As per bloomberg sources, Yayvo is looking for Investors primarily from China and Middle East. Head of Yavo, confirms the news and mentioned that Company is in need of money to grow faster and in this regard Strategic Investors are being tapped who can help with the company’s future plans.
Yavo is the second largest Online Retailer in Pakistan. As per inside sources, Yayvo is valued at $100 million. The company declined to confirm the valuation as it remains confidential. If valuation figures are accurate, Yayvo is valued at One-Fifth the valuation of Daraz. As per sources, the Ali Baba – Daraz deal got finalized between $450-500 million for 100% stake
There are speculations that Yayvo may raise $15 million on the minimum. This much amount is expected to give a much needed breather to the company. Yayvo expects to heavily invest in Marketing in order to attract new customers. Currently, Yayvo.com has limited visitors to its site as compared to Daraz.pk. It attracted only 200,000 customers in January as compared to Daraz.pk traffic of ~ 10 million.
Saad Farooq, who owns an online store and has previously worked for Yayvo, commented; ” Yayvo is currently in “Bleed and Burn” mode, where the company is unable to get desired traction to churn out Profit. Cashflows are still negative and the company is spending more than what it earns”. He added that Strategic Investor is needed who can give the right direction to the company as it has all the potential to be successful. No financial Figures of Yayvo are Public and the company declined to confirm its financial position.
Current State of eCommerce in Pakistan
It will not be wrong to say that eCommerce segment in Pakistan is still in its initial stages. “Internet penetration, Growing Incomes, coupled with advancement in communication technology and branchless banking, has been propelling the sector forward” reads the State Bank of Pakistan report on eCommerce. However a large market still remain untapped.
Ali Mushtaq, an analyst working for eCommerce consulting firm in Karachi has a promising view on the sector. ” A large segment of population is under 35 years of age. As they are expected to come in the labor market within next decade, their Income and Propensity to consume is expected to rise. The generation is tech-savvy and prefer to consume on life style rather than to save. Thus a huge potential exist for eCommerce Industry to capitalize on this upcoming bulge”.
How new Investment will fare ?
In the past, major portion of Most foreign direct investment has been directed towards Telecom sector. However, this is changing. Taking que from neighboring countries, eCommerce is expected to be the next big emerging sector.
Foreign investors had been hesitant to enter and invest in Pakistan. Now that a giant like Alibaba has entered Pakistan and Saudi’s are being lured to invest here, there will be followers. So far many big companies have been hesitant to enter Pakistan owing to legal and law & order issues. Keeping that in scenario, any new investor in Yavo will be a good omen for the ecommerce sector specificaly and country in general