Rocket Internet merges ecommerce sites Daraz and Kaymu across Asia

German startup juggernaut Rocket Internet announced today the merger of its ecommerce marketplaces Daraz and Kaymu under a new entity Daraz Group.

Both Daraz and Kaymu operate in frontier markets in Asia. Daraz, which is a managed marketplace fashioned on the likes of Lazada, is currently operational in Pakistan, Bangladesh, and Myanmar. It raised US$55 million in series A funding in September.

Kaymu is more of an open marketplace primarily targeting smaller businesses. Those businesses are free to list products on the site and source orders directly from consumers. Kaymu does not do its own deliveries or focus on authentic products alone. The startup is present in Pakistan, Bangladesh, Myanmar, Sri Lanka, Cambodia, Nepal, and the Philippines.

The new entity, Daraz Group, will unite the two companies under one roof. Operations like marketing, IT, and business intelligence for the group will be centralized in Karachi, Pakistan. Rocket Internet says the move will help “leverage synergies on the growth and cost side.”

In Pakistan and Bangladesh the two ecommerce sites will continue to be separate. In the other countries they’ll be merged under a single brand name.

The opportunity to upsell products is a key factor in Rocket Internet’s decision

“Is there overlap in their business model? Absolutely,” Bjarke Mikkelsen, co-CEO of Daraz Group tells Tech in Asia. “In the way we manage our sellers and customers it makes a lot more sense to have it under one roof.”

“We’ve been contemplating the move for six months.”

Niroshan Balasubramaniam, the former managing director of Kaymu Asia, will now look after the group in markets where there’s only Kaymu. That means he is effectively managing Sri Lanka, the Philippines, Nepal, and Cambodia.

In other markets Bjarke will co-head the group along with Jonathan Doerr.

Bjarke adds that Kaymu is the larger company in terms of customer base and orders but Daraz is significantly bigger when it comes to gross merchandise value, or the total amount of cash consumers spend. He explains that the overlap between customers who transact on both Daraz and Kaymu is less than 10 percent of their combined user base.

The opportunity to cater to both sets of consumers and upsell products is a key factor in Rocket Internet’s decision.

“The way we can target them now is much smarter,” adds Jonathan, co-CEO of Daraz Group. “There’s a huge potential to take these customers and move them up the value chain.”

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