Published on April 18th, 2015 | by Bhavishya Kanjhan2
We really have an opportunity to build a billion dollar business: JadoPado CEO
The selling point of eCommerce has always been convenience. The ability to sit in your chair, couch, bed, or even on the bus and buy something which then gets delivered to your doorstep is delightful. There’s eCommerce, and then there’s Amazon. The experience of being able to find just about anything you want on one site is something that takes the eCommerce experience from delightful to downright magical.
In fact, it is this very proposition that Amazon India has very cleverly captured in its advertising campaign with the tagline ‘Aur Dikhao‘ – a culturally relevant way of saying ‘show me more‘ of what (stock, inventory, products) you have available. The arrow from A to Z in the Amazon logo is no coincidence.
Omar Kassim, CEO of JadoPado, is set to build out the same offering from this region. He believes there is an opportunity to build that global business, right here from the UAE.
The Birth of Marketplace
JadoPado recently introduced its Marketplace that allows retailers to sell products of all kinds on its platform. Now, JadoPado isn’t the first one to the market, or even in this market with this model. But Kassim believes he has an edge. He calls his competition, carefully, “yesterday’s marketplaces“, and says the biggest pain point is their intention to control the entire experience – customer service, delivery, fulfilment and more. Kassim does not want to play the ‘middle man role’.
JadoPado’s marketplace allows retailers to sell products of all kinds on its platform.
While some retailers would enjoy everything being handled for them, Kassim believes in offering ‘flexibility’. One such example is that JadoPado is looking at options to support in-store pickup with retailers who have a physical presence. Such an option would provide cost savings to both the customer and the seller.
But the idea of flexibility aside, Kassim says these marketplaces of ‘yesterday’ want to control the transaction, because otherwise “they feel like the transaction is going to leave them, and the buyer and seller will form their own relationship”. He isn’t worried about that. He acknowledges that possibility and says there is nothing you can do to stop it. His aim, he says, is “to build the best platform possible to keep attracting those people (retailers) back“. With that he wants to provide a set of tools to retailers that is better than what they have at their own disposal.
This flexibility is a double-edged sword as well. One on hand, retailers are not compelled to hand over complete control. On the other hand, running part of the operations themselves, according to their own customer service standards, may result in an experience that is lower than the level that JadoPado’s customers are currently used to. After all, not every retailer will make the investments necessary to offer the same level of experience, or at least not at first.
Customer Service is a part and parcel of building a great business – Kassim
There is a serious risk of the dilution of the JadoPado brand. Kassim acknowledges that possibility and says that working on educating the seller about the importance of customer service, and why “it (customer service) is a part and parcel of building a great business”. On the other end of the spectrum, they’re sending out clear communication to the customers, informing them that the transaction is happening from a different retailer, not JadoPado.
JadoPado lives on as JadoPado Direct
Of course its own interests are at play here too. JadoPado wouldn’t want to have its own brand named tarnished as it continues to sell to customers directly under a new moniker called JadoPado Direct. And with that, JadoPado Direct competes directly with the retailers present on the Marketplace platform.
JadoPado Direct allows the company to offer a full-service model for distributors in the region. These are companies who want the eCommerce revenue but don’t want to, or are unable to, execute it themselves. By contracting with JadoPado, they let it handle the inventory at their warehouse, payment processing, deliveries, returns and just about everything else that would come under the eCommerce umbrella.
JadoPado competes with the same retailers that are present on its Marketplace platform
Except, there’s not where JadoPado Direct ends. It has now introduced two new divisions to the business under the umbrella. The first being JadoPado Direct for Businesses, a direct sales arm to corporate, education and government customers. And the second is JadoPado Direct for Trade which caters to wholesale and export customers. The three divisions have their own assigned Vice Presidents that report into Kassim.
But here’s the deal – JadoPado Direct for Business, and JadoPado Direct for Trade aren’t eCommerce businesses. They’re both trading businesses done with a traditional sales force. Hold that thought for a minute.
