“

E-Business in Daraz
”

Final Report
Submission
MIS 205.4

Submitted To:
Raihan Sharif
Department of Management

Date of submission:
18. 04. 2019

Submitted By:
Section: 04
Names Student IDs
Sumaiya Binte Dewan 1530497030
Fariha Alam Nijhum 1631498630
Amatullah Timu 1713105630
Nishat Tahiyat Labonno 1631107630
Abrar Al Wasy 1711221630
 MIS205.4 E-Business on Daraz

Letter of Transmittal
Date: 24th December, 2018
Raihan Sharif,
Department of Management,

School Of Business and Economics, North

South University.

Dhaka -1229, Bangladesh

Subject: Final Project Submission

Dear Sir,
With due respect, we are delighted to inform you that we have successfully completed the final project
titled as “E-Business in Daraz” which we had been assigned for the MIS205 course of spring 2019.
Throughout the course, what we have learned so far is the true reflection of this report. In this report
we gathered our own ideas, skills, and importantly the knowledge we have accumulated from your
teaching. We request you to accept this report for your kind evaluation and we sincerely hope that you
will be pleased with our report.
By the end of semester, we are all pleased to have you as our mentor. Thank you for boundless support
throughout this memorable journey. In case if you have any additional information please do not
hesitate to contact with any of team members.
Sincerely,
Sumaiya Binte Dewan, ID: 1530497030
Fariha Alam Nijhum ID: 1631498630
Abrar Al Wasy ID: 1711221630
Amatullah Timu ID: 1713105630
Nishat Tahiyat Labonno ID: 1631107630
Tanvir Ahamed Shuvo ID: 1631755630

2
 MIS205.4 E-Business on Daraz

Acknowledgement

We are delighted and honored to express our heartiest gratitude to our respected faculty member,
Raihan Sharif, whose valuable guidance and advices directed and helped us vastly to execute this
project with sheer efficiency.

We are very grateful to the department of Management, North South University for introducing such
a well-designed course and facilities they provide which greatly helped us to execute this project in a
systematic way.

Finally, we would like to thank all those who helped us directly or indirectly for the smooth execution
of this report.

3
 MIS205.4 E-Business on Daraz

Executive Summary

Our prime motto of this project is to briefly discuss the concept of e-business and it’s different aspects.
Throughout the project, we have tried to present the findings of our outcome about the overall business
of Daraz Bangladesh. Daraz is actually an e-commerce firm which gives suitable online shopping
opportunity to it’s buyers in Bangladesh. We have discussed a lot of element including e-business in
Daraz, it’s revenue model, platform/infrastructure, Digital strategy for Daraz and it’s security. For that,
we have to gather a lot of data from different sources and analyzed it’s business operations in the
market. So this report shows us how the Daraz’s services work and its detailed functions.

4
 MIS205.4 E-Business on Daraz

Contents

Introduction .................................................................................................................................... 6
E-Business in Daraz ........................................................................................................................ 6
Mission: ....................................................................................................................................... 6
Vision ........................................................................................................................................... 6
Range of Services ........................................................................................................................ 6
Daraz E-business model: ............................................................................................................. 7
Drivers of E-Business adoption in Daraz. .................................................................................. 7
E-business revenue model ............................................................................................................... 8
Value Proposition: ....................................................................................................................... 8
Revenue model: ........................................................................................................................... 8
Online market place structure .................................................................................................... 8
Multichannel: .............................................................................................................................. 9
Revenue generating strategy: ..................................................................................................... 9
Intermediary based: .................................................................................................................. 10
Location of trade: ...................................................................................................................... 10
E-business platform/infrastructure .............................................................................................. 10
E-business application service (ERP, CRM, SCM) .................................................................. 10
IT use for DARAZ business application and its specific function: .......................................... 11
Web Software used by DARAZ in Bangladesh: ....................................................................... 12
Internet Applications: ............................................................................................................... 13
Web Content Management Strategy for Updating Data and Content, Speed and
Responsiveness and Site Optimization: .................................................................................... 13
Digital strategy for e-business ......................................................................................................... 13
Analyze E Business Strategy ..................................................................................................... 14
Competitive Threats .................................................................................................................. 20
E -Business security ...................................................................................................................... 20
IT security risks of Daraz ......................................................................................................... 20
Major risks that create severe damage ..................................................................................... 21
Security management: .............................................................................................................. 21

