Tribhuvan University
Public Youth Campus
Dhobichaur, Kathmandu
A Case Study
Report On
Daraz
Submitted By:
Diksha Kaphle
Shrisha Adhikari
Sandeep Gaire
Submitted To
Faculty of Management (E-Commerce)
Public Youth Campus
Tribhuvan University, Kathmandu
Supervised By
Er. Sanjay Kumar Sah
In the partial fulfillment of the requirement for the degree of Bachelor of
Business Administration (BBA)
Kathmandu
February, 2024
Abstract
In just over a decade, Daraz has revolutionized Nepal's e-commerce landscape, emerging as a
pivotal force in the region's digital economy. Founded in 2012 with a vision to provide a
comprehensive selection of products to a global customer base, Daraz has become the go-to
destination for consumers, sellers and enterprises alike. Offering an extensive array of products
spanning electronics, fashion, home essentials, and beauty items, Daraz has established itself as
a one-stop shopping destination.
Its business models encompass Business-to-Customer (B2C), Business-to-Business (B2B), and
Customer-to-Customer (C2C) interactions, facilitating seamless transactions and fostering a
vibrant marketplace. Daraz prioritizes customer satisfaction through user-friendly interfaces,
secure payment gateways and efficient delivery services, supported by transparent customer
reviews and ratings .Addressing challenges such as logistical complexities and building trust,
Daraz has forged partnerships with reliable courier services and ensured product authenticity
and responsive customer service.
The report starts out by explaining the organization's management structure and emphasizing
important players who are leading the business to success. After that, it discusses important
issues that Thulo.com faces in its ever-changing operational environment, such as
competitiveness, logistical limitations, and cyber security worries.
A comprehensive SWOT analysis reveals the opportunities, threats, and internal and external
strengths and weaknesses of the organization. Daraz’s technological innovation, robust brand
presence, and varied product variety are its key differentiators. The competition and logistical
difficulties, however, are significant drawbacks. Threats include fierce rivalry and unclear
regulations, while opportunities for growth include joint ventures and expansion into
unexplored regions.
Moreover, Daraz contributes significantly to Nepal's digital economy by empowering local
businesses, creating employment opportunities, and fostering entrepreneurship through its
seller programs. Daraz's journey exemplifies how strategic planning, customer-centric
approaches, and adaptability can propel an e-commerce platform to unprecedented heights,
signaling a promising future for digital commerce in Nepal and beyond.
ACKNOWLEDGEMENT
This study has been prepared for the partial fulfillment of Bachelor of Business
Administration (BBA). I am very grateful to the Department of Management, Public Youth
Campus for giving me the key and opportunity to accomplish this Case Study.
I would like to take this opportunity to express my profound gratitude to supervisor Er.
Sanjay Kumar Sah, faculty of E-Commerce for his support and guidance that helped this
case study at every stage and getting things done by sharing his valuable ideas and
knowledge. His wide knowledge and logical way of thinking have created a great value to us.
Therefore, we would like to convey our special thanks to him for his valuable guidance.
I would also like to thank Mr. Balram Thapa, Campus Chief, Mr. Rameshwar Acharya,
Program Director, PYC’s lecturers as well as others who have been directly or indirectly
providing their encouragement & helping me with their valuable comments throughout this
case study.
I am extremely grateful towards Daraz for giving me permission to visit their office and for
their overwhelming support and cooperation throughout the process which made it possible
for me to conduct the study.
Student Name (Reg. No.)
BBA 6th Semester
Diksha Kaphle(28711/20)
Shrisha Adhikari
Date:
APPROVAL SHEET
This is to certify that the report entitled ‘Daraz’ is an academic work completed by the
‘Diksha Kaphle, Shrisha Adhikari’& Sandeep Gaire is a case study carried out by
fulfilling the nature and standard required for the partial fulfilment of the requirement for the
Degree of Bachelors of Business Administration (BBA) at Public Youth Campus, affiliated to
Tribhuvan University under the guidance and supervision of course instructor and college
management.
……………………………….
Er. Sanjay Kumar Sah
Acharya Supervisor
Date:
……………………………….
Rameshwar
Program Director
TABLE OF CONTENTS
UNIT-1 INTRODUCTION...................................................................................................... 1
1.1 Objective of the Study.......................................................................................................... 2
1.2 Research Methodology......................................................................................................... 2
1.3 Limitation of the study......................................................................................................... 3
UNIT-2 ORGANIZATIONAL STUDY.................................................................................. 4
2.1 Introduction to the organization........................................................................................... 4
2.2 Business Structure................................................................................................................ 5
2.3 Services Offered................................................................................................................... 6
2.4 Working of Daraz ................................................................................................................ 6
2.4.1 The Buying Process............................................................................................ 7
2.4.2 The Selling Process............................................................................................ 8
2.5 Business Model.................................................................................................................... 8
2.5.1 B2B Business Model.......................................................................................... 8
2.5.2 B2C Business Model.......................................................................................... 9
2.6 Organizational Challenges..................................................................................................10
2.7 Market Analysis..................................................................................................................11
2.7.1 Strengths........................................................................................................... 11
2.7.2 Weakness...........................................................................................................11
2.7.3 Opportunities.................................................................................................... 12
2.7.4 Threats.............................................................................................................. 12
UNIT-3 NETWORK INFRASTRUCTURE AND EDI.......................................................13
3.1 Introduction....................................................................................................................... 13
3.2 Types of Network used in Daraz........................................................................................ 13
3.3 Software Agents................................................................................................................ 14
3.4 EDI and Daraz ................................................................................................................. 15
UNIT-4 ELECTRONIC PAYMENT SYSTEM IN DARAZ.............................................. 16
4.1 Introduction........................................................................................................................ 16
4.2 Security System in Daraz................................................................................................... 16
4.3 Payment Problems in Daraz............................................................................................... 17
UNIT-5 NETWORK SECURITY SYSTEM........................................................................18
5.1 Introduction........................................................................................................................ 18
5.2 Security System in Daraz................................................................................................... 18
5.3 Security Threats..................................................................................................................19
5.4 Security Measures ............................................................................................................. 20
5.5 Types of security System Used in Daraz............................................................................21
UNIT-6 ONLINE MARKETING AND E-ENVIRONMENT IN DARAZ....................... 22
6.1 Introduction........................................................................................................................ 22
6.2 Importance of online Marketing in Nepal.......................................................................... 23
6.3 Online Marketing Tools used in Daraz...............................................................................24
6.4 E-Environment................................................................................................................... 25
6.5 SLEPT Analysis................................................................................................................. 26
UNIT-5 CONCLUSION AND SUGGESTION....................................................................28
7.1 Conclusion..........................................................................................................................28
7.2 Suggestions and recommendations.................................................................................... 29
REFERENCES.......................................................................................................................30
CHAPTER-1 Introduction
Background introduction of Daraz
This report draws upon secondary research conducted via internet searches, consulting
library resources, and reviewing pertinent literature. Daraz has emerged as a leading online
retail platform in Nepal, experiencing rapid growth across South Asia and Southeast Asia.
