Some investors might look at southeast Asia’s lack of infrastructure for eCommerce and move right on by. Others, though, see something else: a massive opportunity.
That’s the story behind Daraz, a delivery startup based in Singapore that’s poised to facilitate deliveries for eCommerce activity in a handful of central and southeast Asian countries, The Wall Street Journal reported. With operations already up and running in Pakistan, Bangladesh and Myanmar, Daraz has raised $55 million from investors as it looks to expand into Sri Lanka, Nepal, Cambodia and Laos. Existing investor Asia Pacific Internet Group led the investment, and the CDC Group contributed as well.
While there are fewer consumers in these regions who are familiar with eCommerce and transactions involving any form of payment other than cold hard cash, Bjarke Mikkelsen, CEO of Daraz, posited in a statement that the potential for growth is staggering.
“Taking the eCommerce business model into these exciting markets is a fascinating journey,” Mikkelsen said. “Although Internet penetration is still relatively low, the market is developing fast and its potential is immense. By making Daraz a success, we are not only building a great business, but also creating jobs and infrastructure in the countries we operate in – that’s what makes it so exciting.”
Mikkelsen explained that Daraz makes use of what options are available in developing countries to get shipments where they need to be. In some cases, this involves connecting with scooter- and motorcycle-bound couriers to bridge the oft-troubling last mile in the delivery chain.
Part of the reason Daraz has piqued investor interest could be attributed to the lack of a major player in eCommerce deliveries in the region. Hanno Stegmann, CEO of the investment group Asia Pacific Internet Group, told the WSJ that few companies had made the headway Daraz has into this relatively resistant market.
“There are some smaller local players, but it is largely untapped,” Stegmann said. “That is one reason why we find it so attractive.”
While Daraz might be a major player in Asian markets in the future, they are certainly not the only retail delivery startup turning heads.
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