“Daraz.

pk as an Online Retailer”

Submitted by:

 Arshad (12461)
 Mufti Rahat Ali (12781)
 Waqas ul Hasan(10753)
 Syed Umair Ali(12412)
 Soubia Naz (13334)
 Maham Amjad (13370)
 Ali Akbar Nizar Ali (13135)
 Danish Akbar (15639)
 Muhammad Adeel (9733)

Submitted to Sir. Ghazanfar Yar Khan

 Acknowledgement

First of all, we are thankful to Almighty Allah who is the Most Merciful and the Most Beneficial

without whom we would not be here.

We are very thankful to their facilitator Sir. Ghazanfar Yar Khan who has given us in-depth

knowledge from his personal experience and expertise about this course. It is because of his

guidance that we were determined and motivated to carry out thorough research on this

topic.

It was a great pleasure for all of us to work on this report. Working on this report gave us an

exposure to the real world. Carrying out research also helped us in gaining more practical

knowledge on the subject.

____________________________

Signature

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February 26, 2019

Sir Ghazanfar Yar Khan

Course Facilitator
Iqra University, Gulshan Campus I

Subject: Letter of Transmittal

Dear Sir,
With due respect, we the undersigned students of MBA have reported on “Daraz.pk as
an Online Retailer” under the course: Distribution / Channel Management.

Though we are in learning curve, this report has enabled us to gain insight into the core
fact of procedure of online retailing businesses, specifically with respect of process
involved in retailing. While working on the report we came across many things which
enhance our knowledge. So, it becomes as an extremely challenging and interesting
experience. Without your Inspiring this report would have been an incomplete one.

We hope you find this report satisfactory. We have tried our best to cover the inside out
of the Retailing Business and Techniques. We hope that this report serve as useful
purpose. Lastly, we would be thankful once again if you please give your judicious advice
on effort.

Yours’ sincerely,

________________ _________________
Arshad Mufti Rahat Ali
ID No.12461 ID No: 12781

________________ _________________
Syed Umair Ali Ali Akbar Nizar Ali
ID No: 12412 ID No: 13135

________________ _________________
Soubia Naz Waqas ul Hasan
ID No: 13334 ID No: 10753

________________ _________________
Maham Amjad Danish Akbar
ID No: 13370 ID No: 15639

_______________

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Muhammad Adeel
ID No: 9733

Content

Online Retailer……………………………………………

Advantages of Online Retailer ………………..………..

Disadvantages of Online Retailer…..……………….....

Daraz.pk as an Online Retailer …………………..........

Primary Participants………….………………………….

Specialized Participants………..……………………….

Selection of Participants…….………………………….

Risk they carry……….………………………………….

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 Daraz.pk

Online Retailer:
Online shopping is a form of electronic commerce which allows consumers to directly
buy goods or services from a seller over the Internet using a web browser or their
applications. Online retailing is growing at an astonishing rate, with online sales now
accounting for around one quarter of the total retail market. Retailers who ignore e-
commerce may see their trade lessening as customers continue to shift to ordering
products online.

Online shopping is the growing industry in Pakistan. More and more people are
becoming interested in this mode in order to save time as well as money. Keeping these
trends in mind, let’s see what the future brings to the retailers. Pakistani businesses have
embraced e-commerce. Hundreds of retailers, ranging from clothing outlets to electronic
equipment stores, are now using websites to sell goods to customers.

The emergence of several online marketplaces, such as Daraz.pk, has made it easier for
retailers to sell goods on the web. At the same time, a number of new online businesses
have also propped up. The world observed an increasing trend of online shopping in the
past few years. Just like rest of the world, Pakistan showed the same results, too. In fact,
Pakistanis prefer buying via the Internet more than other nations, and they have obvious
reasons to do that.

The rising trend of online shopping is growing with the passage of time. The e-commerce
business is likely to hit the market size by $1 billion by the year 2020. All the cities
showed the similar increasing trend, but the statistical results showed that Karachi,
Lahore and Islamabad are on the top of the list. In the year 2018, the online shopping
trend increased up to 12% in Karachi alone.

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Daraz.pk as an Online Retailer:
Daraz.pk is the one of the biggest e-commerce web base in Pakistan. Daraz doing its
operation in Pakistan, Sri Lanka, Bangladesh and Myanmar. Daraz.pk is entirely funded
with foreign investment. It has direct investment from Qatar-based telecommunication
company Ooredoo and Berlin- based Rocket Internet is their parent company. Daraz.pk
is the number one destination for online shopping and product search in the country.
It has marked its territory and has defined its goals to be the leading one-stop shopping
destination for all lifestyle needs.

Daraz.pk has many suppliers and it maintains good relationship with them so overall
they have negligible supplier dependence. Electronic commerce technologies have a
great impact on Daraz.pk as it is purely based on it. It is one of the biggest selling
websites in Pakistan as well as outside Pakistan, entertaining more than a million users
on their website per day. Daraz.pk earns 30% commission per sale from these
individuals and companies selling their products on daraz.pk website. It is lacking the
consumer satisfaction due to the quantity, and not having the products on their website
made by the companies which are not ISO certified.

Primary Participants:

Manufacturer:
Daraz.pk brings products form different manufactures to its online web portal and then
delivery at the doorstep of customer.