Founded in 2012 by Muneeb Maayr (Founder) and Farees Shah (Co-Founder) under Rocket
Internet, Daraz initially focused on online fashion e-commerce in Pakistan. Daraz Group
now operates e-commerce platforms and logistics services in Bangladesh, Myanmar, Nepal,
Pakistan, and Sri Lanka, with Bjarke Mikkelsen serving as the current CEO. In May 2018,
Daraz Group was
.
acquired by the Chinese e-commerce giant Alibaba Group from Rocket Internet
Daraz, a powerhouse in the e-commerce realm, has reshaped thelandscapeof online
shopping for Nepali consumers since its inception in 2012 by Jack Ma, the visionary
founder. Originating in Hangzhou, China, the platform initially aimed to empower small
Chinese exporters and entrepreneurs by providing themwithaglobal sales platform.
Through strategic partnerships and milestones like the Alibaba-Yahoo collaboration in 2005
and the debut of Alibaba.com in 2007, Daraz solidified its position. Global expansion
ensued with ventures like AliExpress in 2010 and itsIPO in 2014, establishing offices
worldwide. Central to its success is a customer-centric approach, ensuring authenticity, easy
returns, and responsive service, amplified by a robust mobile app experience.
Furthermore, Daraz's impact extends beyond commerce, contributing to Nepal's digital
economy and fostering entrepreneurship. In essence, Daraz's journey exemplifies how a
blend of strategic vision, adaptability, and customer focus can propel an e-commerce giant
to remarkable success.
1
1.1 Objective of the study
The primary objectives of this study are:
❖ Investigate the influence of Daraz's e-commerce platform on the participation
of Nepalese SMEs in international trade.
❖ Assess the impact of Daraz's technological advancements such as mobileapp
development and logistics optimization, on e-commerce dynamics and
consumer behavior within the Nepalese market.
❖ Analyze Daraz's role in shaping domestic and regional trade patterns, and
Explore its implications for Nepal's business landscape, economic growth and
market integration with neighboring countries.
❖ Examine the business model of Daraz Group as a subsidiary of Alibaba,
focusing on its operational strategies, revenue streams and partnerships within
the Nepalese market.
1.2 Research Methodology
Our report is based on research. Therefore, we have made stringent efforts to collect data
from various sources to ensure that our report encompasses a wide range of information,
facts, and figures. We have gathered data from both primary and secondary sources, although
we have relied more on secondary sources.
Under the secondary method, we collected information by visiting the websites
www.daraz.com.np and www.google.com, which provided a wealth of informative resources
that proved to be vital. Similarly, under primary sources, we obtained information from Daraz
personnel via telephone interviews and contacted users of Daraz to understand their
perceptions towards online shopping.
2
1.3 Limitation of the study
This report is a partial requirement of the practical exam in E-commerce for the BBA sixth
semester conducted by Tribhuvan University. The report has been prepared and submitted
within a prescribed limited time. Although we did our best to conduct a comprehensive study
of this topic, there are still some limitations, which include:
● Since the report is based on secondary data, the findings are derived from the collected
information.
● Personnel contacted via telephone were hesitant to provide us with a substantial amount
of information, thus the primary data collected may not be 100% relevant.
● This report adheres to the prescribed format by Tribhuvan University for the practical
exam report of the Bachelor's degree.
● The internet and publications lacked sufficient information on the subject of e-commerce
activities in Nepal.
● The study has been conducted under limited time constraints. Thus detailed analytical
study could not be conducted.
3
CHAPTER 2: Organizational Study
2.1 Introduction to the organization
Daraz has established itself as a renowned and successful company, facilitating hundreds of
transactions daily. The company embarked on its journey nearly 9 years ago with the goal of
transitioning the offline market to an online platform and offering unbeatable deals. Daraz
has consistently provided goods at competitive prices by minimizing retailer margins through
direct engagement with wholesalers and traders. The company operates within the realms of
both B2B (Business to Business) and B2C (Business to Consumer) transactions, establishing
itself as a pioneer in the industry.
Daraz empowers customers to choose the best products at the most affordable and reasonable
prices. With features such as detailed product information, photos, customer questions, and
reviews, customers can confidently make informed purchasing decisions online. Daraz also
facilitates easy exchanges for items like clothing, allowing customers to request size changes
at no additional cost. On average, Daraz attracts over 15,000 visitors daily, translating into
more than 600 transactions per day. The strong web presence of Daraz has significantly
shaped its different marketing strategy .
Fig No.1: Daraz website
Internet forums serve as platforms where individuals share their feedback about Daraz. The
active presence of Daraz in these forums and on social media platforms is highly
encouraging. Maintaining a Facebook page and building a following on Twitter are effective
ways for the company to promote its new arrivals and special offers. Daraz has expanded its
product offerings across multiple categories, demonstrating the company's desire to promote
and connect with a global audience.
4
2.2 Business Structure
Daraz.com.np is a leading online platform in Nepal that exclusively offers branded products,
with no local items available. The website has experienced rapid growth and is recognized as
the number one online marketplace in the country. Daraz.com operates differently from
typical organizations, with eight distinct departments.
1. Sales: This department is responsible for sourcing quality products from buyers,
ensuring excellent service, and on boarding sellers onto the Daraz platform. They also
coordinate product photography and negotiate commission rates with sellers to
provide competitive fixed prices on the website
2. Customer Service: Customer Service at Daraz.com.np is distinctive, involving order
validation, processing, receiving inbound calls, and addressing customer complaints.
