Chinese ECommerce Giant Alibaba Enters Pakistan Market

Alibaba Group (BABA.N) has bought the entire share capital of ecommerce platform Daraz, Rocket Internet said, according to Reuters. American ecommerce giant Amazon is already in Pakistan via its investment in another ecommerce platform Clicky.pk.

Daraz, founded in Pakistan in 2012, operates online marketplaces in Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal. The unit will continue to operate under the same brand following the sale to Alibaba, Rocket said.

Online sales in Pakistan's $152 billion retail market are doubling every year,  according to Adam Dawood of Yayvo online portal. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast.

Media reports suggest global e-commerce behemoth Amazon.com could purchase substantial stake in Pakistan's e-commerce site  Clicky.pk.

Amazon's Presence in Pakistan:

Amazon already owns about 33% stake in Clicky.pk through its acquisition in 2017 of Dubai-based online retailer Souq.  Souq acquired this stake in the Pakistani company in late 2016.

Today, Alibaba Group (BABA.N) announced the purchase of the entire share capital of ecommerce platform Daraz, according to Reuters.

E-Commerce Market Growth: 

Online sales in Pakistan's $152 billion retail market are growing much faster than the brick-and-mortar retail sales. Adam Dawood of Yayvo online portal estimates that e-tail sales are doubling every year. He expects them to pass $1 billion in the current fiscal year (2017-18), two years earlier than the previous forecast.

E-commerce in Pakistan is being enabled by increasing broadband penetration and new online payment options. Ant Financial, an Alibaba subsidiary, has just announced the purchase of 45% stake in Pakistan-based Telenor Microfinance Bank.

Payment Options: 

Mobile wallets, also called m-wallets, are smartphone applications linked to bank accounts that allow users to make payments for transactions such as retail purchases. According to recent State Bank statistics on branchless banking (BB) sector, mobile wallets reached a high of 33 million as of September 2017, up 21% over the prior quarter. About 22 percent of these accounts – 7.4 million – are owned by women, up 29% seen in Jul-Sep 2017 over previous quarter. Share of active m-wallets has also seen significant growth from a low of 35% in June 2015 to 45% in September 2017.

Summary: 

Online sales in Pakistan's $152 billion retail market are doubling every year,  according to Adam Dawood of Yayvo online portal.  The country's retail market is the fastest growing in the world, according to Euromonitor.  Expanding middle class, particularly millennials with rising disposable incomes, is demanding branded and packaged consumer goods ranging from personal and baby care items to food and beverage products. Strong demand for fast moving consumer goods is drawing large new investments of hundreds of millions of dollars.  Rapid growth in sales of consumer products and services is driving other sectors, including retail, e-commerce, paper and packaging, advertising, media, sports and entertainment. Potential downsides of soaring consumption include increased amount of  solid waste and decline in domestic savings and investment rates.

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Comment by Riaz Haq on May 14, 2018 at 5:03pm

Between the 18th and 19th centuries, the industrial revolution re-configured global economic and political power. As machines in Manchester began to spin the bulk of global textile production, within decades, India went from the world’s top textile exporter to a net importer. Between 1750 and 1900, India’s share of global industrial production slumped from 25% to 2%. It was not just because of western command over science and technology. It owed as much to political power and exploitative economic and trade policies. The impact of that shift – let us call it the historic ‘Manchester moment’ – still significantly determines where India stands vis-a-vis the developed world. India continues to regret missing out on the industrial revolution in time.

It is ironical then that we may right now similarly be losing out on another revolution. This contemporary ‘Manchester moment’ is about digital technologies and digital economy. As industrial revolution automated mechanical power, digital revolution is about automation of intelligence. Both represent fundamental shifts in human affairs. The digital revolution will as thoroughly transform our economic, social and political organisation as did industrial revolution.

This tragedy is unfolding right in front of our eyes, in a nation supposed to be in good political and economic control of itself. It also has sufficient basic competencies in digital technologies and conducting modern business. As it was in 18th-19th centuries, India’s failure is primarily political.

