Overview

Daraz Nepal is the country’s largest e-commerce marketplace. Since launching (and later joining the Alibaba Group), it has accelerated digital commerce adoption, reshaped competitive dynamics, and catalyzed a supporting ecosystem of payments, logistics, and SMEs.

This case connects directly to Unit 2.4: Strategy, Structure, and Process—showing how these dimensions shift in a real Nepali context.

Strategy: Platform and Network Effects

  • Platform-first strategy: Daraz does not primarily own inventory; it orchestrates a marketplace connecting thousands of sellers to millions of buyers.
  • Network effects: More buyers attract more sellers and vice versa, reinforcing platform value.
  • Data-driven growth: Search, recommendations, pricing, and promotions optimized via performance data and seasonality (e.g., 11.11 campaigns).
  • Trust-building: Buyer protection, ratings/reviews, easy returns, and official stores increased confidence.

Result: Intensified competition and price transparency across categories; traditional retailers faced pressure to adopt omnichannel models.

Structure: Cross-functional and Partner-First

  • Cross-functional category teams manage assortment, pricing, merchandising, and campaigns.
  • In-house tech capability + global support from Alibaba; rapid deployment of platform features.
  • Partner ecosystem:
    • Logistics: Third-party couriers and last-mile partners; centralized warehouses.
    • Payments: Integration with eSewa, Khalti, IME Pay, cards, and COD.
    • Sellers: Seller Center tools for catalog, order, and performance.

Outcome: Flatter, agile decision cycles vs. traditional hierarchies; emphasis on partnerships over full vertical ownership.

Process: Digitized, Automated, Trackable

  • Order-to-fulfillment: Automated order routing, WMS-driven picking/packing, shipping label automation, real-time tracking.
  • Customer service: Help center, live chat/tickets, proactive notifications; standardized SLAs.
  • Marketing: Always-on campaigns, A/B tests, event-led surges (11.11, 12.12), influencer and social integrations.
  • Payments and reconciliation: Multi-method, instant verification, fraud controls, COD management.

Benefit: Faster cycle times, better visibility, lower per-order handling cost at scale.

Nepal-Specific Challenges and Responses

  • Last-mile complexity: Terrain and addressing—mitigated via local partners and zone-based routing.
  • Trust and COD dominance: Buyer protection and easy returns to reduce perceived risk.
  • Counterfeit risk: Official Store program, platform policies, and seller audits.
  • SME enablement: Training, onboarding support, financing partners during campaigns.

Outcomes and Lessons

  • Behavior shift: Consumers increasingly discover, compare, and buy online; omnichannel emerges for traditional retailers.
  • Capability shift: Logistics, data, and CX become differentiators, not just assortment and location.
  • Policy implications: Need for clearer e-commerce regulatory posture and reliable digital infrastructure.

Key takeaways:

  • Platforms can scale faster than single-retailer models via indirect network effects.
  • Logistics & trust mechanics are strategic in Nepal.
  • Continuous experimentation (pricing, UX, promotions) compounds advantage.