ASSIGNMENT : THE FIRST OF ITS KIND ENTREPRENEURIAL VENTURE

UNIT 09 : ENTREPRENEURSHIP & SMALL BUSINESS

MANAGEMENT (LEVEL 4)

ENTREPRENEURSHIP
The act of establishing a firm or business and incurring financial risk in the goal of making a profit is
entrepreneurship. Entrepreneurship is defined as the ability and willingness to develop, organize,
and manage a business endeavor, including any risks, in order to make a profit, or as the capability
and willingness to design, launch, and run a new firm, which is typically similar to a small business.
Entrepreneurs are the folks who start these businesses:

Systematic activity:

Entrepreneurship is a methodical and methodical process. It is a methodical action that must be

carried out in a coordinated manner. It has the certain temperamental, skill, and other knowledge and
aptitude needs that can be gained and developed by formal education and occupational training, as
well as through observation and job experience.

Open-minded:

Every scenario in business may be turned into an opportunity and used to a company's advantage.
Paytm, for example, realized the significance of demonetization in India and recognized that the
necessity for online transactions would increase, so it took advantage of the situation and grew
rapidly during this period.

Risk Taking:

This is the most crucial characteristic of an entrepreneur. Any business venture comes with a
significant chance of failure. As a result, entrepreneurship requires guts and the ability to take risks.

Confident and well informed:

An entrepreneur must have faith in his or her own abilities and ideas. This self-assurance rubs off on
his employees as well as the other stakeholders in the company.

DARAZ.PK

It began as an online fashion e-commerce marketplace in 2012.Their founder is Maayr and

co-founder Farees shah. It began as a listing of brand products on their website. Daraz is one of
Rocket Internet's most well-known companies, which was recently acquired by Chinese
e-commerce behemoth alibaba. Daraz is now a major e-commerce retailer in Bangladesh,
Myanmar, Sri Lanka, and Pakistan. Its web portal features over 126 popular brands, including
Stella, Ego, and Depak Parwani, among others. (“StuDocu 2021”)

Daraz now operates in five countries and employs over 10,000 people. Daraz has a 70%
e-commerce market share in Pakistan alone. Daraz's market capitalization has increased from
$4.5 million in 2015 to $118 million in 2018. (“Profit by Pakistan Today 2021”) It was the first
company to recognise the possibilities of e-commerce in Pakistan. Over 5 million Pakistanis use
Daraz daily and in Pakistan Daraz has created over 50000 jobs,and every month they train and
educate over 3000 sellers. According to Ehsan Sayya Daraz's managing director, by 2022 Daraz
would have over 25 million users in pakistan. (“Business Recorder 2021”)

Daraz is an online retailer that sells branded clothing, footwear, apparel, jewellery, and
accessories for men and women. The company sells consumer gadgets, fashion, and cosmetics,
as well as a diverse range of miscellaneous commodities. Daraz provides products at a low cost
and brings products from a variety of manufacturers on its website.

Daraz is a popular online shoe and clothes store in Asia. Daraz, headquartered in Karachi,
provides a shopping experience in Bangladesh, Myanmar, Nepal, Sri Lanka and Pakistan. Its
servers are located in silicon valley,USA.Daraz is a multinational private sector company based
in Pakistan based in karachi. It was founded by Maayr and co-founder Farees shah.Daraz is the
ecommerce leader in South Asia, having grown from a modest Pakistani startup to become an
integral part of Alibaba's worldwide ecosystem.

Daraz is solely based on profit making. It's one of the top companies of Pakistan which has gone
global. Now that Alibaba has purchased it, it is highly unlikely that its growth will stop and Daraz
will keep booming in the coming years.
FOODPANDA

Very few ventures have been able to enjoy success like Daraz in ecommerce in pakistan. One of
them is foodpanda which started as a delivery service for restaurants. Both companies were started
by Rocket internet and both succeeded as pakistan started developing and the economy was getting
strong. Both really boomed especially in the pandemic when people weren't allowed to leave their
homes so the need for online food vendors increased and in the meantime Daraz also started to
offer groceries through their app. This really helped people who were sick and weren't able to leave
their house.

Foodpanda is a online food and grocery delivery platform brand owned by Delivery hero, which
is headquartered in Berlin, Germany and Daraz is an online fashion and accessories retailer.
Both companies have a huge market share in their segment. Outside of China, foodpanda is
Asia's largest food and grocery delivery network, with 12 markets throughout the continent.

Differences between both is that each capitalized a different market in the ecommerce,
foodpanda providing deliveries and Daraz being an online fashion and accessories retailer.
Although later in the future Daraz also offered groceries in the pandemic as well. Daraz was not
only retailing from big manufactures but also helping small businesses by providing them a
platform. Such as Daraz food panda also helped local business owners a lot by giving them a
platform to sell their food online

UBER

Uber is a ride sharing and food delivery service founded by Garett camp in 2009 as ubercab. Garett
thought that splitting the cost with others would make it more inexpensive, and his concept became
Uber. at its peak before pandemic uber was estimated to be worth around $82 billion. (“Business of
Apps 2021”) Uber had 93 million active users in Q4 2020, down from 111 million in Q4 2019. Uber
says it is creating 20,000 jobs per month,including drivers and jobs for food delivery services.
(Eadicicco) uber was a few years late to step into pakistan but currently it's one of the fastest
growing markets of uber.
Uber's middle eastern rival Careem founded by Mudassir Sheikha was acquired by uber in
2020 for $3.1 billion. (Paracha) Uber is currently operating in 71 countries and over 1000 cities
where it has created many direct and indirect jobs. (uber) uber is considered to
be the market leader in the ride sharing market. It is one of the most well known companies in
the world which has completely abolished the competition. In the pandemic Uber's revenue
dropped to $11.1 billion in 2020 from $14.1 billion in 2019.