Missing the digital revolution

A decade or so ago, China trailed India in terms of IT or software technologies. How has China then suddenly become a digital super-power, posing a challenge even to the US? Digital technologies build over and subsume traditional IT and software, but are centrally about next-generation data-based systems.

It is simple. Just examine where in China (or US) all the cutting edge development of digital technologies – like artificial intelligence (AI), Interent-of-Things and blockchain – takes place. It is within super-large domestically-owned digital ecosystems like Baidu, Alibaba, Tencent and Didi. (In the US, these are Google, Amazon, Facebook, Apple etc). Unlike industrial technologies, digital ones are socially-iterative technologies that develop in real-world social and business settings, and not so much in laboratories. Innovating start-ups too get routinely bought and integrated into these ecosystems.

Over the last decade, China created ideal conditions for development of such large domestically-owned digital ecosystems, which catapulted China to global digital leadership. Both Chinese and US governments devote considerable public funds to partner with their private digital ecosystems for digital R&D.

And India? It first allowed Amazon to dump billions of dollars to close in on the domestic e-commerce market leader Flipkart. Not only were many other Indian e-commerce platforms suffocated in the process, domestic leaders like Flipkart had to off-load considerable equity abroad to obtain capital for matching Amazon’s cash burn. And now, most unthinkably, India is ready to sell its top e-commerce platform Flipkart to Walmart. Very soon, India’s two largest digital ecosystems will be foreign-controlled.

It is difficult to understand why India is inviting foreign corporations to own its digital ecosystems that are epicentres both of digital economy and development and control of digital technologies. It is difficult to think of a quicker path to total digital dependency.

Despite what most people think, digital platforms aren’t just ‘more efficient’ marketplaces. They are monopolistic intelligent agents that reorganise and control whole sectors, as they form backward and forward linkages – from manufacturing, inventory management and logistics, to payment and delivery. 

https://thewire.in/economy/does-flipkarts-sale-represent-a-manchest...

Comment by Riaz Haq on May 22, 2018 at 7:25am

#Alibaba's entry in #Pakistan hailed as boost for #DigitalEconomy. Experts predict #Islamabad likely to lower high taxes after #Chinese e-retailer's investment. #ecommerce #fintech #Daraz #AliPay #Telenor #Telecom #payments

https://asia.nikkei.com/Business/Companies/Alibaba-s-entry-in-Pakis...

KARACHI -- Alibaba Group Holding's recent purchase of a Pakistan-based online retailer has positioned the Chinese technology conglomerate to make inroads in e-commerce across South Asia, but the acquisition has raised expectations of robust growth in an industry that many experts say performs well below its potential.

Gaps such as the absence of a global online payments system can now be filled through Alibaba's Alipay service, said Shuja Rizvi, a Karachi based senior stock market analyst at Al-Hoqani Securities. "With the entry of a major player like Alibaba, Pakistan's policies will be molded to face global competition and our environment will hopefully improve," Rizvi said in an interview with the Nikkei Asian Review, citing one of the most commonly discussed benefits of Alibaba's arrival in the country.

Alibaba announced earlier this month a deal to buy Daraz Group, a Pakistani digital marketplace company, for an undisclosed amount. Since it was founded in 2012, Daraz has steadily expanded its services to Myanmar, Bangladesh, Sri Lanka and Nepal, say analysts who regularly track the e-commerce sector.

The acquisition comes as Pakistan prepares to receive more than $60 billion in Chinese investment under the China-Pakistan Economic Corridor -- a cornerstone of Chinese President Xi Jinping's Belt and Road Initiative. Alibaba's arrival in Pakistan also has been preceded by significant growth in cellular phone services and high-speed internet across the country in recent years, analysts say.

According to the Pakistan Telecommunication Authority, or PTA, the official regulator of the telecom sector, more than 73% of Pakistan's population, or roughly 149 million people, have cellular phone subscriptions. Especially important for the growth of digital businesses is the estimate of 56 million people, or more than 27% of the population, who subscribe to broadband services -- a key figure indicating the number of internet users, many of whom will be potential future online customers.