The primary goal of customer service is to ensure customer satisfaction to encourage
repeat purchase.
3. Public Relation: The Public Relations department at Daraz manages relationships
with various stakeholders, organizes events, and handles the organization's reputation,
including crisis management.
4. Quality control: The Quality Control department is responsible for product listing,
providing details and approving listings, uploading and editing product pictures, and
ensuring product quality before they are uploaded to the website.
5. Seller management: The Seller Management department at Daraz oversees seller
accounts, assists with advertising, manages orders, and supports sellers in becoming
top performers. They work to stimulate seller sales through promotions and address
any quality or delivery-related complaint.
6. HR: The Human Resources department handles recruitment, selection, compensation,
promotions, interviews, leave management, turnover rates, and overall performance
record
7. Finance: The Finance department is responsible for financial planning, investments,
expense management, and future forecasting.
8. Administrator: The Administrator department interacts with country managers,
oversees overall planning, monitors workforce dynamics, and implements operational
changes across various sectors within the organization.
5
2.3 Services offered
Daraz is an instant solution for purchasing varieties of items of goods under a same website.
Different sellers offer verities of items of products on Daraz website. Buyer can easily find
and know about the products from Daraz’s webpage and order them easily. The product lines
of Daraz are shown below:
Men’s Fashion
Women’s Fahsion
Kids
Clothing
Footwear
Accessories
Bags and Wallets
Men's Grooming
Clothing
Footwear
Bags and Wallets
Jewellery
Beauty Care
Accessories
Women's Grooming
Toys
Accessories
Babycare
Footwear
Toys
Pet supplies
Health and beauty
Electronics and home supplies
Dog Food
Dog accessories
Cat Food
. Cat Accessories
Beauty Tools
. Hair Care
. Fragrances
. Makeup
. Mens Care
. Skin Care
. Food
. Supplements
. Home living
Mobile
Tablets
Audio Videos
Computer
Home Appliances
Printer
Security System
. Activities
. Gifts
. Home Appliances
. Accessories
. Decors
. Musical instruments
. Furniture
. Home decors
. Frames
. Sports
. Kitchens
. Adventures tools
. Gardening
Table 1: Items Available in daraz
6
Automobiles
Riders Accessories
Gloves
Helmet
Auto parts
Gears
2.4 Working of Daraz
Daraz provides a very flexible and user-friendly registration process for both sellers and
buyers on their website. Below, we describe the registration process for both buyer and seller.
2.4.1 The Buying Process
Daraz offers a flexible and user-friendly registration process for both sellers and buyers on
their website. To purchase items on Daraz, a buyer must first create an account by providing
basic information such as name, address, birthdate, and phone number. After registering, the
buyer can select desired items and place an order by clicking "Buy Now”.
Upon placing an order, Daraz sends a text message or email containing a validation code to
confirm the purchase. If the buyer validates the order, the seller is notified and responsible for
contacting the buyer to confirm the order details, address any queries, and arrange delivery. If
validation is unsuccessful, a Daraz customer service agent contacts the buyer to validate the
order.
Typically, the entire process, from order placement to delivery, takes about 2-5 working days,
depending on various factors. Most sellers on Daraz offer cash on delivery as a payment
option for buyers. This streamlined process ensures a convenient and efficient shopping
experience for customers using Daraz's website. Here's the listed process showing how a
customer can buy through Daraz’s website:
1.
2.
3.
4.
5.
Select the Category
Click on the desired Category
View all the product under that category
Click on the prefered product.
Register for a personal account.
Fig No.2: Products Checkout in Daraz
7
2.4.2 The Selling Process
To sell through Daraz, a seller must have an account. Once an order is placed by a buyer, the
details appear in the seller's account along with buyer information and selected product
details. The seller's responsibilities include contacting the buyer to confirm the order,
addressing any buyer queries, and delivering the product.
Daraz charges the seller a percentage commission based on the final sale amount. One
advantage for sellers is that they retain possession of their products until sold, avoiding the
burden of unsold inventory. Additionally, sellers benefit from free marketing through Daraz's
platform, which helps promote their products to a wider audience.
2.5 Business Model
Daraz involves two business models. They are B2B and B2C.
2.5.1 B2B Business Model
B2B e-commerce is defined as e-commerce between companies, dealing with relationships
among businesses. Daraz engages in buying and selling goods to business organizations.
Business organization products can be sold through daraz.com, which sells its products to
intermediate buyers, who then sell to the final consumer.
Fig No.3: B2B Model
8
2.5.2 B2C Business Model
Business-to-Consumer (B2C) e-commerce involves transactions where businesses sell goods
and services directly to consumers over the internet. This model, exemplified by Daraz,
allows consumers to order products online, with Daraz handling delivery. However, B2C
e-commerce is susceptible to security threats because consumers provide sensitive
information like credit card details and personal data on business websites.
The B2C model's reliance on online transactions raises concerns about the security and
effective use of consumer information by businesses. These security and privacy issues
contribute to the model's limited acceptance among consumers.
Fig No.4: B2C Business Model
9
2.6 Organizational Challenges
The following are the challenges for daraz:
1. Traffic and User Acquisition:
● Low website traffic: This could be due to poor SEO, lack of online marketing
presence or an unappealing website design.
● High bounce rate: Users might be leaving the site quickly due to confusing
navigation, slow loading times, or irrelevant content.
● Competition: Intense competition from established players like Jee vee, Sasto
Deal, Hamro Bazar etc. can be a major hurdle in attracting new users.
● Mobile app optimization: The mobile app, the primary access point for many
users, might have issues with performance, usability, and features compared to
competitors.
2. Product and Inventory:
● Inventory management issues: Out-of-stock products or inaccurate inventory
levels can lead to frustrated customers and lost sales.
● Uncompetitive pricing:Customers might find better deals elsewhere, leading to
Thulo.com losing market share.
● Limited product variety: Expanding into niche categories and catering to diverse
customer preferences could be an area for improvement.
● Logistics and fulfillment challenges: Ensuring timely and reliable delivery,
especially in remote areas, can be complex and costly.
3. Customer Experience
● Customer service responsiveness: Inefficient or slow customer service responses
might lead to customer dissatisfaction.
● Negative customer reviews: These can damage brand reputation and discourage
potential customers.
● Inefficient customer service: Long wait times or unhelpful responses can lead to
customer dissatisfaction.
