy in terms of following:

3.2.1 Differentiation
In a differentiation strategy a Daraz seeks to be unique in its industry along some dimensions that
are widely valued by buyers. It selects one or more attributes that many buyers in an organization
perceive as important, and uniquely positions it to meet those needs. It is rewarded for its

10
uniqueness with a premium price. Today many of the online sites are being growing day by day
but Daraz has been able to provide such products which are much more different from others in
terms of the quality and products. Most of the online sites are competing themselves in terms of
the price but are unable to ensure the quality. Daraz provides such products that are of quality
and in reasonable price and services.

3.2.2 Focus
The generic strategy of Daraz is to rests on the choice of a narrow competitive scope within an
organization. Daraz selects a segment or group of segments in the organization and tailors its
strategy to serving them to the exclusion of others. In cost focus a Daraz seeks a cost advantage
in its target segment, while in differentiation focus Daraz seeks differentiation in its target
segment. Both variants of the focus strategy rest on differences between organization’s target
segment and other segments in the industry. The target segments have buyers with unusual needs
or else the production and delivery system that best serves the target segment that differ from
other industry segments. Cost focus exploits differences in cost behavior in some segments,
while differentiation focus exploits the special needs of buyers in certain segments.

3.2.3 Cost Leadership

In cost leadership, Daraz sets out to be one the low-cost supplier in its industry. The sources of
cost advantage are varied and depend on the structure of the organization. Daraz finds and
exploit all sources of cost advantage. If a firm can achieve and sustain overall cost leadership,
then it will be an above average performer in its industry, provided it can command prices at or
near the industry average.

3.2.4 Differentiation Focus Strategy

Like the cost focus strategy, the differentiation focus strategy of Daraz targets a very specific
segment of a market, but rather than offering the lowest prices to the buyers in that market,
Daraz offers something unique that competitors aren’t offering. Daraz is focused on the quality
of product and services provided to its customers. Daraz offer such products that are difficult to
get from other most of the ecommerce sites.

11
Daraz has the huge number of infrastructure in term of the system and size. With this
infrastructure Daraz is capable of bringing its seller and customer at a single platform. Daraz has
much more competitive advantages in terms of the infrastructure with other ecommerce
organization like sastodeal, esewapasal and others. Daraz has been able to create its presence in
social sites to be more interactive with huge number of customers to find out what they want and
take recommendations on how they can improve their service

3.3 Marketing Mix strategy of Daraz

The marketing mix is the set of controllable, tactical marketing tools that a company uses to
produce a desired response from its target market. Daraz consists of everything that a company
can do to influence demand for its product. The ecommerce site is being growing in a great
number in few years in Nepal. Many of the people are now familiar with the online marketing.
Daraz is the ultimate online shopping solution for all the customers. Daraz offers a wide and
assorted range of products including clothing, footwear, accessories, electronics, mobile phones,
home and living and much more. Daraz also follows the 7p’s strategy to produce a desirable
response from the market. The 7p’s strategy are:

3.3.1 Product
Daraz Nepal is unique from other online shopping sites in Nepal and provides the best online
shopping experience to its customers. Daraz is an online shop that does not produce any products
rather it takes the products from the authorized sellers according to customers’ orders and
delivers those products to the respective customers. Daraz has the classified products on the basis
of durability, uses and price. The goods like footwear, refrigerators, machine tools and clothing
and durable goods available at Daraz are: clothing for men and women, home appliances, mobile
phones, electronics etc. Daraz has more than 8,000 products. The main services provided by
Daraz are delivery of products to the respective customers, training to its authorized sellers, and
price return for its customers within seven days of purchase etc.

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 Figure 3: Different products offered by Daraz

3.3.2 Price
Organization need to have a strategy on pricing, both for wholesale and retail, bulk sale and
whether you are in a position to offer discounts to ensure customer loyalty. Daraz is trying to
establish itself in the ecommerce business so it is penetrating the Nepalese market and try to
compete in the price. The products offered by Daraz are relatively low compared to the offline
Nepali market. This low-price strategy implemented by Daraz is to create the brand awareness,
popularity and increase the goodwill of the company. Currently Daraz is ready to face the loss
for few years until it establishes itself in the Nepalese market and starts making profit.

13
 Sony Xperia L1 Smart Mobile Phone [2
D3 Smart Watch
GB RAM, 16 GB ROM -White]
Rs. 1,350
Rs. 12,500
Rs. 1,500-10%
Rs. 20,000-38%

Figure 4: Products with different price

3.3.3 Place
Place is distribution of products and services from a certain area. The place of Daraz is
completely virtual or internet based. Daraz sell all the products through its website. Daraz does
not sell any product in any regular type shops. The web address of Daraz, which is
“www.daraz.com.np” can be considered as the place of Daraz. It provides the flow to
information to other offline stores for the goods and services. Daraz sell the product from its
website to the available locations. It has the contract with some of the logistics for the delivery of
the product according to the demand and feasibility of the customer. Currently the market of
Daraz is 75% inside Kathmandu and 25% outside of Kathmandu valley. The different places
other than the Kathmandu, Lalitpur and Bhaktapur includes Nepalgunj, Pokhara, Janakpur,
Biratnagar, Birgunj, Butwal, Dharan, Itahari, Narayanghat, Hetauda, Bharatpur, Kakarbhitta,
Damak, Chandragadi, Bhadrapur, Bhairahawa, and Birtamod are some of the cities to which
Daraz is able to deliver its product/service.