5
 MIS205.4 E-Business on Daraz

Introduction

Daraz is one of the leading online companies in Bangladesh. It’s the largest e-commerce site in
Bangladesh. It is a business to customer (B2C) platform. It officially started its journey in February
2015. It’s a marketplace for its customer where an individual can shop different things in online such
as electronics, home appliances, fashion, kid’s items and many more. People get all sorts of products
and services from website. Daraz Bangladesh has been fully acquired by Alibaba Group in May 2018.

E-Business in Daraz

Mission:

The company’s mission is to become world’s largest e-commerce platform outside USA and china. It
identifies new business models, untapped markets and entrepreneurs.

Vision

Its vision is to capture the minimum share of consumer online shopping expenditure in the market.

Range of Services

Daraz provide their services based on e commerce and the do have active website and mobile
application to display their products and to reach their prospective customers. Currently they have 12
ranges of category to display their product on website and there are many subcategories under them.
Beside product and services Daraz Bangladesh provide different kinds of facilities to its customer like
free product return policy, discounts code, voucher and various payment options including bkash, cash
on delivery, bank transaction, EMI. It provides various products at affordable price. The main goal of
Daraz Bangladesh is to provide the best product in the best price and to introduce latest products in
the market for the customers.

6
 MIS205.4 E-Business on Daraz

Daraz E-business model:

 Value proposition & market or audience:

Daraz Bangladesh website includes different categories and sub-categories through which
consumer can choose their desired products. It offers women’s and men’s clothing, kid’s toys,
phones & tablets, home accessories, sports & travel, beauty & health and other categories. At
first stage, the website offered fashion items. Gradually they get able to gain trust of customers
and starting offer each and every category.
 Revenue model:
Advertising supported revenue model and fee for service revenue model.
Seller fixes the price of the product which are offered by Daraz. Daraz gets commission
whenever sale occurs. For every sale, it gets commission which is their main source of revenue.
 Competitive environment, value chain and marketplace positioning:
Daraz faces competitive environment. It has direct and indirect competitors. It has built its
logistics company- Daraz Express (DEX) designed for e-commerce operations to overcome the
logistics challenge in its market and to raise the standards for the industry.
 Representation in the virtual world:
Daraz promotes through online since they have facebook page and e-mail marketing. In recent
years Facebook page promotional activities have increased in significant number. There is a
scope of affiliate marketing.

Through e-business operation, Daraz Bangladesh successfully operates in our country as well
as other countries. E-business is considered as a separate and profitable field business. E-
commerce help to gain competitive advantage now-a-days in Bangladesh.

Drivers of E-Business adoption in Daraz.

Daraz has adopted e – business successfully through their strong global brand presents as an e business
organization, through utilizing their strong financial position to come up with new online services and
through a strong and efficient work force that have strong knowledge on ecommerce and online
marketing. And these are daraz’s core drivers.

7
 MIS205.4 E-Business on Daraz

E-business revenue model

Value Proposition:

Value proposition refers to the all sets of benefits and values that are promised to the customer
by a company. It is a declaration or assurance that the company will deliver all the desired values
to satisfy the needs of their customers. Different types of customers’ problems solution and
improving their conditions are also explained here. Daraz tends to provide products which are
100% genuine. It takes orders from almost all over the Bangladesh. It is a great solution for all
customer needs. Daraz serves a wide range of customers. It has more than 100,000 products including
cloths, electronics and household products on its store which are great variety of goods across all
categories. A customer can find all things he wants under its website and he can also do all the
agreements of purchasing via online. He can get fast home delivery anywhere across the country. Daraz
has many stores in Bangladesh. It has the click and brick morter business model to benefit various
members of a customer base. Customers can get product through online and offline. The company is
also working to improve and expand the categories of products for its customers. Daraz gives its
customers many types of safe payment solutions, which are Cash on Delivery (COD), and debit/credit
card payments.

