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“We then started studying incentives used by retailers globally and regionally and found that they are as outdated as the online shopping experience itself.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