"Today, the number of internet users in Pakistan are more than the entire population of many countries around the world," a senior official with the Ministry of Information Technology and Telecommunication in Islamabad who requested anonymity because he was not allowed to speak to journalists, told Nikkei. "For investors like Alibaba, there is fertile ground for a strong future expansion."

Other PTA officials said that online retail businesses in Pakistan have much room to grow as they have an advantage over traditional retail outlets that have to invest heavily in commercial real estate to sell their products to consumers.

"In the most prized commercial markets of Pakistan -- in big cities like Karachi, Lahore or Islamabad -- rents have more than doubled for the top-end premises just in the last 10 years," said the Ministry of Information Technology official. "And the overhead costs -- especially rents -- continue to rise."

Barkan Saeed, chairman of the Pakistan Software Houses Association, the main representative body of the country's software industry, welcomed Alibaba's purchase of Daraz and entry into the country "as a major milestone" for Pakistan's e-commerce sector. Saeed said that while the government estimates the annual value of e-commerce transactions in Pakistan at approximately $600million, the actual figure could be five times that amount.

Comment by Riaz Haq on May 29, 2018 at 10:37am

TECHNOLOGY
Internet Giants Amazon, Alibaba Heading For Consumer Battle In India

https://www.investors.com/news/technology/amazon-stock-alibaba-ecom...

Amazon.com (AMZN) and China internet giant Alibaba Group Holding (BABA) are heading for a grand battle in India as they pursue e-commerce growth outside their home markets, according to a report Tuesday from brokerage Morgan Stanley.

The U.S. e-commerce leader has a "larger long-term need for global expansion," said the Morgan Stanley note to clients, with India emerging as a new battleground.

"For now, we see Amazon ahead in India, Alibaba ahead in Southeast Asia, and both players planting seeds in Latin America and Australia," the note said

Walmart (WMT) recently beat out Amazon for Indian e-commerce heavyweight Flipkart. Walmart agreed to pay $16 billion for Flipkart, a firm founded by former Amazon employees.

Alibaba Paytm Stake
While Morgan Stanley says the U.S. e-commerce firm leads Alibaba in India, the Chinese internet giant has a strong presence. Alibaba supports Indian online shopping site Paytm Mall, a rival of Flipkart, with a 36% stake.

Alibaba also has a presence in India through investments in BigBasket, an online grocer, and logistics firm XpressBees, the note says.

In Latin America, both companies are focused on Brazil, it adds.

Amazon India Buildout
The U.S. e-commerce leader has built out 60 fulfillment and distribution centers in India. Amazon also is expanding local video content in India for its internet streaming service.

Morgan Stanley says Amazon and Alibaba will be battling over a $5 trillion market opportunity in India, Latin America, Southeast Asia and Australia.

Amazon edged up 0.3% to 1,615 on the stock market today. Its stock has gained 61% from a year ago and 35% in 2018.

Alibaba stock rose 0.8% to 200.93 on Tuesday. Shares are up 61% from a year ago and 8.5% in 2018.

Comment by Riaz Haq on September 2, 2018 at 7:33am

With growing #ecommerce market, another e-tail platform kicks off in #Pakistan. Ezbuy is looking to tap the market, offering #Chinese goods as well as fruits grown in Pakistan. Moreover, its access to #Alibaba’s delivery system and #technology https://tribune.com.pk/story/1793165/2-increasing-pie-another-e-com...

Pakistan’s expanding e-commerce market has prompted yet another launch with Ezbuy becoming the latest addition in the online market space.

While experts suggests the size of the e-commerce market is hovering around the $1-billion mark, co-founder and CEO of Ezbuy, Kamran Shaukat, has taken a rather conservative approach. However, he still says Pakistan remains a goldmine when it comes to the e-commerce segment with growth steadily increasing.

“Pakistan is a goldmine when it comes to the e-commerce space,” Shaukat told The Express Tribune. “We are a $170 billion retail market of which 0.2% is e-commerce and this (share) is doubling each year.”
With payments gateways and on-demand services registering well with a bulging population, Pakistan remains on course for increasing growth in the online market segment.