Revenue model:

It refers to a model in which a company’s different sources of generating revenue is defined. Daraz
follows advertising supported revenue model and fee for service revenue model. There are ads in the
website that create revenue. They also earn revenue by selling their products through their website and
showrooms.

Online market place structure:

It refers to the different ways of interaction between buyers and sellers over the internet.

8
 MIS205.4 E-Business on Daraz

Multichannel:

The combination of direct and indirect methods such as retails, wholesalers, distributors, internet, and
order catalogs to interact with customers. Daraz uses different ads, websites and catalogs to interact
with its customers.

Click and brick is a business model in which a company operates both an online store ( the clicks) and
an offline store (the bricks) and integrates the two into a single retail strategy.

Click: Click refers to the online presence of a company providing its products and services over the
internet. Daraz uses online to sell products. A customer can order products from daraz’s online
shopping system and use them.

Brick and Morter: Brick and morter refers to the physical presence of an organization or business in
a building. It has warehouses in uttara, Mirpur, Gazipur in Bangladesh.

Market segmentation: Daraz targets young people modern natures in its online business. Because
young people prefer to buy from online rather than from shops. It has warehouses for the customers
who feel comfortable in buying from shops.

Revenue generating strategy:

Daraz offers two types of services. One is allowing lower price but giving permission to display ads
in the event from third parties. Other is letting the customer have an order free product with an extra
price.

Pricing strategy: The prices on Daraz are defined by the sellers. They use different strategies to
determine prices of products.

Product strategy: Daraz Bangladesh ltd basically does not generate any product. It is an online
marketplace where different types of sellers sell their product. Customers can purchase their desired
products from daraz. They can also buy products from its E shops.

Market place structure: The collections of factors that determine how buyers and sellers will
interact in the market.

9
 MIS205.4 E-Business on Daraz

Intermediary based:

Intermediaries help to connect a link between seller and buyer for buying and selling products. Daraz
uses the following intermediaries in its online business:

 Internet connections,
 Online browsers,
 Google,
 Phone call,
 mail,
 website order,
 Mobile Banking Support,
 Smart phones App.

Daraz uses retailers, wholesalers for its offline business.

Location of trade:

Daraz sells its products online it has its own website for selling products

E-business platform/infrastructure

E-business application service (ERP, CRM, SCM)

ERP:

For inventory management shipping and payment, Daraz uses Enterprise Resource Planning (ERP),
which helps them to keep track of all their records of transaction and data. They can also track orders,
purchase orders, payrolls, cash, etc.

CRM:

CRM at Daraz revolves around the principle of database marketing, since there is no personal
interactions and virtual network is the only available method which needs to be handled carefully.
10
 MIS205.4 E-Business on Daraz

Since Daraz is an intermediary organization, therefore Customer Relationship Management is an

important tool for increasing customer base and overall profitability of the venture.

SCM:

By using Supply Chain Management software, Daraz has remarkable changes. It gives smooth
execution to all tasks in order to achieve long-term profitability in a solid way. Most of the time supply
chain management flows is divided into 3 basic flows that are:

1. The Product Flow

2. The Information Flow
3. The Financial flow

Therefore, Daraz is switching to adapt such new innovations as per the marketing trends. The
implementation and purchasing of supply chain management can bring some key benefits that SCM
convey Daraz to get top five benefits of supply chain management software which are includes:

1. Reduce Cost Effects

2. Raise Output
3. Raised Business Profit Level
4. Boost Cooperation Level
5. Lowers Time Delay in Processes.

IT use for DARAZ business application and its specific function:

Daraz uses all 3 Information Technologies to run its functions.

1. Internet: Daraz has its own website, which is open for all. It is like a regular website where anyone in
the world can visit and buy things.