10
2.7 Market analysis
Market analysis is necessary to know about the strengths, weakness, opportunities and
threaths. SWOT analysis is a framework for identifying and analyzing an organizations
strengths, weaknesses, opportunities and threats. Identifying core strengths, weaknesses,
opportunities, and threats leads to fact-based analysis, fresh perspectives, and new ideas.
2.7.1 Strengths
● Secure Payment Gateway: Daraz prioritizes the security of its customers' financial
information. They utilize a secure payment gateway that encrypts sensitive data,
ensuring safe and reliable transactions.
● Regular Promotions and Discounts: Daraz frequently runs promotions and offers
discounts on various products and categories. This allows customers to save even
more money on their purchases and makes online shopping even more attractive.
● Customer support: Daraz app prioritizes customer satisfaction and offers efficient
customer support through various channels. Users can reach out via phone, email, or
live chat for assistance with any queries or concerns.
● Competitive pricing: Daraz is known for its competitive pricing strategy, often
offering lower prices compared to its competitors. This attracts budget-conscious
shoppers and makes it an appealing platform for value seekers.
2.7.2 Weakness
●
●
●
No Direct Customer Interaction: No direct customer-seller interaction due to this sometimes
fraud data can be spotted on websites.
Need of Internet access: If tours and activities in remote areas where you aren’t able to get on
the Internet, online activities might not be for you. You’ll need reliable Internet access to
check your products and services that are made online.
Security and Privacy issues: E-commerce platforms always face data security and privacy
risks. Daraz needs to ensure robust security measures and transparent data management
practices to build user confidence.
11
2.7.3 Opportunities
● Increased Reach and Customer Base: Daraz app boasts a large and engaged user base
in Nepal, offering businesses a wider reach and the potential to tap into new markets
and customer segments
● Expanding beyond e-commerce: Exploring additional services like online grocery
delivery, bill payments, and travel bookings to create a more comprehensive platform.
● Digital marketing: Daraz can utilize digital marketing strategies like targeted
advertising and social media campaigns to reach a global audience and build brand
awareness.
● Growth in communication capabilities and methods: The evolving landscape of
communication presents a wealth of opportunities for Daraz to expand its reach and
impact in Nepal.
2.7.4 Threats
● Technical issues: Website crashes, app glitches, or payment processing errors can lead
to customer dissatisfaction and lost sales. Daraz needs to prioritize robust technology
and invest in cyber security measures.
● Shifting consumer preferences: Customer expectations are constantly evolving. daraz
needs to invest in technology and user experience to stay relevant and meet changing
consumer demands.
● Increasing Competition: The Nepalese e-commerce market is still evolving, attracting
new players with innovative ideas and potentially lower prices. Daraz needs to stay
agile and adapt to changing market dynamics.
● Facing negative feedback and reviews: Any negative comment, review, feedback, or
criticism about the company can go viral quickly, damaging your brand’s image. So,
customer service team has to be quick in effectively handling customer issues.
● Change in Legal and regulatory trends: In the ever-changing world that we live in,
one of the best things a company can do is keeping up with industry trends.
Companies that will not change according to their environment will disappear.
12
CHAPTER 3: Network Infrastructure and EDI
3.1 Introduction
E-commerce network infrastructure is the collection of tools, services, and facilities that
allow e-commerce businesses to operate. This includes networking equipment, hardware,
software, devices, and servers. It also includes the network of systems and processes that
manage these resources. The network infrastructure of Daraz includes:
● Web Servers: Daraz uses a network of web servers to host its website and manage
user interactions. These servers handle incoming web requests, serve product pages,
process orders, and manage user accounts.
● Database Servers: Daraz maintains database servers to store and manage vast amounts
of product data, customer information, order details, inventory status, and other
critical data required for operations.
● Content Delivery Network CDN): to ensure fast and reliable delivery of web content
and images to users across different regions, Daraz likely leverages a CDN. This
helps in optimizing website performance and reducing latency.
● Security Infrastructures: Given the sensitivity of customer data and online
transactions, Daraz invests in robust security measures. This includes firewalls,
intrusion detection systems, encryption protocols, and regular security audits to
safeguard against cyber threat.
● Payment Gateways: Daraz integrates with secure payment gateways to enable
customers to make online payments using various methods, such as credit/debit cards,
mobile wallets, and cash on delivery.
3.2 Types of Network used in Daraz
● Internet: Daraz operates primarily over the public internet, allowing customers to
access its website and services from anywhere in the world. The internet serves as the
backbone for communication between users, servers, and other systems within
Daraz's network.
● Local area Networks: Within Daraz's offices and warehouses, LANs are used to
connect computers, devices, and servers. LANs enable fast and secure communication
among employees and facilitate data transfer within localized environments.
● Wide Area Networks: Daraz utilizes WANs to connect its various offices,
warehouses, and data centers located in different geographical locations. WANs
ensure that data and resources can be shared efficiently across distributed locations.
● Payment Networks: Daraz integrates with various payment networks and gateways to
facilitate secure online transactions. These networks handle authorization, processing,
and settlement of payments between customers, banks, and merchants.
13
3.3 Software Agents
Daraz, as a leading e-commerce platform, may utilize various software agents (also known as
bots, crawlers, or automated tools) to streamline operations, enhance user experience, and
optimize business processes. Some types of software agents that could be used by Daraz
include:
1. Chatbots: Daraz may employ chatbots for customer support and engagement.
Chatbots can assist customers in navigating the website, answering common
questions, and providing personalized recommendations based on user preferences
and browsing history.
2. Recommendation Engines: Software agents can analyze user behavior and purchase
history to generate personalized product recommendations. Daraz might use
recommendation engines to suggest relevant products to customers, improving
cross-selling and upselling opportunities.
3. Fraud Detection Systems: To combat fraudulent activities such as payment fraud or
account abuse, Daraz could deploy software agents that use machine learning
algorithms to analyze transaction patterns and detect suspicious behavior in real-time.
4. Inventory Management System: Software agents can monitor inventory levels, track
product availability, and automate reorder processes. Daraz might use inventory
management agents to optimize stock levels and ensure timely fulfillment of customer
orders.
