Daraz Group to Conduct New Round of Lay-offs Amid Market Challenges – South Asia Time

Daraz Group to Conduct New Round of Lay-offs Amid Market Challenges

 February 29, 2024  

Kathmandu — Daraz Group, a prominent e-commerce company in South Asia, excluding India, owned by Alibaba Group Holding, is gearing up for another round of lay-offs citing “unprecedented challenges in the market”. This decision comes just a year after the company slashed 11 per cent of its workforce.

Acting chief executive James Dong, in an internal memo published on the company’s website, expressed reluctance over the impending lay-offs, stating, “Reluctantly, we will bid farewell to many valued members of the Daraz family.” Dong, who also heads Alibaba’s Southeast Asian e-commerce unit Lazada, took over as head of Daraz in January.

Despite efforts to explore various solutions, Dong highlighted that the company’s cost structure continues to fall short of financial targets. He emphasized the need for swift action to ensure long-term sustainability and continued growth, given the challenges faced in the market.

The exact number of employees to be affected across Daraz’s operations in Pakistan, Bangladesh, Sri Lanka, and Nepal remains undisclosed. The company did not immediately respond to requests for comment.

Despite the impending lay-offs, Daraz remains committed to maintaining its regional presence, focusing on improving consumer experience, diversifying product offerings, and enhancing operational efficiency for sellers.

The move underscores the need for optimization within Alibaba’s International Digital Commerce Group, which includes Daraz and Lazada, to boost sales and narrow losses. Despite a 24 per cent year-on-year increase in combined orders in the December quarter, the group aims to improve operational efficiency further.

Last year, Daraz announced job cuts affecting about 360 employees amid economic slowdowns attributed to various factors, including global supply chain disruptions and inflation.

Originally launched in 2012 by German company Rocket Internet as a fashion retailer in Pakistan, Daraz expanded its operations to Bangladesh, Sri Lanka, and Nepal. Alibaba acquired Daraz from Rocket Internet, further expanding its international operations.

Alibaba’s international revenue surged 44 per cent year-on-year in the December quarter, outperforming its core China e-commerce business. However, the company faces stiff competition from emerging online shopping platforms outside China.

The latest developments at Daraz highlight the evolving landscape of e-commerce in South Asia amidst global economic challenges.