Ezbuy is looking to tap the market, offering Chinese goods as well as fruits grown in Pakistan. Moreover, its access to Alibaba’s delivery system and technology will enable it to reach a wider consumer base, believes the company.“Ezbuy will start with China products, which account for almost 70% of e-commerce produced globally and then expand to sourcing from the US and Korea.”

Online platforms fail to attract large number of shoppers

Sharing plans for the structure, Shaukat informed that currently Ezbuy features cross-border and local products on the main page and a separate section called ‘Haute Shop’ for Pakistani fashion and lifestyle related products. He also revealed plans of expanding into a platform for more sellers to showcase their products.

Ezbuy is present in the Southeast Asian region, including markets of China, Singapore, Malaysia, Korea and Thailand.

Responding to a question on the competition that the venture would face, Ezbuy co-founder and Chief Strategy Officer Vincent Xue Bin said, “Ezbuy is a ship in the big ocean (Pakistan),” adding that his goal in the short-run is to build a strong customer relationship.

Seeing growth potential, retailers invest more in e-commerce

He said Ezbuy, just like any other retail shop, is not concerned with competition and prepared to face the challenges.

“We believe that it (Pakistan) is an underserved market in terms of lifestyle. I think we will have a strong contribution in building a better business in Pakistan,” Shaukat commented.

He said one of the differences between Singapore and Pakistan is that in the former market you can open up a business in an hour and here it takes “a good six weeks”.

The officials said the government could facilitate the process of opening a business, encouraging economic activity in the country.

On the topic of Chinese goods flooding Pakistani markets, Shaukat said currently, no country in the world can match China.

Comment by Riaz Haq on November 18, 2018 at 10:29pm

Technology Can Address Problems Plaguing Pakistan Economy By Henny Sender, Financial Times

#Technology can address problems plaguing #Pakistan #economy. #Investments by #China’s #Alibaba and promise of local start-ups highlight potential for innovation. #startups #ecommerce #fintech #exports #trade https://www.ft.com/content/6f2633d4-e7f9-11e8-8a85-04b8afea6ea3 via @financialtimes

In May Alibaba bought Daraz, the biggest local e-commerce platform in Pakistan, from Germany’s Rocket Internet for about $200m. By joining the platform, smaller manufacturers can reach new customers in China. Already the site has 6m registered buyers and thousands of sellers. Two months earlier, Alibaba’s Ant Financial paid $185m for a 45 per cent stake in Telenor Microfinance Bank — a deal that promises to improve financial inclusion and support small businesses in Pakistan......Shahid Mustafa, Telenor’s chief executive, says: “In five years we will be the largest tech company in Pakistan.”...... Already Telenor, which says it has 75,000 agents and 176 branches across the country, has recruited thousands of software engineers. At an incubator on the outskirts of Karachi, young companies are addressing even more daunting problems.......Muhammad Khurram founded Aqua Agro, which specialises in smart irrigation. Mr Khurram estimates that farmers who use his smart devices need half as much water, yet they increase yields of crops such as lemons by 30 per cent. He is also using crowdfunding to raise money. 
At the same time, another member of the same incubator, Fatima Anisha, has devised a technique to treat organic waste and turn it into fertiliser which improves yields without using harmful chemicals......While the efforts of the country’s start-ups are in many cases modest, they offer a vision of how the country — often with help from bigger Chinese technology groups — could start to find solutions.

Comment by Riaz Haq on November 21, 2018 at 5:13pm

82% of urban Pakistanis made online purchase in 2018, up 6% from 2017

https://profit.pakistantoday.com.pk/2018/11/20/82-of-pakistani-urba...

A report released by Nielsen “2018 Connected Commerce” has revealed 82% of consumers having access to the internet in urban areas have made an online purchase, up by 6% from 2017.

According to Nielsen, the growth of e-commerce in the last few years because of the rise in internet and smartphone penetration, especially in the country’s urban areas has contributed to the online sale of particular categories.

Fashion accounted for the largest slice of online transactions of 40%, followed by travel 31% and IT 29% respectively.

The report outlines consumers’ online purchasing habits and it disclosed categories which posted significant growth in e-commerce activity included restaurant deliveries 24%, 22% in beauty and personal care products, books and music 28% respectively.

