North South University

School of business and economics

Report on
E-Business in Daraz

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 PREPARED FOR:
Dr. MD. Wahiduzzam

Lecturer

North South University

PREPARED BY:
MD. Modassarul Haque 1530971630

Rashedul Islam Shaon 1722159030

Morshed Raihan Joy 1731076630

Sanjida Sarkar Borsha 1731059030

Ahmed Tahmid Zaman 1731427030

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 Letter of transmittal
18th April, 2019

Dr. MD. Wahiduzzam (MWA)

Lecturer, Department of Management

School of Business and economics

North South University

Subject: Submission of the report

Dear Sir,

It’s our great pleasure to be able to submit this report to you on Daraz. Here we have tried to put our
best effort to identify all the required criteria to complete this report properly. Our knowledge gained
from this course has helped us all throughout the report. All the provided data has been collected
both from internet and physical source. References has been provided at the end of the paper. Early
apologies for any mistakes. We have tried our best to follow your instructions. We sincerely hope
you will like it.

Thank you,

Group
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 Acknowledgement

We would like to express our deepest gratitude to our Almighty God, the most merciful for
blessing us with great patience to complete the assignment successfully.
Then we would like to express our appreciation to our instructor, Dr. MD. Wahiduzzam (MWA)
Lecturer, Department of Management, North South University, for her guidance in preparing this
paper. He assisted us the pathway to prepare this assignment through consultation.

We also like to thank our friends who helped us a lot while preparing the report by giving their suggestions,
assistance and supply of information, which were valuable to us. Their helping hand supported us to
complete our report successfully.
Our team members have made valuable contribution to this assignment, which inspired us to
complete our assignment.

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Table of Contents
Executive Summary.................................................................................................................................7
Introduction.............................................................................................................................................8
E-Business of Daraz.com.bd....................................................................................................................9
Context:...............................................................................................................................................................9
Mission...............................................................................................................................................................10
Vision.................................................................................................................................................................11
Range of service.................................................................................................................................................11
Define and describe e-business model:..............................................................................................................12
E-business revenue model......................................................................................................................13
Value proposition:.............................................................................................................................................13
Revenue model of the organization:..................................................................................................................14
Online marketplace structure:..........................................................................................................................14
Market segment:................................................................................................................................................14
Marketplace structure:......................................................................................................................................16
E-business platform/infrastructure........................................................................................................16
E-business application services:........................................................................................................................17
Enterprise resource planning (ERP):................................................................................................................17
CRM:.................................................................................................................................................................18

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 Data stores and data mining:............................................................................................................................19
CRM analysis:...................................................................................................................................................19
Supply Chain Management:..............................................................................................................................20
IT use for e-business application:......................................................................................................................21
Intranet:.............................................................................................................................................................21
Extranet:............................................................................................................................................................22
Internet:.............................................................................................................................................................22
The web technology and software applications:...............................................................................................23
Web content management strategy:..................................................................................................................24
Digital Strategy for E-Business..............................................................................................................27
Fatafati Friday Offer:........................................................................................................................................27
Cash Back Offer:...............................................................................................................................................28
Competitive Threat:..........................................................................................................................................30
E-Business Security...............................................................................................................................30
Five IT Security Risks:......................................................................................................................................30
Two risks which cause severe damage:.............................................................................................................32
Suggestions for security management:..............................................................................................................33
Conclusion.............................................................................................................................................34

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 EXECUTIVE SUMMARY

Daraz.com.bd is the first internet-based shopping mall style e-commerce

platform which brings the latest local and international goods to Bangladeshi
consumer’s doorstep in the year 2015. It follows the same e-business model of
amazon.com where consumer can buy their desire product from wide range of product
categories. Daraz was found back in 2012 by German venture capital company,
Rocket Internet. Daraz expands with 350 to 400% growth rate within short period of
time. Apart from Bangladesh, Daraz.com is available in Sri Lanka, Pakistan, Nepal
and Myanmar. Among these countries, Daraz.com.pk (Pakistan) is most successful
one. In May 2018, Daraz Group was acquired by the biggest Chinese e-commerce
company Alibaba Group. Now Daraz is conducted its operation under Alibaba with
same brand name.

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INTRODUCTION

Daraz offers the Bangladeshi consumers a true online shopping experience which was new in
2015 and created a hype in the market. Daraz is a platform where sellers can sell their
product through its website in exchange of a percent margin thus Daraz portray a B2C online
marketplace. Daraz has set a standard e-business platform where thousands of entrepreneurs
and physical stores found a unique opportunity to sell their product.