OLX

Olx is a Dutch-based online classifieds site based in Amsterdam. (Griffith) For users in the
United Arab Emirates, Egypt, Bahrain, Saudi Arabia, Lebanon, Kuwait, Pakistan, India, Oman
and Qatar, OLX is the most popular classifieds website. Since its inception in 2005 by J.C. Butler
and Sim Whatley, Olx.com has grown to become the most popular site for individuals looking to
buy, sell, or find anything in their neighbourhood.

It is one of the leading platforms to buy used and new stuff in their neighbourhood outside
America. It has specially grown since it has entered markets of india, pakistan where people
mostly prefer used things because of the low average income of these incomes. In the pandemic
as people were in lockdown, the e-commerce industry was able to grow a lot faster such as
companies like amazon, alibaba, foodpanda, Daraz and many more. In 2019 Olx revenue was
reported at $1.281 billion. (“prosusreport2020”)
STARTUPS IN PAKISTAN

Pakistan, like the rest of the globe, has undergone significant technical improvement in the last
decade. In Pakistan, however, the opposite was true. In terms of advancement and vision, they
are diametrically opposed. In recent years a lot of Pakistani entrepreneurships have failed such
as Patari, Veon, roomph.pk, yayvo.com, etc.

An entrepreneurship's overall success is determined by a number of elements, including more

than just providing new commercial solutions to challenges. Lack of product-market fit is a
primary cause of business failure, but additional factors include startup teams' lack of technical
and marketing experience, a lack of funding or insufficient cash creation, legal and technical
issues, and a lack of growth prospects and scalability, to name a few.

Several start-ups failed to secure finance or develop a viable business model. Lockdowns and
the resulting shift in consumer behaviour had a negative influence on some. Others, on the other
hand, are said to have mismanaged their funds or faced problems unrelated to the pandemic
that caused them to fail.(Adnan)

Unemployment has also benefited small businesses alot in Pakistan because people are
desperate to get a job. And in recent years the government has started to give tax breaks,
incentives and low interest loans to youngsters who want to be their own boss. Pakistan is one
of those countries who has the highest youth percentage 63 percent to be exact. (Ahmad)
youngsters understand technology and know how to use it. After the widespread 4G in Pakistan
many people have got access to high speed internet and it has created an opportunity for it and
e-commerce entrepreneurships to be the first to enter the market.

Lack of education

The first reason why most of the start up businesses fail in pakistan is that the literacy rate of
pakistan is very low. Companies are having a hard time in Pakistan to find skilled workers.lack of
workers has caused good skilled workers to be expensive. Most of the people want to work for
an established firm because they feel job security, they can't say this about a new firm who has
recently started. According to the ministry of federal education and professional training
Currently Pakistan's literacy rate is 62.3 and it is ranked 112 out of 120 countries who were
surveyed. (government of pakistan) it's really hard for small businesses to get hold of skilled
employees because of the lack of education which has increased the rates of the employees.

Unemployment

Pakistani entrepreneurs have faced many issues

and setbacks because of Unemployment. First is
that many people are simply unable to buy and
afford living in pakistan. People have low buying
power in Pakistan which has resulted in less customers overall for the businesses. The
unemployment rate in Pakistan in 2020 was 4.65 percent, up 0.67 percent from 2019. Pakistan's
unemployment rate was 3.98 percent in 2019, down 0.1 percent from 2018. (“Pakistan
Unemployment Rate 1991-2021 | MacroTrends”) it looks highly unlikely that Pakistan would recover
anytime soon.

Inflation

Inflation doesn't just affect consumers it also affects businesses and especially new startups.
Inflation causes businesses to pay more for raw materials, their employees and with that they also
have to make sure that their prices are not out of the comfort zone of the consumer. Consumers end
up with lesser buying power which causes the demand to fall. Pakistan has suffered a lot with
devastating effects of inflation in the last couple of years which has caused more than half of the
startups to fail. Inflation in Pakistan in 2020 was 9.74 percent, down 0.84 percent from 2019. Inflation
in Pakistan in 2019 was 10.58 percent, up 5.5 percent from 2018. Inflation in Pakistan in 2018 was
5.08 percent, up 0.99 percent from 2017. (“Pakistan Inflation Rate 1960-2021 | MacroTrends”)

Taxes

In 2020 Pakistan's corporate tax was 35 percent which was a 4 percent incline from 2019. (“Pakistan
Corporate Tax Rate | 2021 Data | 2022 Forecast | 1997-2020 Historical | Chart'') New startups have
a hard time being in businesses and mostly they operate at loss in the beginning. Pakistan has one
of the highest sales tax which results in higher overall price of everything which decreases
consumers buying power even less. Currently Pakistan's sales are standing at 17 percent which
doesn't seem to decrease anytime soon. (“Pakistan Sales Tax Rate - Sales Tax | 2021 Data | 2022
Forecast | 2006-2020 Historical”)

SUCCESSFUL ENTREPRENEURS

Junaid Jamshed J.

