Dubai: Middle East online shopping portals have as a rule tended to be all things to all manner of prospective shoppers. The thinking behind this is if one type of merchandise on offer does not find enough patrons, another might.
But the reality of this virtual retail space is that there aren't too many portals which have had enduring success with such a business model. It may be one reason why Sanjay Amarnani decided his portal, Aido.com, needed to set itself apart in terms of the products it offered.
Amarnani is fixated on just one letter — ‘e'. Yes, he is focused on the e-retailing aspect of his business, but the ‘e' also has a lot to do with the products he is selling on the site, which are mostly about entertainment.
"Movies have been my forte even prior to the launch of Aido.com, which is why DVDs feature prominently on the merchandise list as do games," Amarnani said. "There are books too, but Aido.com is built around entertainment and it will stay that way.
"Too many portals in the region lost their way since they tried to do too many things at one time. For instance, I don't see too many buyers in this part of the world opting to buy a high-end camera through a portal. It may have worked in the West, but it's unlikely to do so here.
"And I see no long-term viability from selling PCs or laptops online; it has long become a commodity business and unlikely to generate margins for a portal."
Security concerns
But Amarnani agreed with the prevailing wisdom on one issue — that the region's e-shopping business had far to go to realise the inherent potential. "In the west, the only business to put in any sort of growth in the last two years was online retailing," he added. "Every major retailer is heading that way — look at Carrefour. It's just announced it's doing so.
"E-retailing's time has come in the region as well."
This is where reassuring prospective buyers that buying online has been backed up by the required security is vital. Even now, this is the biggest concern that potential shoppers mention in relation to shopping online.
Amarnani said he understood where this was coming from, and the reason why he had gone the extra distance in creating Aido.com's security environment. The platform and its back-end infrastructure were contracted to a company in the UK "where there's extensive knowledge of security applications for e-commerce. I paid a six-figure sum for such a secure environment even though cheaper options were available in India. But it's worth it."
After going through a beta phase since June 2009, Aido.com went live last April. Buyers had started to notice and the business was gainiing traction, Amarnani said. He said the games and DVD titles ran neck-and-neck in the number of orders. And it's not just buyers from within the region who were doing so. These had come from as far as the US and Australia, particularly for the Arabic movie titles. he said.
Amarnani said knowing what matters to a regional audience was one way Aido.com could retain an edge over those portals with a greater reach.
"We are getting about 50 orders a day and that's growing, with each order being for three DVD titles on average," Amarnani said. "We have stopped offering free shipments, but are now offering even more competitive prices on the titles."
Leading names
The owner said Aido.com had inked agreements with all the leading names which hold the movie rights in this region. In terms of stocks, it maintained a "bare minimum as too much can easily turn lethal for the business," he said. Amarnani said he expected the business to turn profitable by the end of next year. Until then "I have the passion and the deep pockets to run the business to a point where it can run on its own," he said.
Broadband costs key
Aido.com has said it will consider offering a loyalty programme when the portal can call upon its own committed base of shoppers. "The monthly volumes we are getting now show it's a sustainable business model we have in place," said Sanjay Amarnani.
"At the same time we are continuing to commit investments that will make the portal the choice for entertainment-related buys."
Down the line, the offering could be expanded by having music or movie downloads. "That's the long-term plan, but matters outside of our control need to change for that to happen," said Amarnani. "Broadband speeds need to get better — here 256 kbps is considered speedy — and the cost of accessing it needs to come down simultaneously. Rates here are way too high compared with those in the West — they need to change drastically."
