The Den

Business-lines
and Plan
Introduction to The Den
The Den will start its business line for e-
commerce platform by keeping in view the
different opportunities in the prevailing market
of Pakistan. In addition to mark foot-prints in
offline-market, it will also grow the retailer
network in all around the country.
The Den will be online e-commerce platform
in Pakistan that will offer convenient and
seamless shopping to users who are looking to
shop anytime and anywhere. With wide range
of product categories to choose from, The Den
will offer some of the best deals at competitive
price.
Vision
Be innovative and leader of e-commerce
industry of Pakistan.
Mission
For innovation, conduct the rigorous and
realistic analyses of challenges, potentials and
opportunities of e-commerce industry of
Pakistan, and design the business-lines.
For leading the industry, continue to believe in
sustainability, reliability and concrete strategic
orientations.
E-commerce Market of Pakistan wallets, stated the SBP in its annual report for
FY18.
E-commerce is booming in Pakistan due to
relatively larger penetration of internet, which Market estimates put the share of postpaid
is further making it easier to do business by cash-on-delivery (COD) settlements at around
lowering the cost of transaction. 80-90% of the total volume and about 60% of
the total value of e-commerce in Pakistan. It
According to a McKinsey Global Institute
suggests that the total e-commerce activity in
(MGI) report, Pakistan can experience an
FY17 and FY18 may have touched Rs. 51.8
increase in its gross domestic product (GDP)
billion and Rs. 99.3 billion respectively.
by a cumulative seven percentage points
Moreover, according to various figures, the
(roughly $36 billion) and create around four
sale of e-commerce industry in Pakistan is
million new jobs during 2016-2025 via an
expected to reach 140 billion rupees by 2020.
increase in the use of digital financial services
alone.
Pakistan’s e-commerce market almost
doubled in fiscal year 2017-18 as
152 million 121 million
digitalisation paved the way for the services
cellular internet
sector to increase its contribution to the GDP subscribers users
from 52% to 60%, according to the State
Bank of Pakistan (SBP). With the entrance of
Chinese digital giants such as Alibaba (through
acquisition of daraz.pk) and Ant Financial (via
a 45 percent stake investment in Telenor
Microfinance Bank), the e-commerce
149 M
landscape of Pakistan can be expected to
by 2020
evolve rapidly. 99.3 M
FY 18
Online users
The country has got 152 million cellular 51.8 M
subscribers, almost 73% of the total FY 17
population of 207 million, out of which 59
million are 3G/4G subscribers with total
internet subscribers at 62 million. E-commerce sales

