New portal bets on speedy delivery for competitive edge

Dubai: Fancy branding and glitzy advertising campaigns can only get an e-commerce portal so far. It is the ease and speed of delivery of the goods that matters, as many a daily deal website and some other portals in the region are finding to their dismay.

It is a pitfall that recently launched Namshi — which deals in fashion accessories and shoes — wants to steer well away from. And it is adopting enough safeguards to ensure it does so.

To sweeten the transaction, it is offering free shipping and that matters a lot when the portal is trying to find traction with a GCC-wide clientele, as well as in Egypt.

But just as important, the same applies if the goods are returned.

"In offering free shipping and returns, we are essentially eliminating the risk from the online shopping experience," said Louis Lebbos, Namshi co-founder.

"If customers are unhappy with the sizing or any other aspect of the product, they have the option to return — or exchange — the item at absolutely no cost."

The portal is also taking direct control over another aspect of the logistics.

"We've implemented a system in which all products offered on the site are readily available in our own warehouses, giving us speedy access to inventory," said Lebbos, who set up the business along with Hosam Arab and Mohammad Mekki.

"So, we're not relying on third parties to fulfil our promise to customers."

This would, according to Lebbos, translate into a favourable impact on delivery deadlines. With the mushrooming of e-commerce portals in the region, most of them selling the same products or services, speed of delivery can provide the tipping point for success or failure.

For the actual logistics, the company has struck an agreement with Aramex. As things stand now, its UAE clientele are offered delivery schedules of up to three days on most products and within five working days for the other GCC markets and Egypt.

"Moving forward, we foresee establishing points of presence in local markets to manage the higher volumes of shipments and customer interactions," Lebbos said.

"Local operations aren't as critical for timely delivery as a strong logistics and supply chain."

He, however, declined to go into detail about the start-up costs. But he did say that Namshi was able to bring on board an investor who had an extensive track record of investing in online fashion retailing.

Steady growth

"This has allowed us to maintain a steady growth trajectory," he added. "The website is currently receiving tens of thousands of visitors a day and growing."

In the four months since the portal launched, the promoters have been focusing on scale.

That explains why they were intent on extending the reach into the entire GCC and Egypt in the initial phase.

Saudi Arabia, for instance, is a "critical component as it has been ahead of other GCC nations in consumer e-commerce with a significant amount of online spending in recent years," Lebbos added.

Last year, a Visa report estimated the GCC's online consumer spending to be $5 billion (Dh18.3 billion) in 2011.

By now, the portal has added to its initial merchandise mix of shoes and fashion accessories to include casual wear, cosmetics and perfumes. The price range on these extends from mid-tier to slightly upscale.

According to market insiders, there are merits for an e-commerce portal to try to widen its product offerings.

"Once it has attained a certain degree of committed users or buyers, then it becomes far easier to try out new things," said one.

"It gives the impression that the portal is never static and that's always bound to be a good thing."

Namshi's founders are now testing the truism of this sentiment.

Strong logistics

• A highly-integrated supply chain and strong logistics operation needs to underpin the customer experience.
• Online shoppers will always need simple and easy access.
• By offering free shipping and returns, the risk is eliminated from the online shopping experience.

— M.N.