The path of least resistance: the rise of whitelabeled e-commerce

Creating the path of least resistance, three Pakistani-owned software as a service (SaaS) companies are taking merchants online with the least complex number of steps

When Rocket Internet launched Daraz.pk in 2012 in Pakistan, it brought with it an idea that had not been truly explored in the country in the online sphere. The idea only exists in retail stores and was easy enough to explain at the time. When business development managers of the European internet company met with prospective customers, be it manufacturers or merchants, they made them two offers they could not refuse.

One: an online presence in a store designed and built by a multinational company. Two: the chance to have an online presence within days with the technology of a European company. For the first proposition, products of the manufacturer or merchant would appear on the Daraz.pk website either on the home page, category page, or when a site visitor searched for them. For the second, the manufacturer or merchant would have a dedicated page showcasing just their product and their logo including brand identity.

And in a bid to create a sense of competition, Rocket Internet launched another online marketplace in 2013 called Azmalo.pk led at the time by Cheetay co-founder Ahmed Khan. After a few months of growing the top line, the business was rebranded to Kaymu.pk with the Azmalo team migrating as well. In 2016, Kaymu was merged with Daraz which was purchased by the Alibaba Group in 2018.

Across all three teams, the online marketplace business development teams of Rocket Internet faced resistance from merchants due to a number of factors. These included the expectation of dedicated inventory commitments for e-commerce sales, the subsequent double digit cut for the online marketplace which was at the time considered unfair, an impenetrable last mile customer experience, unclear cash flows, and unknown costs pertaining to items lost, stolen, or rejected.

Chief among the concerns was the lack of uniformity and content quality for the products being listed on the marketplace in addition to the checkout process considered unfriendly for the customer. To solve these issues, three Pakistani-led white-label e-commerce software as a service (SaaS) companies are attempting to speed up the process from offline to online.

A subsidiary of Pathway Capital Partners Ltd, Brandverse is a technology company that helps brands create what it refers to as “rich, immersive, omni-channel ready, brand-safe product content, purpose-built and future-proofed for digitally-enabled commerce businesses and their supply chains,” through the power of a cutting edge robotic camera solution.

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A subsidiary of Z2C Ltd, bSecure is a universal checkout solution aimed to help online merchants and digital publishers increase the checkout conversion rate by simplifying the checkout process. Unique to the Pakistan market, bSecure solves the problem created by forced account registration across a range of sites, which Econsultancy research suggests leads to 26% of shoppers abandoning their cart.

From the co-founder of Eat Mubarak, Blinkco is a whitelabel solution that allows all manner of brick & mortar (B&M) stores – be it HoReCa, pharmacies, or supermarkets – to create a branded mobile app or branded online store, accessing an proprietary analytics dashboard either way. Launched at the height of the pandemic-induced lockdown, Blinkco aims to help businesses build their direct to consumer channel, with demand varying depending on how strict lockdown measures are – which vary city by city in Pakistan.

What are they doing?

From the outside, Brandverse appears to be a company that consumer packaged goods (CPG) companies such as Shan Foods or National Foods approach to create a high-res catalogue of their products using a cutting edge robotic camera solution; but this is the soft sell. The actual business model relies on an app called Chikoo, which allows CPG companies to upload the photographs to a branded online store for direct selling.

If enough CPG companies pay Brandverse to take high resolution photos of their products – which can be ported to any online marketplace or even the Chikoo app – this investment can improve the quality of images uploaded to online stores of groceries stores such as Tee Em Mart, which is also an enterprise customer of the technology company.

“Content distribution flows into Chikoo,” said Raza Matin, co-founder of Brandverse. “Every new store creates network effects and we are connected to a database of over 250 million products. And merchants can create the products themselves alternatively through optical character recognition.”

In convincing CPG companies to invest in photographing their products, grocery stores such as Tee Em Mart can showcase products on their Chikoo website or app, with high resolution imagery signalling confidence in the shopper who may have experienced too many setbacks with sights with less than eye catching images.

“There could be an on-demand delivery player that needs to start a grocery delivery service yesterday,” said Matin. “We can help them get started because we have the data they require to populate their online store or app and we can do that very very quickly.”

Not to leave any money on the table, Profit believes that the above encapsulates the demand side of the monetisation model at Brandverse, with the supply side involving an application programming interface (API) which creates a bridge between Chikoo and courier apps such as Bykea and Careem. 

Given the technical talent at Brandverse, it is likely that the business will employ a reverse auction model which allows bikers of Bykea or Careem to bid on a chance to be the preferred delivery partner for any order than is placed within the Chikoo ecosystem – regardless of which CPG or B&M is the branded store. This is likely the same monetisation spin used at Blinkco.

Over at bSecure, the premise is very simple: to simplify the checkout experience. If Website A uses this universal checkout solution, the customer that goes through the site to complete a transaction will no longer need to re-enter her details at the point of checkout on Website B if bSecure is used there as well. This removal of steps is the very essence of the customer experience which banks on convenience. 