2. Intranet: Daraz uses an intranet network, which is for their own use. Only the inside people, who are
the employees and executives, can use it. Confidential information which cannot be shared with
outside world is stored here.

11
 MIS205.4 E-Business on Daraz

3. Extranet: Daraz also uses extranet. It is basically an intranet which is accessible by a group of few
authorized people. Daraz has a firewall that prevents their data from getting stolen. They control the
access between intranet and extranet. They give out usernames and passwords or IP’s to authorize
people so that they can access their data.

Web Software used by DARAZ in Bangladesh:

Java Script:

JavaScript is a lightweight, object-oriented, cross-platform scripting language, mainly used within web
pages.

JQuery 1.11.0:

JQuery is a JavaScript library that simplifies HTML document traversing, event handling, and
animating and Ajax interaction. Originally developed by John Resig.

HTML5:

HTML5 is the fifth revision of the HTML standard.

Gzip Compression:

Gzip (GNU zip) is a file compression algorithm.

Comodo:

Comodo provides IT services, software, and SSL certificates under various brand names.

Google Analytics:

Google Analytics is a free service to get detailed statistics about the visitors of a website, provided by
Google.

External CSS:

12
 MIS205.4 E-Business on Daraz

External Cascading Style Sheets define style rules in a separate CSS file.

Internet Applications:

BLOGS:

DARAZ has its own blog site which helps them to inform their customers briefly about the core
services they provide. This is a media where everyone is open to contribute and visitors find it very
interesting to interact with different people thus helping them to rely on DARAZ based on the positive
opinions.

SOCIAL MEDIA:

Facebook: Search engine optimization and search engine marketing.

They also use Instagram, Twitter, and LinkedIn to reach and communicate with the customers.

Web Content Management Strategy for Updating Data and Content, Speed and Responsiveness
and Site Optimization:

Daraz Bangladesh manages all its contents and software very professionally. The software
management team works on updating data and content which they basically use to reach the customers.
They have all necessary protection to keep all the data safe. They have all updated version of software
to manage and protect the sites. They are bound to do so as a responsible business organization.

Digital strategy for e-business

Daraz have separate e-business strategy for their commodity products. Mostly, Daraz has separate
inventory for commodity products. They directly do business with commodity brands and buy products

13
 MIS205.4 E-Business on Daraz

from them at discount and sell them through their website. After receiving order form customer for
commodity products they distribute the products through their own delivery man.

Analyze E Business Strategy

SWOT analysis

Strength

1. Strong financial position to run the business and it has the highest amount of asset and capital
among other e-commerce business entities

2. Strong brand presence and great appeal among customers.

3. Strong and efficient management body

4. Adequate amount of working capital and cash in hand to maintain day to day activities and website
maintenance

5. User-friendly website, visitors and customers can easily look for their particular product.

6. Easy and reliable payment processes. Customers can pay through credit or debit card, Bkash, and
COD service (Cash on delivery)

7. Easy and convenient order service facility for users through the website. ( Pre-order service)

Weakness:

1. Less reliable and poor quality of products.

2. Inefficient supply chain that leads to lengthy product delivery to the customer and also different
delivery date for a single customer who has ordered several products at a time.

3. Technical and tactical issues in the retailer and vendor recruitment process that leads to decline in
sales.

14
 MIS205.4 E-Business on Daraz

4. Poor after sales service.

5. Lack of experience of the management team that leads to failing sales strategy (11:11 flash sales.)

6. More emphasize on product-based marketing strategy rather than customer-based on website.

7. Faulty planning and futile sales strategy (more emphasized on discount than quality)

Opportunity:

1. Huge growth potential as it has high brand value and high growth in sales within only six years of
it’s establishment.

2. The current economic and political stability of Bangladesh can lead Daraz to gain more capital
and foreign investment.

3. Increase in Income level of Bangladeshi people are influencing them to buy more through online
and that can boost up Daraz’s sell.

