“We will never charge our sellers commission on their sales.”
Monis Rahman is an internet entrepreneur, venture capitalist, and businessman. He is the co-founder, Chairman, and CEO of Naseeb Networks Inc, a social platform used primarily for online job recruiting that he launched back in 2003. He founded Rozee.pk, which is Pakistan’s largest employment platform that also became the first local startup to raise venture funding in 2008. In 2015, he co-founded Finja - a fintech startup that created Pakistan’s first smartphone mobile wallet called SimSIm and quickly pivoted into digital lending.
In his conversation with BR Research, he talks about his most recent venture, Dukan.pk launched in early 2021, which is an e-commerce startup that lets anyone with a smartphone build a web store. Following are the edited excerpts:
BR Research: You have a couple of startups in your hat as a founder. Tell us about your latest venture Dukan.pk - the idea behind it; the need for the app; and key users of the app.
Monis Rahman: We are living in pivotal times. 50 Million new people have come online for the first time during the last five years on their smartphones. Things that were not possible five years ago are possible today. Correspondingly, online commerce has grown with this new segment of recently connected solopreneurs struggling to understand how this all works. Dukan has built the full-stack operating system for e-commerce for Pakistan's 5 Million micro, small and medium enterprises (MSMEs) to transact with their customers and each other. Dukan helps them create web stores, settle electronic payments, schedule deliveries, manage khata and stock, increase orders and get loans to buy from their suppliers.
BRR: When did you launch Dukan.pk, and how many web-stores have you created so far?
MR: We officially commenced operations 8 months ago and have crossed 200,000 web stores. This number has doubled in the last two months. The interest is overwhelming. However, what ultimately matters is how many of them are able to grow their businesses on our platform. There has been a tremendous amount of experimentation and innovation happening inside Dukan to help our new shopkeepers cross into the technical world of online commerce in a way that they will understand. So, our success does not come from the headline number of web stores, but the number that are meaningfully benefiting from our services. This is our sole focus as a company.
BRR: What kind of audience/sellers of goods and services do you host or intend to attract? Have you seen any women-led business onboarding?
MR: Many of our early adopters were groups of inspiring women sellers. Groups like Kaarvan Crafts Foundation gave us valuable feedback that was used to further improve our app. Our mix of sellers is highly diversified ranging from fashion, retail and grocery, electronics, health, beauty, and hundreds of other categories. Our clients are the next wave of e-commerce sellers -- Pakistan's offline MSMEs, which account for 40 percent of the country's GDP.
BRR: Getting a web store on Dukaan.pk is free. Could you explain your business model and how you intend to make money?
MR: There is an opportunity to make a tremendous impact and uplift 80 percent of Pakistan's non-agricultural working population which either runs or is employed by an MSME. It's clear that when MSMEs are digitized, it will create tremendous economic value. While we have many options in terms of revenue streams, we are very clear that we will never charge our sellers commission on their sales. Because it contradicts our mission to uplift the existing ecosystem, not replace or diminish it. We will have many opportunities to sell value-added services to our sellers which help them increase their sales.
BRR: Do you intend to raise venture funding in the future?
MR: We've raised a bit and will be closing another raise shortly.
BRR: What is the scope of small and medium businesses in e-commerce? DO you think that e-commerce can actually transform and take over the retail sector in Pakistan?
MR: E-commerce will not replace the millions of physical retail stores in the country. As a fragmented economy, the distribution setup offered by retail stores is a powerful asset. Our mission is to support them and help them grow multifold beyond the physical limits of their shops. If MSMEs are responsibly given credit, technology, and market access, they will significantly raise the GDP of the country. This is what Dukan does.
BRR: The startup ecosystem in Pakistan is evolving and growing with better ideas, a focus on technology, and a surge in funding. Do you think that's enough for startups to scale, become profitable, and sustainable? What else is necessary?
MR: Recently there has been an unprecedented amount of interest and deployment of capital by foreign and local venture capital groups. The Pakistan story has been compelling for a long time, but things have accelerated post-COVID with the rapid increase in online connected mobile users. The story is now being told in the right way to the right people who aren't misled by Fox News-type narratives of Pakistan. People like Aatif Awan have done a tremendous job evangelizing the under-valued and largely untapped opportunity in Pakistan to the global investor community. This sudden heat up of the startup ecosystems is not new, it has happened many times before -- next door in India, Indonesia, Vietnam, Philippines, and now Bangladesh.
I was running a startup in Silicon Valley when it first happened there. So, in many ways, we have seen what happens before and while history may not entirely repeat itself, there will be some common themes. Many startups will fail, but some will succeed in game-changing ways. Entrepreneurs who failed in their first startups will rise again and succeed in their second or third. We will mature as a startup community and interconnect our platforms, leveraging digitization across sectors to scale even faster. We will discover that the business models we thought we had are not viable and will pivot to create something entirely new of even more value. Many parts of the thesis for investing in Pakistan are being tested simultaneously. As these validate, Pakistan will attract currently unthinkable amounts of venture investment into the country. If these early experiments fail, it will disrupt the current level of capital flows into startups as well.
BRR: As the CEO and founder of Naseeb Networks, what can you tell us about the performance of the local job marketplace startup Rozee.pk especially with rising unemployment, a massive increase in job seekers, and a shrinking job market.
MR: Rozee was the first venture-funded startup in Pakistan at a time when jobs were all advertised offline in newspapers. Moving jobs online was a difficult but tremendously fulfilling accomplishment in those days. To a large degree, Rozee takes the pulse of the economy by measuring the number of jobs advertised across sectors. We have seen a rapid rise in our business post-COVID. Pakistan's migration to the new digital economy and associated budgets are creating many new jobs and demands for cutting-edge skills. So by all the data we have, we appear to be going through a boom of sorts. Salaries have increased. There is a dire need to retool our workforce, especially those in obsolete or dead-end careers. Rozee is working on doing this at scale to serve our customers and improve the livelihoods of millions of talented people.
Although Rozee data largely reflects the educated workforce of the country, our recently launched Rozgar.pk platform serves less-educated workers, most of whom are now connected through their smartphones. We believe that the mobile Internet will quickly enable them to find higher-paying jobs across geographic boundaries and fill positions that remain unnecessarily vacant.