Daraz Nepal is a company fully owned by Alibaba Group and runs e-commerce platform to provide wide-range of products under a single roof. After undergoing a massive app redesign in 2018, and further developments in 2019, Daraz said that it has witnessed huge growth. Daraz had a number of campaigns in 2019. In an interview with Republica, Jashisha Gupta, chief financial officer of Daraz Nepal, explains about e-commerce business in Nepal, Daraz's business model and legal provisions, among other issues. Excerpts:
Can you please explain what an online marketplace is as well as Daraz's business model?
Marketplace is simply a place where people gather to buy or sell goods, like Asan, New Road, Mahabauddha, etc. While these places are actual locations, Daraz is an online platform with a wide assortment of products under one virtual roof. Through the marketplace model, Daraz provides the platform and technology to connect sellers and buyers all over Nepal. We also bring together delivery companies and payment partners to make this transaction possible. Furthermore, Daraz is planning to open the door for local Nepalese sellers to export as well.
What are the registration processes for an e-commerce business in Nepal?
Daraz, being an e-commerce business which is 100% foreign direct investment (FDI) company, we have registered the business through the Department of Industry. E-commerce is still new to Nepal, but the government has developed a national strategy to help make our ecosystem more efficient.
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What are the legal obligations Daraz has to follow to operate its business in Nepal?
Daraz is a fully owned subsidiary of a foreign company thus we must abide by relevant provisions of FDI. We follow all applicable legal provisions ranging from Income Tax, VAT, the NRB, Consumer Protection, Companies Act etc. Daraz is fully committed to be 100% compliant with all Nepalese laws, regulations and tax obligations.
How has the Consumer Protection Act affected the business of Daraz?
Consumer Protection Act aims to safeguard the right, interest and concern of consumers in terms of price, quantity, purity, and quality, etc, of the goods or services. Daraz is fully aware to uphold the spirit of the Act to provide the best customer experience where they buy with confidence without a shred of doubt. Daraz has an easy 7-day return and refund policy that compliments the provisions of Consumer Protection Act. When our sellers do not uphold our values and stringent standards, they are prevented from selling on Daraz.
There are still some buyers who are reluctant to shop online. What are the strategies Daraz is adopting to acquire those customers and retain them?
Being a service based industry; Daraz is dependent on customer satisfaction. Thus, our main priority is providing the best customer experience. We have more than 100,000 customers who use our app everyday and are return users. They are the ones who understand online shopping and trust Daraz.
To enhance the online shopping experience, we provide customers with tools that help make the best purchase decision. We provide various platforms to bridge the gap between sellers and buyers. Any query about the product can be asked directly to the seller through instant messaging. Reviews and ratings of other customers will also act as a guide for new buyers. Even if a customer receives the wrong order, we provide a customer friendly 14-day return policy for items listed under Daraz Mall, our premium section and 7-day for all other products. After a final verification, customers get a full refund in their bank account based on their choice. Thus, honest reviews of buyers will help us improve our service at the end and ultimately acquire and retain new customers.
What is the company doing differently to contribute towards the growth of e-commerce in Nepal?
We educate both sellers and consumers regarding e-commerce and marketplace operations through various mediums. Every month we train 500 new sellers on how to operate their business online through our university. And through tutorials, we help consumers make the best out of the Daraz app. So far, we have also created 5,000 new jobs and will be creating a lot more. We have also introduced card prepayment on our platform to provide a secured payment option promoting transaction through the banking channel helping the Nepalese economy.