5. Price Monitoring Tools: Daraz could employ software agents to monitor competitor
pricing and market trends. These tools help adjust pricing strategies dynamically to
remain competitive in the market
6. Customer Data Analytics: software agents can analyze large volumes of customer
data to derive insights into customer preferences, shopping behavior, and trends.
Daraz could leverage these analytics tools to improve marketing strategies and
enhance customer experience
7. Logistics Optimization system: Daraz may use software agents to optimize shipping
routes, manage warehouse operations, and coordinate logistics with third-party
providers. These systems help improve delivery efficiency and reduce shipping costs
14
3.4 EDI and Daraz
Electronic Data Interchange (EDI) is a standardized method of exchanging business documents
electronically between trading partners. While specific details about Daraz's use of EDI are not
publicly disclosed, we can discuss how EDI could potentially be relevant in the context of Daraz's
e-commerce operations.
1. Suppliers Integration: Daraz may use EDI to integrate with its suppliers' systems for
seamless order processing, inventory management, and shipment notifications. EDI
enables automated communication of purchase orders, invoices, and shipment details,
reducing manual effort and improving supply chain efficiency.
2. Order Fullfillment: EDI can facilitate real-time exchange of order information
between Daraz and its suppliers or logistics partners. This streamlines the order
fulfillment process, accelerates delivery timelines, and enhances visibility into order
status for both Daraz and its customers.
3. Inventory Management: By leveraging EDI, Daraz can maintain accurate and
up-to-date inventory records by automatically syncing inventory data with suppliers'
systems. This helps prevent stockouts, optimize inventory levels, and ensure timely
replenishment of popular items.
4. Logistics and shipping: EDI can be used to transmit shipping instructions, tracking
details, and delivery confirmations between Daraz and its logistics partners. This
enhances shipment visibility, improves coordination of transportation activities, and
minimizes delays in order fulfillment.
5. Standardization: EDI promotes compliance with industry standards and regulations
governing electronic transactions. By adhering to EDI protocols, Daraz can ensure
data accuracy, security, and interoperability with diverse trading partners.
Overall, EDI can play a significant role in optimizing supply chain processes, enhancing
collaboration with suppliers and logistics providers, and ultimately improving the efficiency
and reliability of e-commerce operations at Daraz. While the specific implementation details
of EDI within Daraz's ecosystem may vary, leveraging EDI capabilities can contribute to
competitive advantage and customer satisfaction in the dynamic e-commerce landscape.
15
CHAPTER 4: Electronic Payment System in Daraz
4.1 Introduction
Daraz, a dynamic e-commerce platform in Nepal, embraces an advanced electronic payment
system that facilitates swift and secure transactions. This system supports various payment
methods, including credit cards, debit cards, and digital wallets like eSewa, simplifying the
online purchasing process for customers. Daraz’s collaboration with Nepal Electronic
Payment Systems (NEPS) further promotes the convenience of prepayments, enhancing the
shopping experience on the platform.
4.2 Types of EPS
Daraz, Nepal’s leading online marketplace, has integrated various types of Electronic
Payment Systems (EPS) to provide customers with a seamless and secure shopping
experience. Here are the primary EPS types used on Daraz:
● Bank Card Transactions: Daraz has partnered with Nepal Electronic Payment
Systems (NEPS) to encourage the use of debit and credit cards on the platform. This
partnership aims to convert customers from cash on delivery to prepayment, offering
daily bank discount vouchers for card users.
● Digital Wallets: Daraz has collaborated with eSewa, Nepal’s leading digital wallet
service provider, allowing customers to pay for their purchases through the eSewa
wallet. This method is convenient for users who prefer digital wallet transactions and
ensures a secure payment process.
● Cash on Delivery (COD): For customers who prefer to pay upon receiving their
orders, Daraz offers the option of cash on delivery. This traditional method remains
popular among users who are not accustomed to or comfortable with online payments.
● Credit Card Transactions: Customers can also opt to use their credit cards for online
payments, providing a fast and secure way to complete transactions on Daraz.
These diverse payment options cater to the varying preferences of Daraz’s customer
base, ensuring that everyone can shop with ease and confidence. Daraz would likely
prioritize features based on the needs of its customer base and regional payment
preferences. The aim is to offer a seamless and secure payment experience to
customers and sellers alike.
16
4.3 Payment Problems in Daraz
Payment problems can be frustrating for both customers and sellers on Daraz or any
e-commerce platform. Here are some common payment issues that users might encounter and
potential reasons behind them.
a) Payment Declined: This is a frequent issue where a payment is declined during
checkout. Reasons could include insufficient funds, exceeded credit limit, incorrect
card details, or security checks by the bank.
b) Transaction Errors: Sometimes transactions fail due to technical glitches either on the
Daraz platform or the payment gateway side. Network connectivity issues or server
problems can also cause transaction failures.
c) Delayed Payments: Sellers might face delays in receiving payments for completed
orders. This could be due to payment processing issues, bank delays, or verification
processes.
d) Refund Delays: Customers often complain about delays in receiving refunds for
canceled or returned orders. Refunds can take time to process depending on the
payment method and banks involved.
e) Unauthorized Transactions: Instances of unauthorized transactions or fraudulent
activities can occur, causing security concerns for both customers and the platform.
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CHAPTER 5: Network Security System
5.1 Introduction
Daraz likely implements a robust network security system to safeguard its e-commerce
platform against cyber threats and ensure the protection of sensitive user data. This system
likely includes multiple layers of security measures such as firewalls, intrusion
detection/prevention systems (IDS/IPS), data encryption, and secure socket layer (SSL)
protocols to encrypt data transmitted over the network. Additionally, Daraz likely employs
secure authentication mechanisms like multi-factor authentication (MFA) to verify user
identities and prevent unauthorized access. Continuous monitoring of network traffic and
behavior analytics helps detect anomalies and potential security breaches in real-time.
Regular security audits, vulnerability assessments, and patch management practices are likely
conducted to identify and mitigate security risks promptly. Overall, Daraz likely prioritizes a
proactive and comprehensive approach to network security to maintain the trust of its users
and protect against evolving cyber threat.
5.2 Security System in Daraz
Daraz, as a prominent e-commerce platform, would prioritize a robust security system to
safeguard its operations and protect user data. Here are key components that might be part
of Daraz's security system.