The report determined that consumers are more conducive to making online purchases when offered a couple of purchasing options and quality assurances.

Furthermore, the report highlighted approximately 55% of the consumers stated that a money back guarantee for products not matching what was ordered would encourage them to buy online.

Also, 49% of consumers shared that free delivery for purchases above a minimum spend would contribute positively impact their buying decision.

Managing Director Nielsen Pakistan, Quratulain Ibrahim said, “Travel, fashion and IT are typical categories for first-time online shoppers, but as their familiarization, comfort and trust levels increase, their category range expands.

They start looking into areas like beauty, personal care and baby products, and then move even wider afield to restaurant deliveries or meal-kit delivery service categories.”

“This is evident in the significant jump we have seen in online purchasing within food delivery in recent years, especially in urban areas and city centres,” she added.

Global online sales in 2017 totalled $2.3 trillion or 10.2% of total retail sales and is expected to reach 17.5% by 2021.

“Online retail development correlates strongly with constantly improving internet access, especially in mobile-first communities.

With connectivity and digital development exploding in Asia, it is no surprise that the fastest growing e-commerce markets are located there,” said Nielsen.

The global online sales of fast-moving consumer goods (FMCG) products are growing four times faster than offline sales, and Pakistan, despite facing infrastructural impediments, is expected to follow the same route but at a varied pace, according to “Nielsen Future Opportunities in FMCG E-commerce” report.

As per the aforementioned report, it surveyed the current growth drivers of FMCG e-commerce in 34 markets and projected that the global online sales will touch as high as $400 billion by 2022.

Nielsen said, “Pakistan being a developing country with the largest youth population (which is more tech-savvy compared to older generations) is also expected to adopt the emerging e-commerce trends.”

“Some of the regions in Pakistan, especially rural areas have been fairly isolated and may explain why 24% of consumers strongly agree that internet connectivity is a barrier to online shopping while 37% somewhat agree,” it added.

According to the State Bank of Pakistan’s “Annual Performance Review 2017-18” report released last month, the volume of transactions in FY18 processed via retail e-Banking channels i.e. real-time online banking (RTOB), ATMs, POS, mobile phone banking, internet banking etc touched 756.5 million valued at Rs47.4 trillion.

The number of local e-commerce merchants registered with banks reached 1,094 and consumers carried out 3.4 million online e-commerce transactions valued at Rs 18.7 billion.

Comment by Riaz Haq on May 18, 2019 at 9:48am

How technology is driving financial inclusion around the world

https://www.worldfinance.com/banking/how-financial-technology-is-dr...

-----------------

The vast majority of unbanked adults live in developing economies. Compared with developed nations, banks in these regions tend to have far fewer branches. For instance, in Pakistan there were fewer than 11 commercial bank branches per 100,000 adults in 2017, compared with 31 in the US, according to the World Bank.

----------

This financial flexibility helps families meet unexpected economic setbacks and allows entrepreneurs to invest in their businesses and create jobs, Wald added. “Most importantly, digital financial inclusion allows economies to grow stronger and more inclusive.” For this reason, countries like Pakistan have come up with financial inclusion strategies in recent years. Pakistan’s government adopted a National Financial Inclusion Strategy (NFIS) in 2015 that aims for 50 percent of adults to have bank accounts by 2020 – including 25 percent of women.

Out of Pakistan’s population of around 210 million, only 21 percent of adults had bank accounts in 2017, according to the World Bank. But with high mobile penetration rates, this could soon change: research by Financial Inclusion Insights (Fii) found that 84 percent of men and 71 percent of women in the country have access to a mobile phone.

--------------------

201m
Population of Pakistan
21%
of adults in Pakistan had a bank account in 2017
34%
of men in Pakistan had a bank account in 2017
7%
of women in Pakistan had a bank account in 2017


--------

Both Smith and Wald cited India as something of a success story for financial inclusion. Its cash-based economy quickly digitalised over recent years, and the rate of bank accounts opening has been “absolutely extraordinary”, Smith said.

