How Rocket Internet is Getting Into Pakistan On the Ground Floor

Germany’s Samwer brothers, the duo behind the startup dynamo that is Rocket Internet, love unformed markets where they can get in early and perhaps lead from the front. Pakistan definitely fits that bill. Rocket Internet now has five of its startups operating in Pakistan after very quiet roll-outs of EasyTaxi Pakistan and Zamudi at the beginning of this month.

The five ventures in Pakistan are clothing e-store Daraz.pk, the Amazon/eBay marketplace style Azmalo.pk, property portal Zamudi.pk, and also localised service versions of EasyTaxi and Foodpanda. To find out how these are being run and how they might expand in Pakistan, we spoke with Ahmed Khan, who founded Azmalo and is the CEO of that site as well as Zamudi and Easytaxi Pakistan.

Ahmed was drafted by Rocket based on his background at McKinsey and P&G since the Samwer crew believe, he explains, that consultants “make passionate entrepreneurs”; thereafter his role was expanded to cover Zamudi and the local Easytaxi as well. He reckons “Pakistan is on the cusp” of really embracing digital and is happy that they’re in early. He adds:

As they say, it is always good to get in the ground floor. […] As business rises it becomes more expensive to enter a market – economics 101. If you have first-mover advantage not only can you dictate terms for pricing but also the direction of the market. The question should be why have more people not come yet?

E-stores vs online services

Rocket’s five startups in the country cover a mix of e-shopping and online services. “To gain trust and initial traction, the services play a very good part,” says Ahmed of Foodpanda’s food deliveries and Zamudi’s property listings. Though they’ll inevitably serve a “niche market,” they’re a good complement to the broader shopping potential of the e-commerce sites:

It is easier for people to trust services rather than an outright purchase and that’s where the difference lies. Given the lack of trust that was apparent in the initial stages with online business, providing a service such as delivering food or ordering a taxi is undertaken more often than say purchasing clothes. The regular interaction with our services then will speed up the rate of adoption to e-businesses.

Pakistan’s tech infrastructure is growing fairly slowly, with 125 million mobile subscribers at the last count. More importantly for Rocket Internet’s ventures, 15 million of those phone owners are on the mobile web.

EasyTaxi aiming at 100 Lahore cabbies soon

Of course, Ahmed and his team have done their homework on these numbers, and they estimate that there are five to six million smartphones in Pakistan with around a million in Lahore alone. Lahore is the focus for Easytaxi’s launch in the country, but Easytaxi relies on apps for Android and iPhone, so it’s important to know the size of that prospective user-base.

Ahmed sees a huge rise in smartphone usage in the country soon as Android devices get even cheaper and the EasyTaxi Pakistan team is confident of attracting repeat customers in that city:

Tempting Pakistani shoppers online

Healthy rivalry