Re­think­ing on­line re­tail

The co-founders of new e-com­merce plat­form Idealz – Jad Toubayly and Easa Al Gurg – ex­plain how the com­pany has reimag­ined the on­line re­tail ex­pe­ri­ence, and why cus­tomers and char­i­ties both have a lot to gain

Gulf Business - - CONTENTS - Neil King

Co-founders of new e- com­merce plat­form Idealz, Jad Toubayly and Easa Al Gurg, ex­plain how the com­pany has reimag­ined the on­line re­tail ex­pe­ri­ence

How does Idealz works and why did you de­sign it that way?

“On­line shop­ping glob­ally and re­gion­ally is wit­ness­ing mo­men­tous growth rates. Yet launch­ing an on­line store amidst the clut­ter of ti­tans in the mar­ket would be ex­tremely dif­fi­cult and des­tined for fail­ure. Our only way to suc­ceed would be to come up with some­thing new and in­no­va­tive that wasn’t al­ready avail­able in the mar­ket.

“We looked at the sta­tus quo in on­line shop­ping and asked a very simple ques­tion: why? Why had the shop­ping ex­pe­ri­ence not pro­gressed to cre­at­ing a more com­pelling propo­si­tion for the cus­tomer? Why had it re­mained: se­lect the items you want, put them in your cart, com­plete check­out and get the items de­liv­ered – the end?

“We then started study­ing in­cen­tives used by re­tail­ers glob­ally and re­gion­ally and found that they are as out­dated as the on­line shop­ping ex­pe­ri­ence it­self.

“Any attempt at boost­ing sales – be it via dis­counts or bun­dles, give­aways, faster de­liv­ery time, and so on – al­ways had a in­verse re­la­tion­ship with mar­gin. The greater the in­cen­tive, the greater the com­pres­sion on mar­gin. Why did that have to be the case? We be­lieved there was a bet­ter way, so we set out to en­gi­neer a for­mula that worked for ev­ery­one in the equa­tion and in do­ing so we came up with Idealz.

“Idealz is for the most part like any other on­line store, the main dif­fer­ence lies in how we add value above and beyond your typ­i­cal trans­ac­tion. The pri­mary aim of our busi­ness is to cre­ate wide­spread value, to do this we de­signed an in­cen­tive struc­ture so com­pelling that a sin­gle trans­ac­tion could not only make the user happy, but also those less for­tu­nate around the world.

“We achieved this by stack­ing our prod­ucts into cam­paigns with lim­ited quan­tity items that are at­tached to lux­ury prizes. We have five cam­paign cat­e­gories to se­lect from: cash and gold, jewellery and watches, cars, elec­tron­ics and life­style. With each prod­uct sold, the cus­tomer is awarded a com­pli­men­tary ticket to the prize draw.

“At check out, we give cus­tomers the op­tion to do­nate their pur­chased prod­ucts to char­ity, specif­i­cally Dubai Cares whom we part­ner with. If they opt to do so, we en­ter their ticket into the prize draw twice, thus po­ten­tially dou­bling their chances to win the prize.

“Once all the prod­ucts within a cam­paign are sold and all the com­pli­men­tary tick­ets have been awarded, the draw takes place and a win­ner is se­lected.”

How have you been able to se­cure such high value prizes? Col­lab­o­ra­tions and part­ner­ships must be an es­sen­tial part of the busi­ness?

“To be­gin with, all prizes are pur­chased using our own funds and ahead of any cam­paign launch. While this makes it cap­i­tal in­ten­sive for us, it avoids any mishaps with the reg­u­la­tors and gives our cus­tomers con­fi­dence that our of­fer­ings aren’t ‘too good to be true’.

“As a com­pany, we only want to de­liver the best in ev­ery as­pect of what we do. We’re a cus­tomer cen­tric or­gan­i­sa­tion and ev­ery de­ci­sion we make, we make with the cus­tomer in mind.

“All prizes, specif­i­cally with re­gard to cars, jewellery and watches, and elec­tron­ics, are sourced ex­clu­sively from the au­tho­rised dis­trib­u­tors in the UAE. On the cars ver­ti­cal, we are cur­rently ex­clu­sive with Gar­gash En­ter­prises and the Mercedes brand. On the watches ver­ti­cal, we source all the prizes from the au­tho­rised dis­trib­u­tor of Rolex and Aude­mars Piguet in the UAE. We are

work­ing on a num­ber of other part­ner­ships that should be an­nounced in the com­ing cou­ple of months.”

What has been the cus­tomer ap­petite in Idealz so far? Are you pleased with present num­bers?

“Prior to em­bark­ing on build­ing the busi­ness, we set very re­al­is­tic tar­gets that we wanted to achieve in the first five years of op­er­a­tion. While it’s still very early to make judg­ments with re­gard to cus­tomer ap­petite and plat­form per­for­mance, the ini­tial feed­back has been very pos­i­tive.