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3.3.4 Promotion
Promotion is a process through which an organization attempts to inform, persuade, and remind
consumers, directly or indirectly, about the products and brands they sell. Promotion affects a lot
in the brand image as well as the sales of the organization. Daraz promote itself mostly on the
online platform with the objectives to increase the sales. The organization has developed the
promotion programs by advertising itself identifying the target market and buyer motives. Daraz
believe in online marketing rather promoting itself on newspapers, TV ads, radios etc. when it
comes to big selling day like 11:11 or black Friday then only on those events it promotes through
newspaper or TV ads. Daraz specifically focuses on consumer promotion more.

Figure 5:Promotional campaign of the products

3.3.5 People
In marketing mix strategy people matters the most. Without the people the products even does
not exist. People play a vital role and serve as the backbone for the organization. Daraz is a well-
known e-commerce sites having the branches in more than 20 cities of Nepal. It trains its seller
to go online and sell their products in the large scale. Daraz is employing more people on the

15
delivery of the product to reduce the lead time in delivery of the product. Currently Daraz has
more than 300 employees so that it can get partners and consumers development.

3.3.6 Process
In an ecommerce service proper process plan is very important. Without the proper process plan
the organization cannot get the better result. Process includes from the order of the products to
the delivery of the products. Daraz has the proper process to perform transactions. Daraz does
not have product of its own it only mediates the sale of the product. Daraz has the simple process
which can be understand by most of the users.

Customer visits the site of Daraz

i.e(www.Daraz.com.np)

Search for the product

Select the product

Check the product details

Select address and register

Confirm Order
Figure 6: Process of Daraz

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3.3.7 Physical evidence
With physical evidence in the marketing mix strategy the customers can actually see or
experience that directly contributes towards the perceived quality of the brand. The physical
evidence of Daraz is its website where the consumer sees its products brand and quality. Daraz
also shows its products with the clear images and also provides the proper description of the
products.

3.4 Growth Strategy

A business strategy helps businesses to improve their competitive status and determines the
performance of businesses in industry. Thus, growth is a must for businesses to survive in
developing industries. Businesses need to be in a continuous change and development process in
order to make progress.

Growth means both quantitative and qualitative development in businesses. Quantitative growth
means an increase in current output, sales revenue, product range, extent of resources (number of
employees, capital sum etc.) and investments. Qualitative growth is about developing the quality
of business elements. Therefore, it is difficult to explain qualitative growth with quantitative
terms.

However, since a business with qualitative growth also shows signs of quantitative growth, we
can say that quantitative growth can be the result of qualitative one. Growth is a way to tell what
a business wants to do in accordance with its goals and objectives. Growth covers technical and
administrative developments in order to reach the goals. In other words, it explains an increase in
size and amount of business elements, such as; make, property, technology, human etc.

Growth strategies of businesses is a very wide area to study and apply. Businesses try to reach
sale and profit rate they aimed thanks to growth strategies. Businesses can grow by merging with
other businesses or by buying them. Basically, growth strategy can be observed with two
different techniques:

1. Organic Growth
2. Inorganic Growth

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Daraz has their own strategy to grow and sustain in the market. During the early days of Kaymu,
before the acquisition of Alibaba and Daraz, their main focus was to increase their sellers and
vendors so that the customers would get more items in their website. There were all sorts of
products with no product guarantee and minimum product quality. There were more than 3000
sellers who were directly involved with Kaymu. The organization was more sales driven rather
than customer centric.

After the acquisition of Kaymu by Daraz, their strategies were changed. The quantity of sellers
was decreased from 3000 sellers to 800 sellers and their focus was changed on quality products
rather than sales driven. Similarly, after the acquisition of Daraz by Alibaba, the organization
focused more on quality of the product. They focus more on the customer experiences and their
performance indicator.

Growth
Strategies

Organic Growth Inorganic Growth

Intensive Growth Diversification Modernization Strategic Merger and

Strategy Strategy Strategy Partnerships Acquisition

Intensive Growth
Concentric Horizontal
with Market
Diversification Growth
Penetration

Intensive Growth
Conglomerate
with Market Vertical Growth
Diversification
Development

Intensive Growth
with Product Conglomeration
Development

Diversification

Figure 7: Growth Strategies

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Daraz is a medium where sellers can sell their product and buyers can purchase the product as
per their need. The organization does not produce any product on their own therefore the organic
strategy of growth with product development is not a proper strategy for them. Daraz focused on
the strategy of intensive growth with market development.