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 E-BUSINESS OF DARAZ.COM.BD

Context:
E-commerce is the process of buy and selling products and services electronically on the
Internet that brought major changes in the traditional business system. Daraz.com.bd is
fully depended on online technologies like mobile internet and new features like cash on
delivery, home delivery, return policy, secure and flexible payment systems Launched in
2012, Daraz is South Asia's premier online shopping marketplace with an active presence
in Pakistan, Bangladesh, Sri Lanka, Myanmar and Nepal. The main and only shareholder of
Daraz.com.bd is Alibaba. Daraz.com.bd benefits the customers by offering products at low
prices through various discount offers.

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 Mission

• To provide an enjoyable shopping experience for Consumers and to grow together

with our sellers.

• It will continue building a vast loyal customer base by having the broadest selection
of products, unbeatable prices, 100% reliable fulfilment and relentless focus on customer
experience.

• For its’ Sellers, it will continue to provide a differentiated value-added service to

support scalability, growth and integrated business solutions.

• Daraz Bangladesh will achieve the mission by focusing on their core values and
hiring, coaching and retaining the best people in the industry through a strong company
culture.

• Daraz Bangladesh is committed to a strong ESG program and creating long-term

growth and job opportunities in all of our markets by pioneering the e-commerce
development.

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 Vision

“To be the most reliable marketplace and offering the best services to our customers:
Consumers and sellers”

Range of service

Daraz offers a range of products like

1. Fashion products

2. Phones & Tablets

3. Sports & Travel

4. TV, Audio & Camera

5. Computing and Gaming

6. Home & Living

7. Baby, Kids and Toys

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 8. Beauty & Health

9. Appliances

10. Grocery items.

Daraz mostly operates as a B2C business but also offers some B2B services from time to
time for a limited period. Their key business focus is to maintain number one position in
the e-commerce industry of Bangladesh by following cost leadership strategy.

Define and describe e-business model:

Daraz does not produce any products. Daraz has contacts of more than 3000 sellers in
Dhaka of different products. Whenever a customer places an order through Daraz’s
website, a team called first mile or Dex (Daraz Express) receives the order placement and
then another team called VO (Vendor Operations) contacts the seller of the product,
informing the seller of the order. The receiving team receives the product from the seller.
The receiving team then sorts the products area wise then it goes to the network team. The
network team then send the product through courier service such as sundarban courier if the
order was placed from outside of Dhaka. If the order was placed inside Dhaka then Daraz
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 has its own delievery team that delivers the products inside Dhaka. Their main business
actors are seller and customer. Sellers benefitted by selling their products daraz’s website
and for that daraz charge a percentage (10%-12%) to their seller which is considered as
their revenue. The customers are benefitted by getting products in their door within a short
time. Customers also get discount from darazi in different time periods.

E-BUSINESS REVENUE MODEL

Value proposition:

Daraz.com.bd creates value for the consumers by offering diverse ranges of new and
unique products through a well-organized fast website and cash on delivery facility. They
also provide different discount offers for the customer, 7 days return policy as well as safe
and secure shopping environment in online.

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 Revenue model of the organization:

The main source of revenue of Daraz.com.bd is selling products through their website and a
very small portion comes from selling advertising. Normally, they increase their sells
through social media marketing like Facebook marketing, Instagram marketing etc. They
try to gain traffic from social media to their website. Another way to boost up their sells is
intensive promotion like 03-taka deal offer, 11-taka deal offer to the consumers. Recently,
they launch their own apps to boost their sales by offering special discounts to the app’s
users.

Online marketplace structure:

Daraz.com.bd belongs to click online marketplace structure. Customers purchase their

products through their website by clicking in the product.

Market segment:

Their main focus is only who are leaving in Dhaka and leading a busy life. Besides that,
Daraz.com.bd is slowly starting to target the customers outside of Dhaka. They divided
their market into different segments:
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 Demographic Segments:

They have different categories products for men, women and children. They differentiated
their products by income level and social class (section A and B) to attract as much
customers as possible.

Psychographic Segments:

In this segmentation they segment based on the lifestyles and personality of the customers.
Like: Gaming accessories, Sports and Fitness, Travel and outdoor.

Geographic Segments:

They are mainly focused on Dhaka based customer. Most orders are also come from Dhaka.