E-commerce sales
Sales of local and international e-commerce
merchants reached Rs 40.1 billion in FY18
compared with Rs 20.7 billion in FY17, an References to stated facts (Ahmed, 2017;
encouraging growth of 93.7%. However, the Hanif, 2018; Khan, 2018; State Bank of
data only covers transactions made via digital Pakistan, 2018; The News, 2018)
channels such as credit/debit card, interbank
funds transfer, prepaid cards and mobile
The Den business-lines
There are certain challenges and potentials of e-commerce industry of Pakistan, which pave the avenues of opportunities. Keeping
in mind the vision and mission, The Den by considering these challenges and potentials as opportunity will streamline its portfolios.
Opportunities/challenges/potentials The Den business-lines
Foremost challenge is related to bring online the product and The Den E-commerce website/app
services of offline retailers, Pakistan has a large retail market The Den will offer 1000+ products and services of different
with over 900,000 merchants countrywide, while there are over segments including female accessories, electronics and branded
2000 merchants offering online products majorly using different products, on its very first launch.
platform.
a) which pave the avenue that there are wide range of It will also work on to design an online platform in the website /
products and services of these offline retailers which still app, where the offline retailers may get open an e-shop.
need consideration.
b) going on, there is still potential in market to capture the
rest of offline retailers to provide them an online
platform.
c) as the e-commerce industry is relatively young and there
is much potential as well in it, and still a large market is
untouched.
Opportunities/challenges/potentials The Den business-lines
Second challenge is related to grab the potential segments of The Den e-commerce app continue… (potential segments)
market, e.g.
a) In products, there is large potential in the female-related There will be a dedicated part in app to promote females-related
products in Pakistan. The online shopping rate of females products and services. 500+ products and services will be in line
is comparatively high as compare to males. on the first launch of the website/app.
b) In products, there is potential in unstitch-garment
product. The often dress in Pakistan is Shalwar-Kameez, The Den will be plan to negotiate with major factory-shops of
which is often bought unstitched and then tailored. The unstitch-garment to sale online.
major factories of unstitch-garment are in limited cities
i.e. Faisalabad. The unstitch-garment from these factory- More than 25+ mobile specific accessories and 10+ general
cities is distributed in rest of country, which incurs great accessories related to different mobile brands, will be in line on
expense of transportation and intermediatory the first launch of the website/app.
commissions.
c) In products, the other potential segment of great The Den on the first launch of the website/app, it will offer 200+
consideration in e-commerce is mobile phones and its service deals of vendors of Islamabad / Rawalpindi, while it will
accessories. In Pakistan, there are 152 million cellular be in working on business development teams in Lahore and
subscribers, almost 73% of the total population of 207 Karachi for service vendors.
million.
d) In services, demand for beauty parlors and spas has been
on a constant rise as increasing number of people have
improving lifestyle and greater health and grooming
awareness. In the past, beauty parlors and spas were
mostly focused on women but in recent times this sector
is also paying closer attention to men. According to SBP
report on this sector, about 20% of the beauty salons in
this sector cater to more than 100 customers per month.
The 77% beauty parlor and saloons are clustered in 3-
major cities of Pakistan i.e. Islamabad/Rawalpindi,
Lahore and Karachi. The discounted vouchers on these
services has vital potential in the market. Besides, beauty
parlors and spas the other services i.e. restaurants, cafes
and dentistry clinics have also great potential of return in
e-commerce as well.
Opportunities/challenges/potentials The Den business-lines
Third challenge is related to the logistics of service voucher, the The Den e-commerce app continue… (service-counter)
general model of service vendor in market is that the customer
purchases a discount-voucher of a service vendor from the e- The Den will use e-wallet for placement of order and redemption
commerce app/website and then redeem it. In this model, there of voucher, in which customer will pay directly to vendor and
are two specific issues: The Den will just retain its margin.
a) Delivery charges are incurred for delivery of voucher to
the customer
b) Vendor are reluctant to provide discount-vouchers,
because in market the general model does not allow the
vendor to receive direct amount from customers.

Service Service
Vendor
deals Customer
Shop
The Den Location
e-
commerce
app
Service Individual Corporate
Vendor e-Wallet e-Wallet
e-Shop

The Den
e-Wallet
The Den e-commerce app (Mechanism of the Deal)
Finalize a deal The Den will normally negotiate a discounted deal with vendor ideally at 50% discount on the original price and with limit
of 250 products/service vouchers against each deal. However, The Den will be flexible in negotiating a deal with valuable
vendors. Service charges for promotion and publicity of vendor brand varies from one offering to another depending on
the image of the brand/product/service, however, generally The Den will charge 30% of the service / product price as the
service charges. Once a mutual agreement will reach with the vendor, a standard form of deal will be sent for signatures
and locking of deal. In case a product has been offered, The Den will also request an inspection of the product before
signing of the deal letter.
Product With mutual consent and as per the term and condition of deal letter, The Den will arrange professional photographer to
photography visit vendor site to take images for uploading on the app.
Deal buying cycle The Den team of professional designers and developers will make deal page of vendor’s service/product which will
explain the deal being offered to the consumers with professional written content to promote vendor brand, immaculate
photos of vendor brand and outlet and a guided map for customers to easily reach at the vendor location (in case of service
deal).