In January 2014, JadoPado eliminated the option of Cash on Delivery as a payment method. As of this month, this option has been reinstated again.
The reintroduction of Cash on Delivery along with a traditional and offline revenue model raises an interesting question.
Is pure-play eCommerce not enough?
Kassim says they are an eCommerce business with components that are ‘transitioning’ from offline to online. With specific regard to the Trade component, he says that environment is such where people are used to transactional activity taking place offline but that’s changing. For now, he says, “our online business has a great opportunity to do things like strong lead generation.. which are fulfilled offline. In the future, these will be fulfilled online“. Kassim paints a hopeful picture but wholesale trade and export business can be a difficult beast to conquer. With negotiations involving both pricing and credit terms, it’s hard to imagine technology replacing it. Augmenting or facilitating it, seems more likely.
Eliminating Cash on delivery is putting an artificial damper on the business
Kassim has been publicly outspoken against Cash on Delivery in the past. For now he says he’s willing to eat his own words – those again are exact words. He says JadoPado “ran fine” without COD but he believes by eliminating the option they were putting an ‘artificial damper’ on the business and its potential. While he’ll tell you that about 70-80% cash transactions in Saudi and the rest of Middle East, and how it’s an essential part of the business; he still doesn’t seem to believe that COD a long-term solution.
Just like the
offline transitionary components of JadoPado Direct for Business and for Trade though, Cash on Delivery becomes necessary; for now. And maybe, just maybe, pure-play eCommerce isn’t enough; for now.
While the reintroduction of Cash on Delivery may not seem like much of a pivotal moment, it probably is more for Kassim personally. But there have been many others in JadoPado’s 4 years of operations.
Once upon a time
JadoPado initially attempted grocery delivery service; for all of two weeks in 2011. Kassim says he realised very quickly that the market wasn’t ready for it and that they decide to focus on a category where you didn’t have to “sell” the product – consumer electronics. After all this product was already being marketed, and “it became a relatively easy product to sell online versus trying to convince a customer about the new product and the new channel. “
Since then, JadoPado has introduced a number of changes to its product line up and categories over the years. It started initially with its own delivery fleet and then in January of 2014 dropped that in favour of a partnership with FedEx. This partnership allowed JadoPado to expand its delivery radius from just Dubai, to all of UAE, to the rest of the world.
The Marketplace would still be JadoPado’s biggest pivotal point though. The story behind it is that sometime last year, Kassim and his team were looking at ways to add a greater line up of categories and products. And this is where they asked themselves the question of what they were good at? Was it the products – the sourcing and delivering of them? Or was it the online selling experience which consisted of the platform and technology.
With JadoPado’s current business unit split, it doesn’t seem like one came at the option of another. The former continues as JadoPado Direct, but the latter definitely had great potential – and thus the idea of Marketplace was born. Kassim says he is “happy and comfortable” for a retailer’s marketplace presence to sit besides other activities they execute – including both offline stores and their own website. Hopefully, over time, he says “we become a channel of choice, and in some cases, the only channel“
We really have an opportunity to build a billion dollar business
The way forward
The Marketplace currently features 16 top-level categories and 5,500 categories in total. It has 660 stores live in about five weeks of operations. Kassim hopes this number will hit 10,000 by the end of the year. It’s an ambitious goal, but he is nothing if not ambitious. “We really have an opportunity to build a billion dollar business” says Kassim, “I strongly believe that” adding his emphasis. This opportunity isn’t just local though. Kassim says his vision has always been to build a global eCommerce business, that is based in Dubai. It’s going to take time and Kassim knows that.
“This is a marathon“, he says, “not a sprint.“
Disclosure: I run a consumer technology retail business called Computer Care. The business competes with JadoPado on an absolute level for larger market share, and also collaborates with it by being present on JadoPado’s Marketplace. Omar Kassim was aware of this affiliation prior to the interview. My position gives me greater insight into the workings of the retail and online businesses which helps me deliver an informed opinion on Techview.me