Revenue Generating Strategy:

Pricing strategy:

Although price is set by sellers but daraz.com.bd provides discounts on those products to
attract customers. They reduce their marketing cost and spend this amount on discount.

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 Besides that, they negotiate with their sellers and motivate them to give discounts for bulk
amount sells.

Product strategy:

They display their products in the website based on product categories and reviews of
seller. During the discount period they highlighted their discount products in the website.

Marketplace structure:

Daraz.com.bd is a joint venture of Rocket Internet and GMBH which is situated in

Germany. They are the largest venture incubator outside USA and China. They establish
themselves as an intermediary between seller and customer.

E-BUSINESS PLATFORM/INFRASTRUCTURE

In the era of digitalization, Daraza.com.bd has one of the biggest E-commerce platforms
through which it connects a huge number of buyers and seller in a single digital platform.
Daraz.com.bd is a mall-style e-commerce shopping site which hasn’t any own product
rather they are working as an intermediary between buyer and seller. In the physical
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 shopping mall, customers can visit different shops and buy different things. Exactly like
that Daraz.com.bd is an online shopping mall where customers can visit different shops to
buy their desire product. So now customers don’t need to go any physical shopping mall,
they can buy their desire products just within a minute by visiting daraz’s website.

E-business application services:

Draz.com.bd is an online e-commerce shopping site which is providing a platform to its

suppliers and buyers for that it has to use several soft-wares, applications to manage its
inventory, contact with supplier and relation with customers. As a web-based business
software use is a crucial part of its business. So, they were disagreed to disclose some
important name of their software those they use for their business purposes. But they have
told the name of few soft-wares name which they use to do their day to day operation.

Enterprise resource planning (ERP):

Currently Daraz.com.bd is using oracle e-business software application to run its

operation and resource planning like finance and portfolio analysis and management. To
make a connection between all others software including CRM, SCM as well as data
mining it uses oracle enterprise resource planning cloud. ERP makes daraz’s work simple
in the following ways:
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  Makes day to day operation more flexible and less time consuming.

 Makes inventory management more efficient

 Helps to maintain good relationship with suppliers and consumer

 Helps to create a more accurate financial data and ensure better portfolio management

CRM:

In the online business world there is a very little direct interaction between customers and
the business organization. For that organizations need different types of software to keep
the track of their customer activity and maintain a effective relationship with them.
Daraz.com is always proactive about their customer satisfaction. THE CRM activity of
daraz.com.bd is given below:

For customer relationship management, they have an IR team who uses the Salesforce

CRM soft-ware. The CRM software’s features include sales forecasting, collaboration,
contact management, and reporting. The utilization of the CRM system helps Daraz.com.bd
to track all sales activity including past and future customers. This information provides
insights for Daraz.com.bd to act on higher potential customers. CRM systems provide

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 insights to customer information and decisions. Information such as social media, emails,
and client data helps Daraz.com.bd to understand the customer needs and leverage potential
sales.

Data stores and data mining:

To keep the record of customer’s information they use Microsoft access which is secure to
save and retrieve customer data. For data mining they use SPSS Modeller which helps them
to find out the pattern, structure and relation to forecasting their sales, to take promotional
decision as well as to design their website home page based on which product customers
buy most, which types of product customer prefer to see in home page.

CRM analysis:

CRM analysis helps companies to connect with customers. For analyse the customer
activity daraz.com.bd use Google analytics analysis tool. It helps them to track and
provides reports about particular websites traffic. It also provides information how
frequently customers visit their website and how much time they stay on the website.
Daraz.com.bd can also know which web page or shop is performing good or bad. Based on
that they can change current strategy and formulate new strategy.
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 Supply Chain Management:

Daraz.com.bd has multiples suppliers. For supply chain management Daraz.com.bd

uses OMS software. The OMS or order management system software encompass of these
modules:

• Product information (descriptions, attributes, locations, quantities)

• Inventory available to promise (ATP) and sourcing

• Vendors, purchasing, and receiving

• Marketing (catalogs, promotions, pricing)

• Customers and prospects

• Order entry and customer service (including returns and refunds)

• Financial processing (credit cards, billing, payment on account)

• Order processing (selection, printing, picking, packing, shipping)

The order management system provides Daraz.com.bd one centralized place to manage
orders from all sales channels. Centralizing this in one system is critical to delivering a

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 superior customer experience by providing order status, on-time deliveries and meeting
customer expectations for buy fulfil and return anywhere.