Vendor Business development

Photography
The Den Content-writing
Teams
Technical

The Den
app

Customer
The Den e-commerce app (Mechanism of the Deal) continue…
Deal promotion At the time when the deal will be live on the app, The Den will send newsletter to the registered subscribers as well as to a
group of active internet users to allow reaching of the deal offered to the ultimate consumers to boost sales. The Den will
continue to promote the deal of vendor service/product on The Den facebook page during the deal period. The Den will
also provide with certain fee the research tools to give vendor an analysis of consumer behavior who will avail the deals
offered on the website/app. Moreover, The Den will also promote offered deals on social medias and other viable networks
to boost the sales.
Order placement The customer during the active days of deal will place the order on The Den website/app by following the website/app
and payment architect. The customer will have the two-options for payment, cash-on-delivery and purchase through The Den e-Wallet.
options In case of service voucher, the customer will have only option to place order by payment through The Den e-Wallet.
Order After placement of order by customer, the customer will receive a confirmation call from The Den customer-support team.
confirmation After the confirmation of customer, the order will be further proceeded for delivery.
Product delivery The Den logistics team will proceed the confirm order for delivery all around the country.
Service voucher In case of a service deal, the customer will not receive service voucher of vendor through courier, rather the voucher will
redemption be virtually delivered to the customer account in The Den website/app. The customer by visiting the service vendor shop
will be available to redeem the same voucher.
Customer The Den will provide 9AM – 6PM customer support through calls, emails and live chats.
support

Deal
promotion

Order
placement Service
Product
voucher
delivery
redemption

Customer
Support
The Den e-commerce app (Mechanism of the e-Shop)
Receival of The Den will intend to provide an option to the offline shop retailers to make e-Shop on The Den website/app. The process
request will follow as, The Den will receive a request from the offline retailer for e-Shop. Any offline retailer would be able to
place request for e-Shop through direct call, email and by using The Den website/app.
Screening of On receival of request, The Den business development team will visit the shop of offline retailer to confirm the quality of
vendor product/service and allied infrastructure.
e-Shop opening After passing through screening process, The Den technical team will create the protocol on The Den website/app for
particular e-Shop, then the e-Shop holder according to terms and conditions would be able to upload the products/services.
The e-Shop holder would be insisted to offer product/service on The Den on discounted rates as compare to offline
customer.
Delivery thru Once customer will place the order on e-Shop by using The Den app, the e-Shop holder will arrange the courier delivery of
courier product to customer by using the courier accounts of The Den given to e-Shop holder.
Pick-up from If the customer would want to pick-up by his/herself from the retailer shop to cut-off the delivery charges, the same facility
retailer shop will as well be given to customer. But in case of pick-up by customer, the customer would have to pay against order
through The Den e-Wallet.
Customer service The Den will provide centralized customer service to all customers of e-Shops. The customer support team however will
remain in contact with the e-Shop holder for any assistance.

Vendor
request
Screen-
ing
Opening
of
e-Shop Customer

Customer
support Delivery/
Pick-up
 Opportunities/challenges/potentials
Forth challenge is related to the payment method, the major
reason behind cash on delivery (COD) of up to 90% is that
online platforms have not yet succeeded in building trust
among customers.
The major reasons behind low digital payments in e-commerce
are:
a) There are different digital platforms, but there is no such
an agency which may provide all these digital platforms in
one-window for customer convenience and suitability.
b) There is no such digital platform in Pakistan which may
provide Purchase Protection to buyer in digital payment.
Non-of international platform of this nature i.e. Paypal is
offering services in Pakistan.
The Den business-lines
The Den e-Wallet
Working on to generate a super API of different digital payment
vendors, so to create a one-window digital platform which may
offer and accept all modes of digital payments.
Then we will provide this super API to e-commerce vendors to
offer their customers for digital payment.
In the The Den e-wallet, the Purchase Protection to buyer shall be
given, 5 days post-delivery time shall be given to the buyer to
raise the dispute against purchase. Till the solution of dispute, the
purchase-amount shall remain with The Den and on resolution of
dispute the payment shall be disbursed to either party.

