Dubai: Ulgbek Yuldashev founded Dubai-based e-tailer Awok.com in April 2013 with a $30,000 (Dh110,100) investment.
The firm expanded steadily for the first couple of years, but exploded into annual sales growth of 1,100 per cent in 2016, according to Yuldashev. That growth has been achieved without extra funding from banks or investors, he said, just reinvestment of profits.
Since Awok is a privately held firm that does not publicly release its figures, it’s not possible to verify that claim, but it is true that Amazon’s Alexa web rankings rate it as the 18th most visited website in the UAE and the top e-tail service. Souq.com ranks higher, but that is an electronic marketplace, not a dedicated e-tail service.
In an interview at Awok’s headquarters in Jumeirah Lake Towers, Yuldashev was reluctant to reveal Awok’s annual turnover, but did say that the company exceeded Dubai Department of Economic Development’s definition of a small or medium-sized enterprise (SME), which covers trading firms up to annual turnover of up to Dh250 million and fewer than 75 employees.
Turnover aside, from three staff members — including Yuldashev — at founding, the firm now employs 500 people. Despite this, “I still regard us as a start-up,” he said. “There are more developments we have to do.”
Nor is he content to rest on his laurels. Awok is preparing to enter the Saudi market in March, a precursor to expansion through the GCC (Gulf Cooperation Council), and is looking to expand its product line into groceries. It has already expanded from its initial offering of electronics to 50,000 products in 30 categories, including kitchenware, fashion and beauty products.
It’s also exploring the possibilities of moving to a hybrid e-commerce model, allowing third-party sellers access to its platform alongside its own products, similar to the model Amazon no uses. (Amazon, by the way, does not rank as highly as Awok in the UAE, coming in at 25th place in its Alexa rankings).
Yuldashev attributes Awok’s success to practices that will be familiar to any traditional retailer: buy in bulk, keep the costs down, pass the savings on through low prices, and keep your customer satisfied.
That’s hardly surprising, since he got his first taste of business helping his father run a traditional wholesale trading business in their native Kyrgyzstan when he was 12.
By 16 he’d started his own first business — an internet firm, since by that time he’d become obsessed with technology. Now 32, Yuldashev points out that his early start gives him 20 years’ experience in business. His father remains his primary adviser.
Although Awok is opening an IT back-office in India, its primary developers remain based in its Dubai office. This has the advantage of keeping the tech and retail sides of the firm close together, and close to its warehousing and distribution hub at Dubai Investment Park.
“When your team is located inside the business, they are not just developers,” Yuldashev said. “Our developers are very much involved in our day-to-day work. They understand the business goals.
“Maybe we can see an advantage in the market — we have one of the best platforms because our developers are not just building a website, they are building a business. They understand that when they have done something they can see the results.
“They can get instant feedback from the marketing team or purchasing team that we have here in Dubai as well. That’s a huge advantage.”
He does not see the growing developments in UAE e-commerce from home-grown firms such as Souq.com or Allabar’s Noon.com, or from international firms such as Amazon, as a threat, since he believes they will help expand the e-commerce market.
“When you see there’s only 1 to 2 per cent penetration, and the big players are coming, it’s more motivating the market rather than creating competition,” he said.
While it’s too early to know whether Awok’s growth will match its 2016 figures, Yuldashev says early signs are promising.
“We can already see in January and February that the market is still growing. The market is at a slower rate in other business but we are still having good growth — it’s maybe customers switching from offline to online
“We can see a lot of customers are opting in. We hope we can fulfil their needs and improve the retention rate by servicing them and giving them the best sales.”
It is in service and customer retention that Yuldashev believes Awok has an advantage with its wholly owned e-tailing and distribution model.
“In an e-tail business — say our business model — we control the complete customer satisfaction. We can give a comparatively better service than a marketplace, because in a marketplace the seller can fail — it’s not sure if he has stock or not, how long he will need to fulfil, and what the quality of this product will be.
“The advantage [of marketplace models] is that you’ve got many SKUs [stock-keeping units, or products] from different sellers, and the latest products coming in faster than you can acquire yourself.”
A hybrid model of core e-tailing combined with a marketplace for third-party sellers, Yuldashev believes, might be the best of both worlds. For now, Awok is thinking about it, he says.