IT use for e-business application:

As Daraz.com.bd is an online shopping portal for that it uses both intranet and extranet
apart Internet. Their specific functions are given below: -

Intranet:

Intranet is a private network that is contained within an enterprise. It consists of many

interlinked local area networks and also use leased lines in the wide area network. The
intranet includes connections through one or more gateway computers to the outside
Internet. The main purpose of the intranet is to share the company information and
computing resources among employees. The intranet is also used to facilitate working in
groups and for teleconferences.

For effective communication among the employees Daraz.com.bd Intranet software like
Microsoft SharePoint which helps the employees to be more productive, time efficient and
also helps to keep a continuous communication among various departments.
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 Extranet:

As daraz’s suppliers and customers are located at different places of the country that’s why
they use extranet. The extranet is used by LAN along with fiber optic cable. Through the
extranet daraz.com.bd exchange information regarding products, quantity, size etc. with
suppliers as well as with customers.

Internet:

Without internet where we can’t spend a day there for an online business organization like
daraz.com.bd it is unthinkable to conduct their business. Like others big companies it also
has its own server to run its website. Daraz.com.bd is an online business where there is no
alternative of internet. It has official Facebook page, website to increase its virtual world.
According to Bangladesh Telecommunication Regulatory Commission (BTRC), there are
80 million internet users in Bangladesh. So we can see the importance of internet to catch
the big portion of customers and rocket internet has unlocked the opportunity for
Daraz.com.bd to serve its customers as well as expand its customer base within a short time
via the internet.

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The web technology and software applications:

Daraz.com.bd is one of the modern and innovative web business which use web 2.0
technologies to allow its seller and buyer to interact with one another, provides multiple
payment system and shopping cart facilities. Web 2.0 technologies help to make the
website more flexible and user friendly to users. Advantages of using web 2.0
technologies:

a) Collaboration:
Besides providing information web 2.0 also allows customer to send message and purchase
products from the website. It also provides a new shopping experience for the end users.

b) Availability:

Web 2.0 technology helps daraz.com.bd to available at any time at any place.

Customers can browse their website at any time form anywhere to purchase
products.
c) Media:
By using web 2.0 technologies, daraz.com.bd, maintain a link to its website to other
social network like Facebook, twitter and Instagram. Customer can find their

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 contact information and Facebook page link, Instagram page link from the contact
option of their website.

Web content management strategy:

Daraz.com.bd is one of the most popular online a shopping site in Bangladesh. Large
number of people daily purchase lots of product from their website shops and a huge
number of suppliers deliver those products to daraz’s customer. For that they have to keep
update their web content on a regular basis focusing on customer as well as suppliers
preference. The team who manage this content is called Team D-force. They look after the
supplier’s updated picture, resolution, product description. They approve the supplier’s
product update on the website.

They are using JavaScript as their programing language and HTML5 as their mark-up
language. They have different image file formats. Most commonly suppliers used PNG,
JPG, and SVG to upload their products picture. To ensure their website speed they use
Ngnix web server and Cloud Flare web hosting besides that they don’t allow HD or Full
HD picture in their site. As their big chunk of customer browse their site from mobile
device that’s why they are very concern about their website’s responsiveness. They have

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 both desktop view and mobile view option in their website which provides a convenient
user system for different device user.

Desktop View of Daraz.com.bd

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 Mobile view of Daraz.com.bd

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DIGITAL STRATEGY FOR E-BUSINESS

E-Business Strategy:

Strategies are the blue print to accomplish company’s goal. Every company must have different

strategies to reach its goal. As Daraz is online based business they have some unique strategies to

satisfy its customers. Daraz does not spend too much in Television, Radio and other sources to

promote its brand like other company. In order to promotion, it creates hype in the market by

offering different offers. They are:

Fatafati Friday Offer:

The best exposer daraz.com.bd got from the campaign Fatafati Friday which was introduced for the

first time. On that occasion daraz gave huge discount on various product.

In this way daraz created hype and reach its targeted audience.

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Daraz App Code:

By using Daraz App Code anyone can get 500tk discount on his daraz order. But the

discount will be eligible when the minimum spending is 2000. The code will be valid only for the

first-time order.

Cash Back Offer:

If someone buys from daraz and pay through bKash, then the consumers will get 20% cash back.

Both companies get exposer by this exchange.

These are just some of the different business strategies and promotional offers that Daraz offers

from time to time. Overall, Daraz uses different kinds of discount offers and has a cost leadership

policy to gain competitive advantage in the market.