Merchant accounts in-progress with

following vendor for Super API

 EasyPaisa
 MobiCash
 HBL Connect
 Zong Timepay
 1Link (provide service of
interbank network in
Pakistan)
The Den e-Wallet (Mechanism for third-party e-commerce app)
Client hunting The business development team of The Den will hunt the third-party e-commerce client for digital payment method under
the window of The Den e-Wallet.
Corporate e- Once the client agrees on terms and conditions of The Den, the client will be given a Corporate e-Wallet account.
Wallet
Integration of The The Den super API will be integrated on the client’s e-commerce website/app for e-payment method through The Den
API e-Wallet.
Transaction cycle The customer of client’s website/app will first create an Individual The Den e-Wallet. Then, customer will place order on
client’s website/app and will make the payment through his/her Individual e-Wallet. The payment will come first in the
main The Den e-Wallet, then after 5-days of purchase protection time (starts after delivery of product/service to customer),
the same payment will be automatically transferred to client’s Corporate e-Wallet. In case of any dispute against
order/service raised by customer within purchase protection time, the payment will retained and, after resolution of dispute
among client and customer, the payment will then be made to either party.

Client

Corporate
e-Wallet Super
API

Transaction
Cycle

Individual The Den Corporate

e-Wallet e-Wallet e-Wallet
The Den e-Wallet (Mechanism for offline-retailer)
Retailer hunting The business development team of The Den will hunt the offline-retailers for digital payment method under the window of
The Den e-Wallet.
Corporate e- Once the retailer will agree on terms and condition of The Den, the retailer will be given a Corporate e-Wallet account.
Wallet
Transaction cycle The customer will purchase the product/service from the retailer shop and will pay through his/her Individual The Den e-
Wallet to retailer in its Corporate e-Wallet account. In this process, the payment will immediately be transferred from
customer e-wallet to retailer e-wallet. The incentive in this mode of transaction for customer and retailer will be, that both
will get cash-back according to terms and conditions.

Retailer

Corporate
e-Wallet

Transaction
Cycle

Individual Corporate
e-Wallet e-Wallet
Opportunities/challenges/potentials
Fifth challenge is related to logistics, longer delivery times are
also often cited as a major deterrent to the wider adoptability
of the e-commerce channel. Delivery times are usually
affected when either a third-party logistics partner fails to
deliver on time, or the inventory management system of sellers
proves inadequate to fulfill the flexible needs of the electronic
channel.
The Den business-lines
The Den Retailer Network (delivery-counter)
The Den will intend to start the delivery-counter network in all
around the country. 5000+ retailers will be a resource with The
Den on its launch.

Customer

Deliver-
counter
option

Logistics

Pick-up

Delivery
by The
Den rider
Opportunities/challenges/potentials The Den business-lines
Sixth challenge is related to the capability and capacity building The Den e-commerce solutions
of e-commerce SMEs, in Pakistan around 90% SMEs do not The Den will intend to provide e-commerce solutions.
survive its very first year due to lack of capabilities to perform Following solution will be provided on terms and conditions:
the business well. Due to increase of e-commerce industry in the  Digital marketing
country, the SMEs sector of e-commerce is also facing the same  Product research
issues of performance.  Deal design
 Packaging and logistics
 Procurement

Digital
Procurement
marketing

Solutions

Research &
Logistics
Deal design
 Other business-lines
The Den Retailer Network (Mobile phone distribution)
Keeping in view the potential of mobile market in Pakistan, The Den will develop the mobile phones retailer network.
Around the country, there will be 5000+ retailers in line with The Den to sale the provided mobile brands, on its very first launch.
THE DEN BUSINESS-LINES
The Den E-commerce App
The Den e-Wallet
The Den Retailer Network
The Den E-commerce Solutions
E-commerce activities
E-payment solution
Sale of The Den prepaid cards, Sale of mobiles, Delivery counter
Consultancy

RESOURCES OF THE DEN ON LAUNCH

Retailers 5000+
Mobile sale retailers 1800+
District relationship officers 26 districts
Merchant/vendors of products/services for The Den app 160+
Product deals 700+
Service deals 300+
University/college ambassadors 69 in respective universities/colleges