“We have only been live for four months now and while we are en­joy­ing triple digit growth rates on all fronts, these num­bers are slightly de­ceiv­ing given the start­ing base was zero. At the rate we are cur­rently go­ing how­ever, we will most likely ex­ceed our tar­gets.”

Sim­i­larly, how in­ter­ested have in­vestors been? You have at least one high pro­file backer in Dr Finian Tan of Sin­ga­pore­based Vick­ers Ven­ture Part­ners. Should we take this as a sign of things to come on the in­vest­ment front?

“There is this mis­con­cep­tion in the mar­ket that if you’re a ‘start-up’ then you are most cer­tainly out there rais­ing funds from in­vestors. For Idealz, this isn’t the case. We have not, are not and will not in the near fu­ture be do­ing fund­ing rounds.

“We de­cided very early on that we wanted to fully con­trol the fate of the busi­ness and re­main ‘ boot strapped’ for as long as fi­nan­cially pos­si­ble. We wanted to en­sure that our en­tire fo­cus was on build­ing the best plat­form for our cus­tomers and not the best busi­ness for our in­vestors. Be­sides, if we have the means to bet on our­selves, why would we take any out­side money?

“In the case of Dr Tan’s Vick­ers Ven­ture Part­ners, we did a ‘share sale’ and not a ‘cap­i­tal raise’. He is a big be­liever in our chem­istry as co-founders and our am­bi­tions for Idealz long term.

“You must also un­der­stand that Dr Tan is not your usual ven­ture cap­i­tal­ist. He and his com­pany do a lot more than just in­vest in start-ups hop­ing to make a quick mul­ti­ple. The in­sight he and his team are able to pro­vide us with now and in the fu­ture is a lot more valu­able than just money. The part­ner­ship with him made a lot of sense on a lot of lev­els.”

Where do you plan to go with Idealz? What is its po­ten­tial as a busi­ness and as a so­cial ven­ture?

“It’s very rare to see a busi­ness idea that started life as a sketch on the back of an en­ve­lope ( lit­er­ally) to be­com­ing fully op­er­a­tional, with zero changes to its core con­cept along the way. Typ­i­cally, from con­cep­tu­al­i­sa­tion to im­ple­men­ta­tion, a busi­ness will face road­blocks or mis­cal­cu­la­tions that re­quire it to con­tin­u­ously pivot or read­just.

“In the case of Idealz, what we set out to build 18 months ago was de­liv­ered ex­actly as we en­vis­aged it 18 months ago. If our past is any­thing to go by, we hope that in the com­ing 18 months, we will be able to achieve ev­ery­thing we have set out for our­selves to­day.

“Our vi­sion for Idealz is, for the most part, a closely guarded secret I’m afraid. What I can say is that you can ex­pect to see us in a lot more ge­ogra­phies very soon with a lot of in­ter­est­ing add-ons.

“Our po­ten­tial as a so­cial ven­ture is lim­it­less. We have only just started ex­per­i­ment­ing and learn­ing how to max­imise so­cial im­pact and we are work­ing on a num­ber of ini­tia­tives with Dubai Cares that, if ex­e­cuted cor­rectly, should be a lot more re­ward­ing than any fig­ure on an in­come state­ment.”

What have been the chal­lenges in get­ting the busi­ness to this point? How have you been able to over­come them?

Our big­gest chal­lenge was known to us from the start. Not only were we go­ing to have to teach cus­tomers a new shop­ping ex­pe­ri­ence, we were also go­ing to have to win their trust in the process. That’s never an easy thing to do, in fact by its very na­ture it will al­ways be on­go­ing.

Hav­ing said that, we were pre­pared for a bumpy start. We knew that in­no­va­tion of any sort was go­ing to cre­ate a learn­ing curve for our cus­tomers and when you con­sider how en­trenched the stan­dard e-com­merce tem­plate is, you’ll get some idea of how big our task is.

What made mat­ters worse of course, was that we couldn’t look to a proxy to see how they did it, be­cause of course, no one else has done this.

When UAE reg­u­la­tions started to shift and Dubai Econ­omy (DE) im­posed new leg­is­la­tion on com­pa­nies like ours, it was the best thing that could have hap­pened. Here we were pre­sented with a very clear seal of ap­proval from the government which we knew would pro­vide in­stant cred­i­bil­ity for our plat­form. Not only does ev­ery cam­paign fea­ture a per­sonal per­mis­sion num­ber, but an of­fi­cial from the DE over­sees all draws be­ing con­ducted.

The set up was ideal and was bol­stered ad­di­tion­ally by the rep­u­ta­tions of our part­ners, Dubai Cares, Gar­gash En­ter­prises and even Vick­ers Ven­ture Part­ners.

While get­ting to this point has been dif­fi­cult, we feel very happy and con­fi­dent with where we are now, where we are head­ing and most no­tably, how we are per­ceived in the mar­ket.

Co-founders of Idealz, Jad Toubayly and Easa Al Gurg

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