● Secure Web Infrastucture: Daraz would likely use HTTPS protocol with SSL/TLS
encryption to secure communication between users' browsers and its servers. This
ensures that sensitive information such as login credentials and payment details
are transmitted securely
● Secure Payment processing: Daraz would implement Payment Card Industry Data
Security Standard (PCI DSS) compliance for handling credit card information
securely. This involves encryption of payment data, regular security testing, and
strict access control measures.
● Data Encryption: All sensitive data stored in Daraz's databases, including
customer information and transaction records, would be encrypted to protect
against unauthorized access even if the data is compromised.
● Authentication and access Control : Multi-factor authentication (MFA) and strong
password policies would be used to ensure that only authorized personnel can
access sensitive systems and data. Role-based access control (RBAC) would limit
permissions based on job roles.
● User Privacy: Daraz would comply with relevant data protection laws such as
GDPR (General Data Protection Regulation) or local data privacy regulations to
protect user privacy and ensure responsible handling of personal data.
● Secutiry Awareness and training: Regular training programs would educate
employees about cybersecurity best practices and raise awareness about potential
threats like phishing attacks.
By integrating these security measures, Daraz aims to build trust among its users,
maintain the integrity of its platform, and mitigate potential risks associated with
operating in the e-commerce space.
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5. 3 Security Threats
Daraz, being a popular online marketplace, can face various security threats common to
e-commerce platforms. Some potential security threats that Daraz might encounter
include:
● Data Breaches: This is a significant threat where unauthorized parties gain access
to customer information like names, addresses, payment details, and contact
information. Such breaches can lead to identity theft and financial loss
● Phishing attacks: Users might receive fake emails or messages that appear to be
from Daraz, prompting them to provide personal information or login credentials.
This can lead to account compromise or financial fraud.
● Payment Fraud: Hackers might exploit vulnerabilities in Daraz's payment systems
to steal credit card details or conduct unauthorized transactions.
● Fake Sellers: Malicious actors may create fake seller accounts on Daraz to scam
customers by selling counterfeit or non-existent products. This can damage
Daraz's reputation and cause financial losses to customers.
● DDoS Attacks: Distributed Denial of Service (DDoS) attacks can disrupt Daraz's
services by overwhelming its servers with excessive traffic, making the platform
unavailable to legitimate users.
● Supply Chain Vulnerabilities: Daraz's supply chain, including third-party vendors
and logistics partners, can be targeted by attackers to gain access to sensitive data
or compromise the integrity of products.
● Account Takeover: Attackers may use stolen credentials (obtained from data
breaches or phishing attacks) to take over customer accounts on Daraz. This can
result in unauthorized purchases or misuse of personal information.
To mitigate these threats, Daraz should invest in robust cyber security measures such as
regular security audits, encryption of sensitive data, employee training on security best
practices, implementing multi-factor authentication, and continuous monitoring for
suspicious activities. Additionally, fostering awareness among users about common
security risks and how to identify them can help in preventing successful cyberattacks.
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5.4 Security Measures
To enhance security and prevent security threats on Daraz, the platform should implement
a range of robust security measures. Here are several key measures that Daraz can
implement:
Secure Website Platforms
a) Use HTTPS protocol to encrypt data transmitted between users and the Daraz
platform.
b) Implement Web Application Firewalls (WAFs) to filter and monitor incoming
traffic for potential threats.
Strong Authentication and access Control
a) Enforce strong password policies for user accounts, including requirements for
complex passwords and regular password update.
b) Implement multi-factor authentication (MFA) to add an extra layer of security
during login.
Data Encryption
a) Encrypt sensitive data both at rest (stored data) and in transit (data being
transmitted over networks).
b) Utilize strong encryption algorithms to protect payment information, user
credentials, and other confidential data.
Employee training and Awareness
a) Educate employees about security best practices, including recognizing phishing
attempts, the importance of secure password management, and handling sensitive
customer data securely.
b) Conduct regular security awareness training sessions to keep employees informed
about emerging threats and preventive measures
Fraud Detection and Monitoring
a) Implement fraud detection systems to monitor transactions and user behavior for
suspicious activities.
b) Use machine learning algorithms to analyze patterns and detect anomalies that could
indicate fraudulent activities.
Secure Payment processing
a) Partner with trusted payment gateways and implement Payment Card Industry Data
Security Standard (PCI DSS) compliance for handling credit card information
securely.
b) Use tokenization to replace sensitive payment data with non-sensitive equivalents to
reduce the risk of payment fraud.
By implementing these security measures, Daraz can strengthen its security posture and
reduce the risk of security threats, thereby enhancing trust and confidence among its users
and partners. Ongoing monitoring and continuous improvement of security practices are
essential to adapt to evolving cyber threats.
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5.5 Types of security System Used in Daraz
Daraz, like many e-commerce platforms, likely employs a range of security systems and
technologies to safeguard its operations and protect user data. While specific details about
Daraz's security systems may not be publicly disclosed for security reasons, here are
some common types of security systems that e-commerce platforms typically use, which
Daraz may utilize as well.
● Firewalls: Daraz likely uses firewalls to monitor and control incoming and
outgoing network traffic. Firewalls help prevent unauthorized access to Daraz's
systems and protect against network-based attacks.
● Secure socket Layer (SSL): Daraz uses SSL protocols to encrypt data transmitted
between users' browsers and Daraz's servers. This ensures that sensitive
information, such as login credentials and payment details, remains secure during
transmission.
● Web Application Firewalls: WAFs are designed to protect web applications, such
as Daraz's website and mobile app, from various attacks, including SQL injection,
cross-site scripting (XSS), and other common web-based threats.
● Data Encryption: Daraz likely encrypts sensitive data both at rest (stored data) and
in transit (data being transmitted over networks). Encryption ensures that even if
unauthorized parties gain access to data, they cannot read or use it without
decryption keys.
● Tokenization: For payment processing, Daraz may utilize tokenization to replace
sensitive payment information (e.g., credit card numbers) with non-sensitive
tokens. This reduces the risk of payment fraud and minimizes the exposure of
sensitive data.
● Secure Monitoring and Incident Response: Daraz continuously monitors its
systems and networks for security threats and anomalies. In case of security
incidents, Daraz likely has incident response procedures in place to investigate,
contain, and mitigate the impact of such incidents promptly.