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Analysis of E-Business Strategy:

Strengths
• Number one online shopping
platform.
• Strong Customer & Supplier Base.
• Convenient Payment system.
• Diverse product Categories.
Weakness
• Lengthy delivery system.
• Less Control on Suppliers.
• Focusing only on Digital Marketing.
• Poor after Sales Service.

S
W
O
T

Opportunities
• Rapid Growth of E-commerce
Industry. Threats
• Increasing amount of internet • Increasing amount of online
user. retailer.
• Emerging of fast third-party • Lack of Cyber security.
delivery system.
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 Competitive Threat:

Daraz’s main competitors in the e-commerce industry are Picakboo, Kiksha, bagdoom othoba and
Priyoshop. They are responding to those competitive threats by improving their delivery system,
after sales service, return policy, pricing strategy and product selection. They are always concern
about their competitor. Their competitor threat is rokomary.com as they are also selling books like
daraz. Another emerging competitive threat will be if amazon.com comes in Bangladesh market as
a competitor of daraz.

E-BUSINESS SECURITY

Five IT Security Risks:

Malware:

Malware is one kind of virus, which might start running anytime in any electronic devices by
clicking randomly or searching randomly on web. Hackers create it to steal personal information or
to block down any web site.

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 Phishing:

Phishing is a way to trap people, like catching fish in a big river with a fishhook. In phishing
process, hacker gives false messages and some links to follow and if we follow them it will
automatically push us in a trap. Example: One might get a message to informing him that he got a
lottery and to proceed on and for that they need some personal information and need to follow
some mentioned links.

Third-party entry:

Cybercriminals use this route to make a distraction in the network. Their main target is attack the
major network through third-party entry points.

Customer data hacks:

It is a common problem now a day for e-commerce business. Hackers hack the customer’s data by
phishing techniques and sell those data in the underground market.

DoS:

“DoS” is distributed denial of services. Hackers use this software to slow down or block any
websites in between doing their regular ongoing works. For example: If I have a bad relationship

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 with any online store, I will send a load of requests to that side. For that, that side will show
waiting 1000 customers to enter. That will slow down or block their site for a temporary time.

Two risks which cause severe damage:

Phishing:

Phishing is a way to make people curious about any information getting and then make them fall
in a trap. In below, we got these points from a webpage called
“Panda”.

The harmful effects of phishing:

1. Theft of identity and users’ confidential details. This could result in financial losses for users
and even prevent them from accessing their own account.
2. Loss of productivity.

3. Excessive resource consumption on corporate networks (bandwidth, saturated email system)

Signs of a DoS Attack:

US-CERT (United States Computer Emergency Readiness Team ) stated some indicators of
DOS attacks
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o Degradation in network performance.
o An inability to reach a particular website.
o Difficulty accessing a website
o A higher than usual volume of spam email

Suggestions for security management:

Server Security:

We need to go for that web hosting company which can make ensured at their best about security
of server. That server must have CDN, SSL certificates and that hosting company also needs to
have plans for protecting our server from another environment with other website.
Antivirus and anti-malware software:

Usage of such software can enhance security. Because there are one of the protect devices
from dangerous virus.
Spam blocker:

Spam can slow down any process. It can be a problem for blogging and genetic contact. To keep
spam away from our websites, we need to use Akismet plug-in.

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 SSL Certificates:

SSL Certificates were option in the previous years. But now it is required to be used or suggested
to be used because it gives additional layer of encryption to the transaction.

CONCLUSION

It was really a great experience to work with Daraz and we have learned a lot from it. In the report
we presented Daraz’s products, services, e-business model, and its target market.

We also have discussed the competitive environment and have done a SWOT analysis of Daraz.
We have learned what type of software Daraz uses and their functions. We have analyzed,
explained and gave solutions to the various types of security threats that Daraz faces.

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References:

• How Daraz BD has revolutionized purchasing habits. (2017, September 25).

Retrieved December 10, 2017, from

https://www.daraz.com.bd/blog/2017/09/13/daraz -bdrevolutionizes-online-

shopping-habits/

An inner look at e-commerce giant: Daraz. (2015, November 23). Retrieved December 10,

2017, from http://www.thedailystar.net/lifestyle/check-it-out/inner-look-e-

commercegiant-daraz-176806

Pakistan's first FMCG e-commerce solution with daraz.pk. (n.d.). Retrieved December 10,

2017, from https://www.unilever.pk/news/press-releases/2014/unilever-

launchespakistans-first-fmcg-ecommerce-solution-withdaraz-pk.html

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