4. Government and other agencies are promoting e-commerce.

5. Huge range of potential customer.

6. Growing demand for e-commerce

7. Research and development of technology can reduce the operating cost and increase the profit
margin.

Threat

1. Intense competition from existing and upcoming (Amazon) E-commerce and physical retail
entities.

2. Unpredictable and saturated market.

3. Rising corporate tax

4. Inflation and economic recession.

15
 MIS205.4 E-Business on Daraz

5. Previous faulty strategies may influence the customers to move towards competitors.

6. Less loyal customers.

Porter’s five forces

Current rival – High: Existing competition among e-commerce sites is high. A large number of e-
commerce entities are available in Bangladesh that is actively performing and competing against
Daraz. Not only e-commerce sites, according to Bangladesh’s perspective physical outlets and stores
also create immense competition. Bagdoom, Pickaboo, Chaldal.com, othoba.com, clickBd.com etc.
are the major competitors. Competitors use various marketing strategy such as discounts, augmented
services, free coupon to attract customers.

The threat of new entrants – High: The threat of entering new e-commerce business is high. As it
does not incur a huge amount of cost and a huge amount of potential buyers are available. So, new e-
commerce entities find Bangladesh as a great opportunity to start their business. And also, as a matter
of concern, there is a high opportunity that Amazon is coming in Bangladesh and that is a huge threat
for Daraz and also for existing competitors.

Bargaining power of buyers – High: Availability of so many alternative options for e-commerce for
same products leads to the high bargaining power of consumers. Moreover, increased income per
person also leads to high purchasing power. As similar types of products are offered in many e-
commerce sites buyers look for more information on products to compare price.

Bargaining power of suppliers – Low: As suppliers don’t hold any differentiated products and a
number of suppliers are available for similar types of products that’s why the bargaining power of
suppliers is low

The threat of substitutes – High: As Most of the e-commerce site provide similar types of products
and services threat of substitutes is high. If customers become dissatisfied with the service they will
move to the competitors.

16
 MIS205.4 E-Business on Daraz

PESTEL

Political

Political situation of Bangladesh is stable and no riot is going on. It is good news for e-commerce
businesses. Again government initiative to zero tolerance against corruption will be helpful for e-
commerce entities as they will face less obstacle in public authorization in IT sectors.

Economic

The economy is booming and living of standard is uplifting in Bangladesh that is optimizing for e-
commerce site to boost up their sales.

Technology

The 4th wave of technological advancement is knocking at door and people are very much aware of it
and e-commerce sites can take this movement to advance their services and to reach their customer
through more convenience services, reducing cost

Social

For e-commerce sites, the core social form is the buying behavior of the consumers. People like to
enjoy more time together and cultural festive is widely celebrated, so demand is high. The buying
behavior of customers varies from occasion to occasion. Here in Bangladesh young group (age 11-30)
are abducted by modern trend and buying behavior influenced by modern trend while baby boomers
rely on tradition and religious views.

Environmental

Govt. is very much strict regarding rules and regulation for environmental degradation. Now, People
are not only concerned about the physical environment but also of Virtual environment. So Safe,
Secure virtual environment has to be maintained by the e-commerce business entities.

17
 MIS205.4 E-Business on Daraz

Legal

Less legal restrictions are applicable for e-commerce business but any kind of fraudulent activities and
Virtual crime and hacking are strictly maintained and legislation of Bangladesh has particular clauses
against virtual crime and fraudulent activities.

Strategic Agility

“The concept of strategic agility describes a business's ability to remain fluid, changing and updating
operations as innovations become available.”

Daraz applies strategic agility to develop their service, to provide more options to it’s customers and
also to develop operation. Daraz not only tries to attract customers by offering a vast number of
products with lucrative discounts. From the very beginning, their prime motto was to satisfy their
customer with services based on digitalization. That’s why they have come up with DarazMAll, Global
collection, Top Up & eStore, track my order, and online cash back services using a single website.
And also to cope up with these services they have developed their operation quality from time to time.