In neighbouring Pakistan, however, many locals are still wary of financial institutions. In a 2015 survey by Gallup Pakistan, 65 percent of respondents said they would rather deal with someone they knew than a bank.

Rehan Akhtar is the chief digital officer of Karandaaz, a non-profit that promotes financial inclusion and access to finance for micro, small and medium-sized enterprises (SMEs) in Pakistan. He told World Finance that convincing Pakistanis to adopt digital financial services over cash would require new policies, including digitalising all government transactions and enabling an environment for e-commerce transactions.

NFIS has prompted a number of new initiatives, including mobile bank account schemes, biometric identity verification and the promotion of fintech services. These policies have already strengthened the country’s microfinance sector.
In Pakistan, Akhtar said SMEs account for over 90 percent of the country’s 3.2 million businesses and 30 percent of GDP. “As a consequence, growth of SMEs can have a direct impact on achieving the targets of poverty alleviation and sustainable growth for Pakistan’s economy.”------------------

Investors are increasingly realising the opportunity unbanked populations offer. For instance, Chinese payment provider Ant Financial bought a 45 percent stake in Pakistan’s Telenor Microfinance Bank (TMB) for $184.5m in 2018. Ant Financial aims to develop mobile payments and digital financial services at TMB, which owns Easypaisa.

Stephen Rasmussen, who leads CGAP’s work on sustainable digital financial-services ecosystems, argued in a blog post that Ant Financial’s interest in Pakistan could be a game-changer by “spurring other businesses to become more ambitious about increasing mobile wallet uptake and use” and “[establishing] an investment benchmark in the market that could encourage additional investment into other fintech businesses”.

Comment by Riaz Haq on May 5, 2021 at 6:33pm

#US-based retail giant #Amazon adds #Pakistan to the Approved Selling Countries List. #Pakistani sellers and #exporters will be able to use world's largest #ecommerce platform. It will energize ecommerce in Pakistan and boost the country's #exports. https://www.techjuice.pk/pakistan-in-amazon-approved-selling-countr...

Sellers get excited! Buyers, don’t warm your credit cards up just yet!

Pakistan has finally bagged a position in the Amazon approved selling countries. Accounts can be made using Pakistani details.

Standing ovation to the efforts of the people behind this incredible achievement, Aisha Moriani (Joint Secretary, Ministry of Commerce), Omer Gajial (Ex Amazon Category Development Head for Amazon North America division), and Shoaib Sarwar (deputy Consul General, Consulate General Pakistan, Los Angeles) along with the team members of NECC (National Ecommerce Council) and Badar Khushnood from Pakistan Software Houses Association, just to name a few.

They have been working day and night in getting Pakistan added in Amazon’s approved sellers list, and their hard work has paid off!

This milestone will drastically change the game and result in a new era of economic growth as more sellers will visit the platform than ever before.

Previously, Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood emphasised that the trend of e-commerce had accelerated in recent years with the development and easy accessibility of internet. He added that due to the Covid-19 pandemic, the importance of e-commerce had increased manifold, making it an extremely vital sector of the economy.

Now that Pakistan has been added to the approved sellers list of Amazon, one can only pray and hope for this to  steer in the positive direction for the development of the country!

Comment by Riaz Haq on December 1, 2021 at 7:01am

#Alibaba-backed #Daraz #ecommerce to double retail volume next 5 years thanks to its lead in emergent #SouthAsian markets. Online retail accounts for just 2% of GDP in 5 countries( #Pakistan, Bangladesh, Sri Lanka, Myanmar & Nepal -- vs 20% in Indonesia
https://www.bloomberg.com/news/articles/2021-12-01/alibaba-s-south-...

Daraz has invested more than $100 million in Pakistan and Bangladesh over the past couple of years. Some of that has gone into building its own delivery network. It now handles about 70% of its deliveries and has delivered more than 150 million packages since it started. It plans to offer logistics as a separate service as well, and is testing buy-now-pay-later services in Sri Lanka before a wider rollout.

------------
Daraz Group, the e-commerce retailer backed by Alibaba Group Holding Ltd., expects to continue doubling retail volume over the next 5 years thanks to its lead in emergent South Asian markets.