“We are not a payment gateway, we are a technology company that basically integrates with multiple banks,” said Adam Dawood, co-founder of bSecure. “We connect small and medium sized stores with banks. Essentially, problems with a payment gateway include technical issues and onboarding. We’ve made the technology part simple. All you need is a bank account for the onboarding process. For this reason, we’ve partnered with banks. Our platform conducts robocalls for merchants to confirm orders. Our clients no longer need to incur the fixed cost of a customer service agent. The business model is as such that we charge for additional services such as insurance, installment payments, etc. Jubilee and TPL insurance are the insurance providers we’re looking for. We’re aiming to be the super app for e-commerce.”

With the backing of Z2C Ltd, bSecure has created a range of additional features which include the ability to sell without a website. The product catalogue feature makes it so that a merchant with a presence on platforms such as YouTube or Facebook need not fuss over creating an entire site just to sell their products. By signing up to bSecure, the merchant can create a custom checkout page alone, possibly providing the customer assurance of legitimacy in the process. 

“As for Bsecure, we got the idea in February,” said Dawood. “Before we jumped the gun, we talked to a bunch of builders and asked if this solution worked for them. We gauged if there were potential customers. We noticed restaurants received a thousand orders a day through their website.”

As for the former head of Yayvo since its launch in 2015, the value proposition for bSecure was likely incepted in Dawood’s mind after a number of setbacks. He told Profit that there was once a crisis at Yayvo involving payment fraud worth 1.3 million rupees, which was the result of a hacker. 

“The bank said it was not their responsibility,” said Dawood. “We had to fight hard. Took three months for the Yayvo tech team to reassure the banks that they had checked their bases and the issue wasn’t from their side, three months to convince the bank it was their fault and three months for us to get the money. When we tell merchants that they’ll get money, they will get it.”

If the largest media agency is backing a checkout solution, it stands to reason that bSecure will converge at some point with additional products under Z2C Ltd with similar brand architecture such as bSports and bEntertainment. As reported by Profit, Z2C Ltd is working on its own connected TV business coupled with an over-the-top content platform that merges with programmatic advertising and real-time e-commerce as sources of revenue.

As part of the equation, Profit speculates that bSecure will undoubtedly be utilised as the only universal checkout solution available to merchants looking to target specific neighborhoods and zones in various cities for direct response campaigns. So the next time someone watching a drama or morning show comments on the outfit of an actress or anchor, the viewer will have the option to purchase said outfit or accessory directly from their CTV, with the purchase powered by bSecure.

Why does this matter?

Before the pandemic, the solutions listed above would struggle to gain traction among the majority of merchants due to analysis paralysis. The pandemic on the other hand has shown business owners of all sizes that speed to market trumps everything else. With Chikoo, bSecure, Blinkco, and similar one-tap whitelabel e-commerce solutions, business owners who find themselves having to adhere to lockdown orders – shutting off their principal customer touchpoints – are no longer unable to reach their customers.

Downloading the Chikoo app, any B&M business owner can sign on the platform and proceed to self-photograph the barcode of listed products – which acts as a verification for claimed products sold – after which the user needs to insert the number of product units the store has in stock. Similarly, the set up for bSecure – both in English and Urdu – is equally quick, with only the brief time needed to set up the content of the catalogue page and checkout page, generating a custom URL for each.

“The least amount of time it takes for someone to activate an account on our platform is six hours,” said Dawood. “It takes 20-30 hours for a sole proprietor, longer for limited companies because of internal approvals that they require. Once you log in to bSecure, you do not need to enter the same details when buying from other merchants also using bSecure.”

With Blinkco, enterprise customers can launch an online store or app within days, with a simple interface for customising the look and feel of the stores. In accessing these localised interpretations and subsequent executions of whitelabeled e-commerce stores, the speed to market equation has effectively been democratised.

Not always rainbows and butterflies

As reported by Profit, Unilever created SuperSauda and severed its relationship with Daraz – which hosted an online store for the CPG business – due to being denied the first-party data generated as a result of products being sold. This is a problem faced by CPG leaders when dealing with online marketplaces and e-tailers, which admittedly clearly mention this caveat in their terms of service.

While merchants using Chikoo, bSecure, and Blinkco will undoubtedly be able to take their businesses online overnight, they are still placing their eggs in one basket. The gradual erosion of third-party cookie tracking across Apple and Android ecosystems means that advertisers and merchants ought to actually own the app or website they use to close a transaction, capturing first party data in the process and the entire customer experience.

That said, in a bid to get one’s feet wet, starting off white a low cost, easy set-up whitelabel solution is the first step forward with traction building the business case for the sizable investment in the digital asset that is an owned dot com. Merchants that rely on these whitelabel solutions needs to recognise the inherent risks and understand that they do not actually own the stores, with a number of technical or operational issues pertaining to discoverability and last mile delivery bringing the brunt of a bad customer experience on the merchant and not necessarily the platform they are hosted on.

All in all, whitelabel solutions remove the time or investment required for creating an owned dot com from scratch, with the former being a matter of business survival or extinction during a pandemic. If COVID-19 creates a wave of deaths or diagnoses that results in yet another scricter lockdown, it will be direct to consumer solutions such as Chikoo, bSecure, and Blinkco that advertisers and agencies rely on to help B&M stores, HoReCa, or CPG companies reach their customers wherever they are.

Babar Khan Javed
Babar Khan Javed
Babar Khan Javed covers the advertising industry and marketing function in Pakistan for Profit. He can be reached on [email protected] with details about media, creative, and digital briefs, future projects, management changes, client wins or losses, and everything in between.

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