Q&A with Mr. Hamza Rauf Essa, Director, Telemart Pakistan, on building a leading ecommerce brand in a fast-growing consumer market?

Q. Telemart has had a first-mover advantage in the Pakistani ecommerce space. As competitors look at a high-growth consumer market like Pakistan, what are you doing to ensure your offering sees client stickiness and repeat business?

A. From Day 1, Telemart has had a customer centric approach. It is focused less on price and more on providing value to the customers. Telemart has multiple USPs which have helped it stay relevant and be the preferred choice for online shopping in a fast-growing and large consumer market like Pakistan. Our product variety and service-levels have been a major factor in retaining customers and attracting new customers. It is the only ecommerce platform in Pakistan which also has its own retail, corporate and wholesale network. The online store houses over 100,000 products across 17 categories. The retail network operates company and franchisee-owned outlets. The wholesale network, in turn, caters to the needs of the retailers. The corporate network assists corporate procurement by leading business houses.

Telemart is also the 1st e-commerce platform in Pakistan to have a dedicated repair lab and a team of qualified technicians at its Karachi head office. It provides repair services for mobile phones, tablets, smart watches, laptops, TVs, appliances, etc. to customers across Pakistan with pick and drop service. It is the only business in Pakistan to introduce a Discount Card for its customers as a value-add complimentary gift to avail discounts at over 200 brands nationwide. This card has no expiry date, no renewal fee, and no conditions attached. It is the 1st e-commerce platform in Pakistan to introduce Islamic insurance (Takaful) against theft, snatching and accidental damage for all its products. It has a dedicated feedback team which ensures that feedback calls are made to all customers on all online, retail and corporate orders). It is the 1st e-commerce brand in Pakistan to introduce voice-search in its mobile app. It is also one of the 1st e-commerce websites in Pakistan to start unboxing and review videos of its products on Telemart’s social media and Youtube channels. It is the only seller of gold-plated phones in Pakistan. It has a dedicated gold-plated product category on its website, which includes phones, tablets, laptops, I-Macs, watches, etc. Lastly, it is the only e-commerce platform in Pakistan to have launched a one of its kind franchisee programme.

Q. Do you own the inventory or are you a marketplace to connect the sellers with buyers? What do you think is the ideal business model for the Pakistani market?

A. We are primarily a marketplace where different vendors from all across the country sell their products using our platform. However, there are certain products that we do stock, based on customer demand. For example, if there is a product which has shown great sales on our platform in the past and is expected to perform well in the coming days, we shall stock it in our warehouse to ensure faster deliveries and maximum convenience at the supply chain side. Similarly, if there is a product which has just been launched and is creating a buzz in the market, we shall make sure Telemart is the first platform to list it on the website and enjoy the premium. Incidentally, Telemart was the 1st e-commerce platform to launch products from brands like Oneplus, MI, Ferrari, Jabra, Bose, iLife and Micromax, amongst others.

The Pakistani e-commerce industry is a combination of both branded online stores and marketplaces. For example, a lot of fashion and lifestyle retail brands in Pakistan have their dedicated e-commerce websites. For stores like these, majority of the products are stocked in their warehouses. However, the e-commerce websites based on marketplace model are based on minimum inventory which has an advantage from the capital requirement perspective.

Q. Different platforms focus on different aspects for their USP. What is your focus area?

A. As a brand, it’s about striking the right balance with your customers, your employees, your vendors and other stake holders. Telemart’s 1st priority are the customers. We strive to provide an unmatchable customer journey and experience to all customers. Our simple business proposition for customers are our quality products, best price and amazing service. We also need to understand that in Pakistan, the e-commerce segment is still less than 1% of the total industry. 99% of the industry still comprises of the conventional retail brick-and-mortar model. Therefore, our target is to reach out to the customers wherever they are.

