Degree
Master of Business Administration
Faculty / School
School of Business Studies (SBS)
Advisor
Syed Atif Murtaza Qaiser, Lecturer, Department of Marketing
Project Coordinator (Internal)
Muhammad Zahid
Project Coordinator (External)
Seema Shabbir (Digital & Acquisition Specialist)
Client
Daraz
Project Type
MBA Research Project
Keywords
https://ir.iba.edu.pk/do/search/?q=Ecommerce%20in%20Pakistan&start=0&context=8598587&facet=">Ecommerce in Pakistan, Online Sellers, Seller Acquisition, Social Media Sellers, Online Marketplace Preferences
Abstract / Summary
The retail landscape in Pakistan has evolved with many businesses adopting multichannel or omni-channel strategies. Moreover, the rise of social media, increasing middle class consumers and access to smartphones has further led to an increase in the number of online sellers. These circumstances coupled with the Covid-19 pandemic have promoted e-commerce within the country. With rising e-commerce in Pakistan, Daraz faces severe competition from incumbent and new e-marketplaces including social media platforms like Facebook and Instagram.
Digital Onboarding, in the context of e-commerce and sellers, deals with registering new sellers on to the e-marketplace. The purpose of this project is to help Daraz identify and reach potential sellers and improve its seller onboarding process. It includes assessing the need to tailor the process according to the industry, identifying factors that lead to the decision investing in an online selling platform and recommending measures to attract sellers selling exclusively on social media to the Daraz platform. This research study has been initiated with the following research questions: (1) What is the current seller journey? How can we improve the current seller onboarding process? Is there a way to tailor the process industry wise? (2) How to attract potential sellers on to the Daraz Platform?
To answer the research questions a combination of qualitative and quantitative research was conducted. For the former, observatory research on the Daraz Seller Centre and e-marketplace was conducted along with the thematic analysis of transcripts obtained from 11 in-depth semi-structured interviews of informants (an e-commerce consultant and Daraz employees) and respondents (online sellers consisting of those who sell on Daraz, Amazon, Facebook, Instagram and WhatsApp etc.) were conducted. For the quantitative research, a survey questionnaire was administered through social media and face-to-face structured interview by visiting various physical marketplaces with people selling online either on social media or Daraz etc. by means of convenience sampling to test which factors influence a seller’s intention to use an online selling platform. An analysis of the seller journey was also performed to identify areas of improvement.
The study found that some of the key challenges faced by Daraz sellers include brand creation, stringent Daraz policies (registration, product listing, commissions and returns), limited digital literacy, vendor assistance concerns (untrained support staff, delayed response), verification process issues, system errors etc. The semi-structured interviews revealed problems faced by sellers pertaining to the platform and to the onboarding process. However, they could not be attributed or generalized to any industry. Therefore, it is concluded that Daraz need not tailor its seller onboarding process specific to certain industries. Rather, the same onboarding process should be there regardless of the industry with improvements.
By virtue of the quantitative research, it was found that system quality of a platform has a direct effect on the intention to use a certain online selling platform. Service quality does not directly affect the intention to use but has an indirect relation with intention which is mediated by trust and perceived benefit. While service quality has a weak effect on trust and trust has a weak effect on intention, trust has a strong effect on perceived benefit which in turn has a moderate effect on intention. As such, by improving the service quality, platforms can foster trust which will have a significant impact on the benefits the sellers perceive an online selling platform has to offer while improving the system quality would be a direct factor promoting use of the platform. The study, however, could not establish a relation of perceived cost with trust and intention. A possible reason for this may be that perceived benefit obtained from a platform would be greater than the perceived cost to offset the effect of the latter construct.
The survey found that only 8.3% of the respondents prefer Daraz as a platform to sell their products. The most preferred online selling platform was Facebook (29.2%), followed by Instagram (18.1%) and WhatsApp (15.3%). In addition to better system and service quality of these systems, our observations during the market visits suggest that the perceived benefits offered by the Daraz platform are not sufficient to offset the perceived cost to the seller selling on the platform. This leads to high levels of seller attrition.
Therefore, Daraz should work on improving its system and service quality, promoting trust in the platform among the sellers, increasing perceived benefits and reducing the perceived costs to the seller by introducing seller protection regulations and other initiatives. Some of the initiatives recommended by the authors include setting up a seller protection fund (SPF), provide assisted e-commerce facility, start a Daraz Seller Ambassador program, improve KPIs of vendor assistance service, improve search engine result quality by recommending keywords to sellers to improve SEO.
Recommended Citation
Saad, Z., Ilyas, I., Zehra, M., Agha, A., Baber, S., & Hassan, Y. (2022). Daraz pk Digital Onboarding - A deep dive project (Unpublished graduate research project). Institute of Business Administration, Pakistan. Retrieved from https://ir.iba.edu.pk/research-projects-mba/293
