Lessons from Daraz's South Asian Scale
A recent talk with Arusha Imtiaz, who helped scale Daraz into South Asia's leading marketplace, offers a playbook for regional dominance. Key tactics included deploying city-based 'champions' for hyperlocal vendor onboarding and combining tech with trust-building measures like transparent payouts to overcome seller skepticism.
Beyond hyperlocal champions, Daraz's playbook for overcoming seller skepticism in South Asia involved building a physical footprint. The company established thousands of affiliated offline stores for order placement and a network of 46 physical hubs in 19 Pakistani cities alone for commercial and operational support. This hybrid model was supported by a proprietary logistics system, Daraz Express (DEX), which reduced reliance on third parties and cut shipping costs. By combining its own logistics with strategic partnerships, Daraz built a network capable of reaching more remote customers, a key differentiator from competitors focused only on metropolitan areas. In India, the target market for expansion is clear: Tier 2 and Tier 3 cities drove 65% of orders during recent festive seasons, with Tier 3 alone accounting for 46%. This growth signals a fundamental consumer shift from cautious, cash-on-delivery users to confident digital-first shoppers, with nearly 70% in Tier 2 cities now buying high-consideration items like smartphones online. The primary channel for reaching these customers is conversational. Social commerce in India is projected to become a $143.86 billion market by 2030, with WhatsApp emerging as the highest-converting channel—its conversion rate is 2-4 times higher than Instagram or Facebook, especially in non-metro areas where trust is paramount. However, the rise of quick commerce creates new expectations, with India's hyperlocal delivery market growing at over 50% annually. Competitors like Zepto and Blinkit are setting 10-minute delivery standards by building micro-fulfillment hubs in dense urban areas, reshaping the economics of last-mile logistics. For small vendors, government initiatives like the Open Network for Digital Commerce (ONDC) are leveling the playing field. By late 2025, ONDC had already onboarded over 116,000 sellers from more than 630 cities, giving local artisans and D2C brands platform-agnostic reach and visibility without relying on a single large marketplace. This new ecosystem allows sellers to retain control over their pricing and data while accessing a national customer base. ONDC also integrates with the Government e-Marketplace (GeM), opening up opportunities for small businesses to secure government contracts and participate directly in public procurement.