AT THE END OF 3 MONTHS

Order rate/day on The Den app 70+
App downloads of The Den app 45k+
Daily active users of The Den app 20k+
INVESTMENT REQUIREMENT
Sr. Head Require Amount (Rs.)
1. Website/app development One time 500,000
2. Office Furniture One time 500,000
3. Laptop systems, 10 x 50,000 One time 500,000
4. Initial investment for product purchase, e-commerce, Amount in 1,500,000
mobile and accessories circulation
Total 3,000,000

Sr. Head Require Amount (Rs.)

1. Website maintenance staff, 2 staff x 30,000 Per month 60,000
2. Operation Manager, 1 x 80,000 Per month 80,000
3. Marketing Manager, 1 x 80,000 Per month 80,000
4. Business Development Team, 3 BDs x 40,000 Per month 120,000
5. Operations team, 3 x 30,000 Per month 90,000
6. Finance Manager, 1 x 60,000 Per month 60,000
7. District Relationship Officers, 10 x 15,000 Per month 150,000
8. Office Rent Per month 60,000
9. Utilities bills Per month 30,000
10. Marketing budget Per month 150,000
Total 880,000
Total 6 Months Expense (above total x 6) 5,280,000
RETURNS
Sr. Head Unit Amount (Rs.)
1. Average product sale at the end of 6 months = 150 orders E-commerce 3,060,000
per day,
At end of 4th month, 70 order per day x 30 days x 300 =
630,000
At end of 5th month, 120 order per day x 30 days x 300 =
1,080,000
At end of 6th month, 150 order per day x 30 days x 300 =
1,350,000
2. Average mobile sale at the end of 6 months = 1000 orders Mobile and 3,850,000
per month Accessories
At end of 1st month, 100 mobile sale x 1400 = 140,000 Sale Network
At end of 2nd month, 150 mobile sale x 1400 = 210,000
At end of 3rd month, 200 mobile sale x 1400 = 280,000
At end of 4th month, 500 mobile sale x 1400 = 700,000
At end of 5th month, 800 mobile sale x 1400 = 1,120,000
At end of 6th month, 1000 mobile sale x 1400 = 1,400,000
Total return at the end of 6 months 6,910,000

Sr. Description Amount (Rs.)

1. Variable expense for 6 months 5,280,000
2. Return at the end of 6 months 6,910,000
3. Profit 1,630,000
References
(Ahmed, 2017; Hanif, 2018; Khan, 2018; State Bank of Pakistan, 2017, 2018; The News, 2018)

Ahmed, S. O. (2017). Cracking E-commerce 2.0: Whitepaper on taking 500,000 merchants online in Pakistan. Retrieved from
https://karandaaz.com.pk/wp-content/uploads/2017/02/Cracking-E-commerce-2.0.pdf
Hanif, U. (2018, October 28). Pakistan’s e-commerce market nearly doubles to Rs 40b. Tribune. Retrieved from
https://tribune.com.pk/story/1835428/2-pakistans-e-commerce-market-nearly-doubles-rs40b/
Khan, S. A. (2018, March 26). Pakistan ’ s booming e-commerce market is just getting started. Dawn. Retrieved from
https://www.dawn.com/news/1397446
State Bank of Pakistan. (2017). Research Report on Beauty Parlors and Spas. Karachi. Retrieved from
http://www.sbp.org.pk/departments/ihfd/Sub-Segment Booklets/Beauty Parlors and Spas.pdf
State Bank of Pakistan. (2018). Online Payment Platforms in Pakistan – A Case of B2C E- Commerce: In First Quarterly Report for
FY18. Karachi. Retrieved from http://www.sbp.org.pk/reports/quarterly/fy18/First/Special-Section-2.pdf
The News. (2018, September 18). Pakistan is one of the fastest growing E-commerce countries. Retrieved from
https://www.thenews.com.pk/latest/370311-pakistan-is-one-of-the-fastest-growing-e-commerce-countries