The intensive growth with market development strategy aims to develop new market divisions
for current business products. It is a strategy of spreading new products to targeted markets. In
other words, market development is a practical way of market penetration, determining new
usage areas for products. Daraz have not limit their service in the Kathmandu valley but also
covered other big cities like Pokhara, Dharan, Biratnagar and other major cities of the country in
order to increase their market reach.

Similarly, Daraz also has incorporated the modernization strategy in their organization. They are
using advance mechanism in their server to handle the request of the customer. Similarly, they
are providing different products at different prices so that the customers can choose from wide
ranges and minimum price of the same product

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Discussion and Conclusion

E-commerce in Nepal is still in its juvenile state. Thus, the major challenges for all the e-
commerce companies and mainly online shopping portals in Nepal are consistency, customers
trust, delivery speed, centralized market, competition with the offline stores, pricing issues etc. In
an economy like Nepal’s, there are only a limited people who prefer to save time over money.
This is the main reason why an e-commerce company whose goal is to save customers time and
make shopping experience simpler is still struggling to penetrate the market. Also, the digital
divide and digital illiteracy has limited the customer reach. Also, the general concept towards “e-
commerce” is selling things online, which is not only the case. The frauds, lack of product
quality, conning people online etc. puts a question mark on the trustworthiness of an e-commerce
site.

Daraz, being the largest e-commerce site of Nepal, is also facing the similar issues. Coming from
Kaymu to Daraz, and then being acquired by Alibaba, one of the biggest e-commerce portal of
the world, Daraz Nepal has changed its strategies from being sales driven to providing customer
satisfaction. To tackle the issues, Daraz has been consistently working on its marketing
strategies. Daraz believes that the customer satisfaction is the key for the success of e-commerce
in Nepal. Daraz provides promotional offers, discount vouchers, flash sales and hosts events like
11:11, Black Friday, and Mobile weeks where the prices of selective products is discounted to up
to 60%. Also, quality control, good trainings for the sellers, and policy that allows only branded
items but not replicas are the key factors that the consumers will get the product that they expect.
There are many processes that happens when a customer buys a product. Many things can go
wrong during the back end of the entire process. Daraz is trying to make sure that no transaction
ends in cancellation. Each unintended cancellation means a lost customer.

What Daraz is doing right

• Well established e-commerce site • Wider range of products

• Good Digital market penetration in • Frequent Promotional offers
social media • Frequent Events like 11:11, Black
• Backing of Alibaba Friday sale etc.
• Good Quality control protocols • Minimum listing fee from the sellers.

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 • Daraz Exclusive launches like • AliExpress framework based
PocoPhone F1 interactive Daraz app with tracking
• Daraz Express Delivery services
• Trainings for the sellers on
photography and stock updates.

Where Daraz is missing out

• Customer feedback: Daraz barely takes customer feedbacks after sales.

• Frequent Cancellations: Daraz does not give details about the unintentional cancellation
during the purchase process. The customer must be told the actual reason behind the
cancellation
• Fake discount offers: Although the prices are set by the sellers, Daraz must be strict
about the fake discount, especially during the big events.
• Tutorials for the customers: Daraz should create some “How to shop” tutorials so as to
reduce the unintentional purchases. Also, not many people actually know how the
promotional events like 11:11 work, so Daraz must provide some informative contents as
well.
• Express Delivery: Daraz depends upon its partners for cargo and delivery services. The
major issue a consumer faces is during the delivery period of the goods. An optimal
delivery protocol must be used.

Although Daraz is one of the biggest e-commerce sites in Nepal, due to various challenges, even
in 2018, Daraz still struggles to capture the market that an e-commerce portal should. Daraz
prefers digital marketing over offline. Quality products, limited and well-trained sellers and huge
investment from Alibaba with good schemes and promotional offers are the selling point of
Daraz. It can be a pioneer in revolutionizing the e-commerce market in Nepal.

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Appendix

Final Questionnaire:

1. How does Daraz works?

2. What are the business objectives over the next two years? Be as specific as possible, and
make sure to address the following goals:
a. Number of customers
b. Revenue
c. Profit
d. Market Share
3. What is the current market size and future market size in terms of geographic area?
4. Is the business or market affected by business cycles or seasons? If so, describe how is it
affected?
5. Does the organization compare its prices with its competitors?
6. Have the marketing and other strategies changed since Alibaba obtained Daraz?
7. What market segments are the targeting?
8. What are the growth strategies?
9. What are the competitive strategies?
References

1. Ahmet Ilhan, Y. D. (2015). Growth Strategies in Busınesses and A Theoretical Approach.

International Journal of Business and Management · March 2015.
2. Porter's Generic Strategies: Choosing Your Route to Success. www.mindtools.com.
Retrieved 2016-04-01.
3. Generic Competitive Strategies - strategy,levels, system, advantages, school, company,
business, system". www.referenceforbusiness.com. Retrieved 2016-04-01.
4. http://kathmandupost.ekantipur.com/news/2018-05-09/alibaba-makes-forays-into-
nepal.html