Daraz should maintain a compound annual growth rate of about 100% in e-commerce deliveries, sustaining the pace of the past four years, Chief Executive Officer Bjarke Mikkelsen said in an interview. Revenue growth has also doubled on average in the same period, he said.

South Asia’s e-commerce markets are picking up as venture capital firms ramp up investment. Online retail accounts for just about 2% of the gross domestic product in the five countries in which Daraz operates -- Pakistan, Bangladesh, Sri Lanka, Myanmar and Nepal -- compared with 20% in Indonesia, the former Goldman Sachs Group Inc. banker said.

“We really see the digital economy take off,” Mikkelsen said at his Karachi office overseeing the Arabian Sea. “There’s plenty of runway.”

Daraz has amassed 35 million users in the five countries and expects to hit 100 million active customers well before 2030, he said. They will feed into Alibaba’s target of reaching 2 billion global consumers by 2036, about a quarter of the world’s current population. The Chinese e-commerce leader has built a portfolio of companies from Turkey to Russia and Asia to help achieve the target.

There is no active plan but “it’s a possibility” that more investors may be brought into the company in the future, said Mikkelsen. Alibaba-backed Trendyol drew capital from SoftBank Group Corp. and two Gulf wealth funds in August.

Daraz was the largest player in South Asia excluding India, said Ali Farid Khawaja, chairman at KTrade KASB Securities Ltd. “In Pakistan, there is no e-commerce company that even comes close to them,” he said. “Besides the scale, they are the only one which has made supporting infrastructure, including warehouses and logistics.”

Comment by Riaz Haq on June 18, 2022 at 7:29am

Alibaba extends logistics arm to Pakistan for e-commerce unit Daraz | TechCrunch


https://techcrunch.com/2022/06/17/alibaba-logistics-arm-pakistan-da...


Cainiao, the logistics service operated by Alibaba, is launching two automated distribution centers in Karachi and Lahore as its first entry into Pakistan, it announced on Friday.

Alibaba’s overseas expansion has manifested in a mix of investment and integration over the past decade. In 2018, the e-commerce titan boughtPakistan’s e-commerce platform Daraz for an undisclosed amount. It controls the online shopping service Lazada, which is neck to neck with Shopee in Southeast Asia, and owns a stake in Turkey’s Trendyol as well as Indonesia’s Tokopedia.

Founded in 2012, Daraz was born out of the internet venture builder Rocket Internet like its sibling Lazada. It delivers to Pakistan, Bangladesh, Sri Lanka, Nepal, Myanmar and other countries in the region. Daraz declined to disclose how many active users it has, only saying it has “served a potential user base of 500 million people” and grew 85% in gross merchandise volume (rough metric for sales in e-commerce) over the last two years.

The smart distribution centers will come with a suite of Cainiao’s in-house tech like electric control units, software-based programmable logic controllers (PLC is critical for warehouse automation but traditionally is hardware-powered, Caniao told TechCrunch) and a computing solution that promises to combine the capabilities of cloud and the speedy runtime on the edge.

The suite of warehousing solutions, said Cainiao, could reduce manual labor by half and increase human productivity by 100%.

Given Alibaba’s far-reaching footstep worldwide, it won’t be surprising to see Cainiao following the parent into more countries. Cainiao already operates nine large overseas distribution centers across Europe, Asia and the Americas and has plans to ramp up operations in Southeast Asia, South Asia and Europe, the company’s vice president of technology Ding Hongwei said in a statement.

Integrating Cainiao into Alibaba’s sprawling e-commerce portfolio indeed looks to be the plan.

“Logistic network development is a priority in our globalization strategy as logistics is the fundamental infrastructure supporting a high-quality consumer experience based on integrated product supply from cross-border and locally,” Daniel Zhang, CEO of Alibaba, said on the firm’s December earnings call.

“Cainiao has been developing logistic network in Southeast Asia and Europe, leveraging the commerce use cases presented by Lazada, AliExpress, and the Trendyol.”

AliExpress is Alibaba’s cross-border e-commerce platform that mostly connects Chinese sellers to global consumers.

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