Retailer:
Daraz.pl itself is an online retailer that provides high quality branded products that fulfills
the fashion needs of Men and Women regarding clothing, footwear and accessories.

Specialized Participants:
Specialized channel participants are classified as functional or support based on the type
of services they provide. Following are the specialized Participants of Daraz.pk:

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Functional Specialist:
A functional specialist is a service provider that is engaged in the basic process of
moving, modifying, or otherwise physically handling a product during the distribution
process or that is directly involved in the selling process.
In Daraz.pk following functional service provider are actively engaged in the day-to-day
performance.
 Following are the distributor of Daraz.pk and deliver the product to the door step
of customer.
a) TCS (Within Karachi)
b) Leopard Courier (Outside City – Karachi)
c) DHL (For international orders only)
Daraz also has delivery services named ‘Daraz Express’ on selected
items/products for fastest delivery.

 Amazon Web Services (AWS) the most mature in terms of breadth of services
offered, provide network support to Daraz.pk in day to day operations.
a) Daraz.pk uses OBS Management Software for order processing.
b) BOB Management Software is used for supplier management.

Distribution:
 Order placing from remote geographical locations (more than 1500 stations)
 Partnership with TCS Karachi, Leopard Courier, (Outside City – Karachi) & DHL
(For international orders only) and they also have on distributor agents.
 Daraz has many suppliers and it maintains good relationship with them so overall
they have negligible supplier dependence.
 More than 90% of marketplace orders are now shipped out on the same day as
the order is placed. This shows that the strategy is working and sellers are getting
better each month

Warehouse Management:
In their warehouses there are shelves, where they store their inventory according to the
alphabetical letters, because they do not store their inventory as per product category.
But they store as per the alphabetical order.

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Inventory Management:
Inventory is being dispatched at Daraz.pk, the inventory comes in big boxes, so the labor
will sort the items by the help of RFID and BARCODE and will deliver it to their
warehouses. Then this inventory is being shifted to the three warehouses which are
located at the Clifton, within the same house.

Data Management:
They use OMS (Order Management System) for the order processing and inventory
management. For Sellers on Daraz.pk, either they can give goods to Daraz.pk
warehouse, so that they can deliver it to the consumer. They can also dispatch it
themselves once order is being confirmed at daraz.pk.

Support Specialist:
A support is a firm that facilitates overall channel performance by providing an essential
ingredient or service. Unlike the functional specialist, a support firm does not engage in
actual selling or the logistics processes of the channel.

Following specialized support services are available to Daraz.pk are:

a) Rocket internet, HBL, ORIX provides financial services to Daraz.pk.
b) Service Agents provide information to customers on their inquiries of their order.
c) Daraz.pk use Amazon Polly to deliver automated real-time information when
customers check on their order status.
d) Different social websites like Facebook, Instagram provide advertising support to
Daraz.pk

How and Why Participants are selected:

Channel decisions related to Primary and Specialized Participants also require special
attention as involve long term commitments to other firms with whom marketer enters in
to a contract. The problem of selecting the most suitable Primary or Specialized
Participants for a product is complex. The most fundamental factor for Primary and
Specialized Participants choice is it’s economic criteria, viz., cost and profit criteria, we
have to consider a number of factors such as the nature of the product, market trends,
competition outlooks pricing policies typical consumer needs, as well as needs of the

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manufacture critical factor.

The participants of distribution channels must have knowledge and experience not only
for the effective maintenance of target segments but also to maintain the competitive
advantage of the manufacturer. For example, an Agent who is able to vary prices for
certain products can negotiate and or lower prices. This will assist him in sustain the
comparative advantage, stay on top of its competitors and stay demanded on the
market. A Broker works mainly to bring the seller and the buyer and to assist in the
negotiation process. An intermediary like Broker is usually dependent on the commission
of a sold product or production in terms of goods. In addition, therefore, a Broker is
involved in one-off transactions and cannot be an effective channel of distribution.

In addition, having formed a channel of distribution it is important to remember that the

exploitation and utilization of intermediaries in a business (not only wholesalers, retailers
but also transport logistics) will lengthen the chain of distribution. A business will then
need to consider which channel is more cost effective and productive in terms of time
delivery, efficiency, pricing policy and where it stands among competitors; for example,
overall feedback, higher rating, higher demand from customers etc.

Risks They Carry:

The e-commerce model, promising as it may be, carries enormous risk for retailers and
consumers alike. When goods are bought, it involves risk also. For instance, an
intermediary bought goods from the producer with the intention of selling at a profit but
Government announced a decision due to which price of product fell down which can
lead to loss. All the participants in the distribution channel must assume such risk of loss.

Wholesalers assumes a large number of risks in the process of distribution of goods.

These risks may occur on account of charges in prices and demands, spoilage of goods,
and bad debts. Thus, they undertake many marketing risks which would have been
undertaken by the manufacturers and retailers.
Retailers sell the goods on credit to the consumers and thus they increase their short-
term purchasing power. In this process, they undertake the risk of bad debts.

You could run out of stocks while orders are coming in, a product shipment might be
delayed, or a parcel could be delivered to the wrong recipient.
These are risks that come with the territory when running an ecommerce business. The
most important thing you can do is to always keep these in mind, and to build a strategy

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on how to deal with them once they happen.

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