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Alibaba-owned Daraz CEO gives tips on building a successful business

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After six years at Goldman Sachs as an investment banker, Bjarke Mikkelsen faced a dilemma.

“I had a very comfortable life, but I didn’t really feel like I had a purpose,” he told CNBC Make It.

“In the banking industry, you are always ultimately an advisor. I wanted to try and run a business…I wanted to do something with technology, but I like building things, so I am very It also had an operational side to it.”

those desires It took him, then 34, to Pakistan, where he built an e-commerce marketplace called Daraz.

“The idea was always to build something inspired by Amazon and Alibaba, where there are three elements: an e-commerce marketplace, logistics and payment infrastructure.”

One of the things I love most about ecommerce is that it’s fair and a great equalizer.

Bjarke Mikkelsen

Founder and CEO of Daraz

In 2018, three years after the business began, Daraz was acquired by Alibaba in a private transaction. This is part of the Chinese e-commerce giant’s efforts to expand in South Asia.

Daraz currently operates in Pakistan, Bangladesh, Sri Lanka, Nepal and Myanmar, serving 40 million active customers.

“One of the things I love most about e-commerce is that it’s fair and a great equalizer,” Mikkelsen said.

“It doesn’t matter if you are a man or a woman, whether you live in a big city or in a rural area…everyone has the opportunity to start a business as a seller. It’s a service.”

Not everyone “has the same access to offline retail infrastructure,” Mikkelsen said.

“The Equalizing Factor is what really inspired me and I wanted to do something about this.”

How did the 41-year-old transform his startup into one of South Asia’s e-commerce players? Mikkelsen shares his top tips on CNBC Make It.

1. Do your due diligence

Mikkelsen left investment banking in 2015. It was a time when “tech startups were very hyped.”

“It was so easy to raise money to start something.”

But he said it was nevertheless important to assess the opportunity and do due diligence to find target consumers.

“We really spent a lot of time studying the market and understanding where the potential is,” Mikkelsen said.

Covid boosts South Asian e-commerce acceptance: CEO of Daraz

“I started looking to South Asia, and I realized that it was a big part of the world and there was no e-commerce at the time. There are 500 million people. It’s a huge opportunity that is often overlooked.”

Mikkelsen also moved to Pakistan, where he lived for three years and spent a lot of time traveling to rural areas to understand the people, culture and needs.

“If Amazon were to come and try to build an e-commerce business that looked like what we’re seeing in Denmark, it wouldn’t work,” he added.

“You have to add value so that you can ultimately build a profitable business.”

2. 100% maintenance

For Mikkelsen, being able to do business “in the 90% to 100% range” is where the magic happens.

“You underestimate how much effort it takes to launch a great product and build a great service. 90% is actually nothing. It never flies, but it gets to 100%.” There is a need to.”

That’s something I learned the hard way in the early days at Daraz, when I had no experience building e-commerce websites.

What I really practice a lot is slowing things down and pausing and knowing that everything is as good as it can be [even] When everyone else thought we were done.

Bjarke Mikkelsen

Founder and CEO of Daraz

“I didn’t know what I was doing…it was very difficult to do some things 100% right.”

According to Mikkelsen, slowing down is the key to achieving excellence.

“E-commerce is very fast-paced and people are under constant pressure to reach the next project, next target or next campaign,” he added.

“But what I really practice a lot is slowing things down, pausing and knowing that everything is as good as it can be. [even] When everyone else thought we were done. ”

3. Work never ends

While Daraz is on the “road to profitability” with positive gross margins, Mikkelsen said the job isn’t done yet.

“I used to think that at some point, once we reach a billion-dollar business, the process and everything would stabilize. he said.

“Our business model never ends. We need to keep changing, optimizing for market externalities and new trends.”

Mikkelsen’s next focus? Allow Daraz to scale efficiently.

“This year … we are slowing down a bit to focus on getting the right customers and building their respective customer value propositions. [business] categories,” said Bjarke Mikkelsen, CEO and founder of Daraz.

Dallas

“This year we will probably hit about $1 billion in total product volume … we are slowing down a bit to focus on getting the right customers and building their respective customer value propositions. [business] category. ”

But for now, Mikkelsen is happy with the sense of purpose he’s found, and that sense of purpose “nothing is missing.”

“We have over 40 million monthly active customers on our app and over 100,000 sellers on our platform, who are really creating opportunities and making lives better,” he said. added.

4. Sink or Swim

Mikkelsen’s final piece of advice for entrepreneurs is to approach travel with a “sink or swim” mentality.

“I would encourage people to not be afraid to fail and just try. Sometimes they fail, and that’s okay,” he said.

“Often you learn how to swim along the way, and the development process is much faster that way.”

Making the switch from banking to tech entrepreneurship was “very, very scary,” but Mikkelsen has no regrets.

“It was the best thing I did for myself.”

Do not miss it: Two of his startups have failed. Now this 30-year-old man has his $32 million for his company.

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