Competitor analysis:

In Bangladesh, the top five competitors of Daraz are Pickaboo.com, clickBD.com, Chaldal.com,
Othoba.com, Ajker deal.com, Bagdoom.com. Competitor analysis of Daraz is done based on the
information of Similar Web that is a website that provides information about e-commerce site.

Competitor Analysis
Bagdoom

Ajkerdeal

Othoba

Chaldal

ClickBd

Pickaboo

Daraz

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Avg visit duration Pages per visit Bounce rate Search Social media Facebook

18
 MIS205.4 E-Business on Daraz

Total Visit

3500000
3000000
2500000
2000000
1500000
1000000
500000
0

Daraz Pickaboo ClickBd Chaldal Othoba Ajkerdeal Bagdoom

Total Number visits, Avg visit duration, Pages per visit, Bounce rate these represent the measurement
of reach and growth of the sites, how much lucrative and useful are the website contents to the visitors
and the overall snapshot of the performance of the sites. And traffic from social media, search,
Facebook represents the attractiveness and efficiency of virtual marketing tools.

Daraz is comparatively ahead from its customers in all the means apart from traffic through social
media. Daraz needs to emphasize more on their virtual promotional activities as only 5% responses
are coming out of social media which is very low from it’s competitors.

Recently Daraz has faced issues about the quality of products and their retail intermediaries that results
in a sales decline.

Among all the competitors, Pickaboo’s growth and traffic rate has become a major threat for Daraz as
only within 3 years of their journey they reached 1 million visitors.

Market Positioning

Daraz follows Cost-leadership strategy. The core motto is to provide best quality service at an
affordable cost for stylish and innovative minded people.

19
 MIS205.4 E-Business on Daraz

Competitive Threats

 Various range of e-commerce companies has been operating in Bangladesh for a long period
of time. Already they have created a certain amount of visitors of their own. Breaking into the
saturated market with significant and distinct image needs to go through several marketing
steps as well as service development. So to hold existing market presence, Daraz’s promotions
and service providing need to be developed and also needs to increase its competitive
advantage.

For an e-commerce business to maintain the assurance of quality product with the best service is
quite difficult and it has become a major issue for Darz and threat of constant decrease in sales. So to
overcome this Daraz need to choose their retailer more cautiously and need to improve their supply
chain dept.

E -Business security

IT security risks of Daraz

1) Daraz is one of the largest online shopping in Bangladesh. Daraz offer varieties of product in
their website. As they are one of the largest online shopping they can have some security
threats in their e-business. The five major IT security risks which can negatively impact
Daraz’s e-business are given below:
a) Credit card fraud: Credit card fraud risk occurs when it is conducted by a person who used
a stolen card to make an online purchase.
b) DDoS Attack: A targeted server attacked by overpowering the target and an overflow of
internet traffic. It interrupts the normal traffic of the server. It is a common method for a
hacker to take down the server’s normal speed.
c) Operational glitch: It is a temporary power failure in a network service.it can occurs. It is
also called power glitch. It occurs if the condition of the software program or department of
IT program is unwell.
d) Payment conflicts: If there is more than one recipient, the system can make error. It can
occur by technical glitch and irregularities.
e) Men in the middle attack (MITM):In this threat, an invader illegally changes the
communication and transmits between two parties when they are communicating with each
other in the business.
20
 MIS205.4 E-Business on Daraz

Major risks that create severe damage

Among these security risk credit card fraud and DDoS attack are two potential risks. Because
it cannot be predict before. These risks can decrease the sales volume and productivity which
results an ultimate loss.

Security management:

There are some security managements which can prevent or manage the risk of credit card
fraud and DDoS for Daraz.
a) Daraz can update their database constantly.
b) Making a list of specific customer Daraz can identify who is visiting their website
more often.
c) Using filters Daraz can observe specific online user by name , credit card, password,
email.
d) A real time alerts can help Daraz to get the notification of the attack and prevent it
immediately and it will also help to support security management.
e) Scanning of web services and network asset regularly can reduce the risk of attacks.

21