It's important to note that effective security requires a combination of technology,
policies, and practices. Daraz would also implement security awareness training for
employees, conduct regular security assessments, and collaborate with cybersecurity
experts to stay updated on emerging threats and best practices in the industry.
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CHAPTER 6: Online Marketing and e-Environment in Daraz
6.1 Online Marketing
Online marketing in Daraz Nepal involves utilizing
various digital channels and strategies to promote
products and drive sales on the Daraz platform. Here are
key components and tactics of online marketing
specifically tailored for Daraz in Nepal.
Online marketing on Daraz in Nepal is a dynamic and
essential strategy for sellers looking to reach a large
audience and drive sales in the country's growing e-commerce market. Daraz provides a
robust platform with various tools and features tailored for online marketing success. Sellers
can leverage the Daraz Seller Center to manage product listings, optimize content, and
analyze performance metrics. Promotional tools like sponsored products and homepage
banners allow sellers to increase visibility and attract more customers.
In Nepal, social media plays a significant role in online marketing, and Daraz integrates
social media promotion with its platform. Sellers can benefit from Daraz's active presence on
platforms like Facebook and Instagram to reach a broader audience and engage with potential
customers. Additionally, email marketing campaigns and in-app notifications enable sellers to
communicate directly with customers and promote exclusive deals or new product launches.
Daraz Live, a live streaming feature, offers a unique opportunity for sellers to showcase
products in real-time and interact with customers, enhancing engagement and driving sales.
Furthermore, sellers can optimize their listings with relevant keywords and leverage customer
reviews and ratings to build credibility and trust among Nepali consumers. Data analytics
provided by Daraz empowers sellers to make informed marketing decisions based on
performance insights and customer behavior trends.
This data-driven approach allows sellers to continuously refine their marketing strategies and
maximize their impact on the Daraz platform in Nepal's competitive e-commerce landscape.
Overall, online marketing on Daraz in Nepal presents immense opportunities for sellers to
grow their businesses and connect with a diverse and tech-savvy consumer base.
Implementing a well-rounded online marketing strategy tailored to the Nepali market and
Daraz's platform capabilities can significantly boost visibility, drive traffic, and increase sales
for sellers on Daraz Nepal.
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6.2 Importance of online Marketing in Nepal
Online marketing, also known as digital marketing, plays a crucial role in the success and
growth of businesses in today's digital age. Its importance stems from several key factors.
Global Reach
Online marketing allows businesses to reach a global
audience beyond geographical boundaries. With the internet
being accessible worldwide, businesses can market their
products or services to potential customers anywhere in the
world
Target audience
Online marketing enables precise targeting of specific
demographics, interests, behaviors, and preferences. This
targeted approach ensures that marketing efforts are directed
towards individuals most likely to be interested in the
offerings, leading to higher conversion rates
Cost effectiveness
Online marketing can be more cost-effective compared to
traditional marketing channels like TV or print advertising.
Digital marketing strategies such as social media marketing,
email campaigns, and content marketing often require lower
budgets but can yield significant results in terms of lead
generation and sales.
Measurable Results
Digital marketing platforms provide analytics and reporting
tools that allow businesses to monitor metrics like website
traffic, conversion rates, click-through rates, and return on
investment.
Online marketing facilitates direct interaction and
engagement with customers through social media platforms.
This engagement helps build relationships, gather feedback,
and address customer queries promptly, thereby fostering
customer loyalty and satisfaction
Enhance Engagement
Table No.2 : Importance of Online Marketing
In summary, online marketing is essential for businesses of all sizes and industries to thrive in
a digital-driven marketplace. By leveraging digital channels effectively, businesses can
expand their reach, engage with their target audience, build brand credibility, and achieve
measurable results that contribute to long-term success.
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6.3 Online Marketing Tools used in Daraz
Daraz, being a leading e-commerce platform, utilizes various online marketing tools and
strategies to promote products, engage customers, and drive sales. Here are some common
online marketing tools and techniques that Daraz may use:
● Daraz Seller Centres: Sellers on Daraz Nepal can leverage the Daraz Seller Center, a
platform that provides tools and resources for managing product listings, inventory,
and promotions. Sellers can optimize product details, update prices, and monitor
performance metrics.
● Products listing and Optimization: Creating compelling product listings with
high-quality images, detailed descriptions, and accurate specifications is essential.
Optimizing product titles and using relevant keywords improves visibility within
Daraz's search results.
● Discounts and Deals: Offering promotions, discounts, and bundle deals can attract
more customers. Daraz often hosts special events like "Mega Deals" and "Brand
Mega Offers," which sellers can participate in to increase sales.
● Social Media Marketing: Offering promotions, discounts, and bundle deals can attract
more customers. Daraz often hosts special events like "Mega Deals" and "Brand
Mega Offers," which sellers can participate in to increase sales.
● Influencer Collaboration: Partnering with
influencers and bloggers in Nepal who
have a strong online presence can help
promote products to their followers and
drive sales on Daraz.
● Localized
Marketing:
Tailoring
marketing campaigns to Nepali holidays,
festivals (like Dashain and Tihar), and
cultural events can resonate well with
local consumers.
These are just a few examples of online marketing tools and strategies that sellers can utilize
within the Daraz ecosystem. The platform continues to innovate and introduce new features
to empower sellers and enhance the overall shopping experience for customers. Sellers
should leverage these tools strategically to maximize their visibility, engagement, and
ultimately, their sales on Daraz.
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6.4 E- Environment
The e-commerce environment within Daraz in Nepal is characterized by dynamic growth
and increasing adoption of online shopping among consumers. Daraz, as a leading
e-commerce platform in the country, has played a pivotal role in shaping this digital
landscape. One key aspect of this environment is the rapid expansion of internet
connectivity and mobile usage, which has significantly enhanced access to online
shopping opportunities. As more people gain access to smartphones and the internet,
Daraz has capitalized on this trend by providing a user-friendly mobile app and optimized
website, catering to the preferences of digitally savvy consumers.
The e-commerce environment in Nepal also reflects the entrepreneurial spirit of local
businesses and artisans, who leverage Daraz as a platform to showcase and sell their
products nationally. This has contributed to economic empowerment and growth within
the SME sector. Additionally, Daraz's support for various payment methods, including
cash on delivery and digital payments, has enhanced convenience and accessibility for
consumers, especially in a market where traditional banking services may not be widely
accessible.