Q. What are you focusing on for expansion? How are you taking the company to the next level?

A. We are going both deeper and wider across Pakistan with our newly launched Sales-Affiliate Programme for the masses and our Franchisee Programme for businesses, retailers and micro entrepreneurs. Our goal is to become Pakistan’s finest omni-channel brand which is the nation’s preferred choice for shopping. The broader vision of our Sales-Affiliate programme is to “Produce 1 million Telemart affiliates to mitigate Pakistan’s unemployment rate and enable a digital ecosystem in the country.” The tag line behind this initiative is “Rozgaar Sabke Liye”, which translates into “Employement for All”. The details of our Affiliate and Franchisee Programmes are mentioned in our website (www.telemart.pk/affiliate) and (www.telemart.pk/franchise).

Q. In large-population Asian countries, new competitors backed by PE/VC capital often undercut pricing with heavy discounts and offers. The result is – client base grows but business profit suffers. The one with the deepest pockets survives the consolidation. What is your view on this trend in Pakistan?

A. Price wars and under-pricing are the last things that any industry would want since it affects the entire industry negatively and takes away their power to earn any decent profit. Unfortunately, like other Asian countries, Pakistan has also fallen victim to this practice where big players who are backed by PE/VC capital are taking away market share from others by selling products initially at losses and at unimaginable prices. This is affecting the industry on the whole. However, the beauty of this industry lies in the fact that there are still customers who give more importance to the value proposition of the brand and customer service than just price. So if a brand can deliver a service and quality beyond customer’s expectation, then there is a chance that the customer might become indifferent to price cuts and heavy discounts.

Q. With regards to exit-strategy mechanisms, what is the interest the market is seeing? When current investors from early stage firms like yourself look to exit, is there enough investor interest to buy such stakes in secondary sales? Or is an IPO better sought as an exit strategy?

A. Unlike the Silicon Valley, IPO is the last option for e-commerce players in Pakistan due to the overall size of the industry. E-commerce is in an infancy stage in Pakistan right now. For example, the current market size of Pakistani e-commerce industry is estimated at USD 600 mn, which is nothing compared with countries like India, USA, UK, China or even Indonesia. Therefore in Pakistan, it is more of the industry consolidation which can lead to buyouts of the smaller players, or even the bigger players.

Our focus with Telemart is to not just sell it away and sit back. We want to do this for the rest of our lives and turn it into a global brand with partnerships, collaborations and investments from the right partners. We want to ultimately develop a business model which is reflective of the phrase “Don’t put all your eggs in one basket”. Therefore, we believe in diversifying our risks, our sales channels and our product portfolio, and our efforts continue on all these aspects.

Q. You mentioned ‘Employment for All’. What are some of the other community initiatives you have undertaken?

A. Telemart holds social welfare close to its heart. We believe a brand is not complete until the work is having an impact which is more meaningful than just offering a product or service. We religiously practice Corporate Social Responsibility to benefit the society at large. For example, we have conducted 4 blood donation camps in collaboration with Indus Hospital, saving more than 500 lives. We have partnered with Akhuwat Foundation to build Pakistan’s first tuition fee-free university. We have a collaboration with NOWPDP, a disability inclusion initiative. We have conducted road safety campaigns, the Badlo Pakistan donation drive, and the Positive Pakistan campaign to highlight Pakistani individuals and organizations doing wonders for the country. We have a dedicated website for donations in collaboration with charitable institutions, where people can donate and buy products for charity.

Q. Lastly, tell us a bit about the recognition Telemart has won so far?

A. In a span of just 4 years, Telemart has won the Emerging Brand of the Year Award 2015-16 in online shopping by the Federation of Pakistan Chambers of Commerce & Industry (FPCCI). It also won the FPCCI’s Brand of the Year Award 2017 in online shopping.It won the ACQ World Award 2016 for online retail company of the year. It also won a nomination to the World Retail Awards 2016 for “The Rodney Fitch award for innovation and creativity. It is the official partner for leading brands like Samsung Pakistan, Intel Pakistan, etc.

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