Junaid Jamshed was the lead singer and lyricist for Vital Signs, a popular band. He afterwards
gave up music to pursue a career as a preacher. He needed to do something for a living after
music, so the adventure of famous apparel brand J. began there.

J. was founded in 2002 with a distinct ideology of reviving

the country's cultural history and making Shalwar Kameez
the popular wear, and it quickly became one of the most
well-known and identifiable apparel companies in Southeast
Asia.

Its shop network has grown to over 100 locations across the
country. J. has expanded abroad by opening 20 locations in
the United Kingdom, Australia, Canada, New Zealand, the
United Arab Emirates, and Qatar, to name a few. Today J. is
the most well known Pakistani clothing brand.

SYED BABER ALI

He is credited with founding LUMS, one of Pakistan's top business schools, and he has held
executive positions in a number of companies, including Packages, Nestle Pakistan, IGI Pakistan,
and Unilever Pakistan. However, many people are unaware of his significant achievements. While he
has achieved a great deal in terms of corporate success, he has made a few other contributions and
accomplishments.

Syed Babar Ali founded Ali Institute of Education, which is one of Pakistan's best teacher
training institutions. Syed Babar Ali, an industrialist, engaged in this project since it was an area
that had traditionally lacked attention.

Apart from that, Syed Babar Ali played a significant role in the World Wide Fund for Nature, often
known as WWF, and served as the organization's International President from 1996 to 1999.

Apart from additional honours from the governments of Sweden and the Netherlands, he earned an
OBE from the British government and an honorary doctorate from McGill University in Canada.

FAILED BUSINESSES IN PAKISTAN

BeautyHooked

BeautyHooked (BH), a Pakistani start-up headed by a woman, raised $280,000 from Fatima
Ventures in 2016. Sahr Said, a Cornell graduate, was the driving force behind the start-up, which
remained in the spotlight. The company was a part of PlanX, a technology accelerator, and it
received a lot of support.

Despite all of the positive factors, including an untapped potential market, the firm was unable to
realise its goals. The $280,000 in preliminary funding was intended for the creation of a mobile
app as well as expansion both within and outside Pakistan. The startup, on the other hand,
failed to meet any of its goals.

The site receives only 700 views each month, and activity on the Facebook page has remained
low. Despite the fact that they secured funds for it, the mobile app remained undeveloped. BH
missed out on festive sales, despite the fact that its competitors 'Ghar Par' and 'BaGallery' had a
huge response throughout Eid and Wedding Seasons.

Furthermore, BeautyHooked was unable to expand its business outside of the Lahore region, as
well as maintain agreements with Lahore-based beauticians and parlours.

BeautyHooked (BH), according to Aamna Tariq, a Lahore-based beautician, was a brilliant

business idea that failed to materialise. She stated that the inability of the BH to offer big
discounts, the offering of low-quality beauty products, and the startup's inability to enter the
market outside a few areas were some of the faults made.

BeautyHooked is currently looking for extra capital, according to our channel check, as the
company is unable to cover its overhead expenses and grow operations. Fatima Ventures, on
the other hand, has declined to contribute any additional equity because no demonstrable
progress has been made since the prior round of funding.

JUMBO.PK

Jambo was created by Arpatech Ventures as an e-commerce portal that claimed to give the
greatest prices without compromising product quality. With the goal of becoming Pakistan's
Walmart, the site enlisted Forrun as a delivery partner. Due to Pakistan's increased internet
penetration after 2014, Jambo.pk was founded during the country's e-Commerce fever. At the
time, every mom-and-pop shop built an online platform in order to profit from the rising internet
user base.
Due to a lack of focus on customer experience and a unique selling proposition, Jambo.pk was
unable to carve out a substantial niche in the Pakistani ecommerce sector. The site was shut
down in 2020.

AUTOGENIE

Autogenie launched an online platform in 2015 that delivered car-maintenance services to

customers' homes. In the beginning, the website offered auto repair and maintenance services
in Lahore. The popularity of the portal has gradually expanded among the working class.
PakWheels also contributed $100,000 to the company.
Despite a favourable initial response, the platform was unable to grow to new cities. They were
also unable to enrol Corporate clients, which would have resulted in predictable revenue
streams. It was regarded as a success when its mobile application achieved 5,000+ downloads
in its early days. The traction, on the other hand, has vanished.

The platform made insufficient marketing and product promotion investments. Customers are
still unaware that a genie is waiting to solve their problems. The company was unable to extend
its ties with mechanics and auto parts companies. Customers have developed a habit of seeing
their long-time mechanic. It is impossible to break a genie in the blink of an eye.