Here are key aspects of the e-commerce environment specific to Daraz in Nepal:
● Rapid Growth
● Internet access
● Mobile Commerce
● Diverse Product selection
● Logistics and delivery challenges
● Payment Options
● E-commerce awareness
● Regulatory environment
Overall, the e-commerce environment within Daraz in Nepal is characterized by innovation,
competition, and a growing acceptance of online shopping as a convenient and viable retail
option. As the digital ecosystem continues to evolve and consumer preferences evolve, Daraz
remains committed to driving further growth and delivering value to both businesses and
consumers in Nepal's dynamic e-commerce landscape.
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6.5 SLEPT Analysis
Analyzing Daraz using a SLEPT (Social, Legal, Economic, Political, Technological)
framework provides insights into various external factors that impact the e-commerce
platform's operations and strategic decisions in Nepal. Let's break down each component of
the SLEPT analysis for Daraz.
1. Social Factors
Consumer behavior Changing consumer preferences and increasing acceptance of
online shopping in Nepal drive demand for e-commerce
platforms like Daraz
Demographics
The demographic profile of Nepal, including a young and
tech-savvy population, influences Daraz's target audience and
marketing strategies
Cultural Trends
Cultural attitudes and preferences shape product preferences
and marketing approaches on Daraz
2. Legal factors
Regulatory Environment
Intellectual Property
Compliance with local laws and regulations governing
e-commerce, consumer protection, taxation, and data
privacy impacts Daraz's operations
Legal considerations related to intellectual property
rights, trademarks, and copyright protection affect
Daraz's partnerships with sellers and brand
representation
3. Economic Factors
Market Growth
Nepal's growing economy and increasing
disposable income contribute to the expansion of
the e-commerce market, benefiting Daraz
Inflation and Exchange Rates Economic stability, inflation rates, and currency
fluctuations influence consumer spending behavior
and pricing strategies on Daraz
Unemployment rates
Employment levels impact consumer confidence
and purchasing power, which in turn affects
e-commerce sales
4. Political factors
Government Policies
Tax
International Trade
Political stability, trade policies, and government initiatives
to promote digital economy influence Daraz's business
environment
Changes in tax policies, tariffs, and import duties impact the
cost structure for Daraz and its sellers
Political relationships with neighboring countries can affect
cross-border trade and logistics for Daraz
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5. Technological factor
Digital Infrastructure
Advancements in internet connectivity,
mobile technology, and digital payment
systems enhance the accessibility and
usability of Daraz's platform
Technological innovations like AI, data
analytics, and automation improve
operational efficiency and customer
experience on Daraz
The need for robust cybersecurity
measures to protect customer data and
prevent fraud is critical in the
technology-driven
environment
of
e-commerce.
Innovation and Automation
Cybersecurity
By analyzing these external factors through the SLEPT framework, Daraz can
better understand the opportunities and challenges presented by its operating
environment in Nepal. This analysis informs strategic decision-making, risk
management, and adaptation to changing market dynamics, ultimately supporting
Daraz's continued growth and success in the e-commerce sector.
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CHAPTER 7: Conclusion and suggestions
7.1 Conclusion
The study examines the growing significance of e-commerce platforms in facilitating
commercial growth and effective product marketing, particularly focusing on Daraz as a
prominent online marketplace in Nepal. Daraz.com stands out for its adoption of
cutting-edge technologies and commitment to user-friendly website design, continually
expanding its product offerings to align with consumer preferences, income levels, and
accessibility. The platform caters to diverse consumer needs by offering a wide range of
products, including electronic gadgets, home appliances, fashion apparel, accessories,
books, and more.
Daraz emphasizes consumer convenience through intuitive product selection tools, price
comparison features, and efficient order placement and delivery services. Payment
options are varied, accommodating different preferences with methods like cash on
delivery and credit card payments. Operating as a marketplace without maintaining
inventory, Daraz.com connects buyers directly with sellers, hosting products from
numerous brands to provide a comprehensive shopping experience.
Overall, Daraz.com's strategic approach and technological advancements have positioned
it as a leading player in Nepal's e-commerce landscape, driving the popularity and
accessibility of online shopping in the region.
Therefore, Daraz emerges as one of the top shopping sites in Nepal due to its growing
popularity and widespread adoption by consumers across the country. Through this
project, we can assess the state of online shopping in Nepal by analyzing the position of
Daraz within this context. Despite its significant following and popularity, Daraz still
faces competition from established organizations in the e-commerce sector.
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7.2 Suggestions and recommendations
Daraz, as a leading online shopping platform in Nepal, could benefit from several strategic
recommendations to enhance its operations and customer experience. Here are specific
recommendations for Daraz.com to enhance its operations and customer experience
⮚ Expand operations beyond Kathmandu Valley: Daraz.com should broaden its
operations to encompass other regions in Nepal, reducing its focus on Kathmandu
Valley and extending its services nationwide to reach a broader customer base.
⮚ Enhance Home Delivery Coverage: Increase the coverage of home delivery
services to a wider geographical area, ensuring that customers from various
locations can access the convenience of doorstep delivery.
⮚ Improve Delivery Speed: Optimize delivery services to minimize transit times and
enhance overall speed, aligning with customer expectations for prompt and
efficient order fulfillment.
⮚ Standardization of website: Focus on standardizing the website interface based on
group-in and e-commerce standards, ensuring a cohesive and user-friendly
experience for all visitors
⮚ Addressing Cyber Security Vulnerabilities: Combat increasing cybersecurity
threats such as hacking, sniffing, and Denial of Service (DoS) attacks by
implementing robust security measures and regularly updating defenses to protect
customer data and transactions.
⮚ Expansion of Banking Transactions: Extend banking transaction capabilities to
include other banks, providing more payment options and convenience for
customers.
By implementing these recommendations, Daraz.com can strengthen its market presence,
improve operational efficiency, and enhance customer satisfaction, ultimately driving growth
and success in the competitive e-commerce landscape of Nepal. It can strengthen its market
presence and drive sustainable growth while delivering exceptional value to its customers.
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References
Saud, A.S. & Bhusal, R. (Year).E-commerce: Kriti Book and Publisher
Adhikari, S.N. (2075). Essential of E-commerce and E-Business.
Kathmandu: Buddha Publication.
https://www.daraz.com.np/
https://www.google.com/
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