This e-commerce startup is focused on Asia’s small, often-ignored markets
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Beach in Karachi, Pakistan. Photo Credit: Faisal Saeed / Flickr

Kaymu, an online marketplace for individuals or small shop owners to sell or auction goods, operates in what Rocket Internet calls “frontier markets”

Tech in Asia

Where other e-commerce platforms fear to tread, there is Kaymu. This Rocket Internet venture is an online marketplace for individuals or small shop owners to sell or auction used and new goods, kind of like a mix between Taobao and eBay. It operates in what Rocket classifies as “frontier markets” – regions of the world that lag behind in economic and human development. It’s present in a number of African countries, as well as European countries like Albania and Belarus.

Pakistan is Kaymu’s strongest presence in Asia. The marketplace launched there two and a half years ago – first under the name Azmalo, before it rebranded to Kaymu. Since then, versions of the site have been built in Bangladesh, Cambodia, Myanmar, Nepal, Sri Lanka, and the Philippines.

Get there before Carrefour

Kaymu looks at countries in which the retail landscape is fragmented, and where there aren’t many malls and mega-retailers like Carrefour around. This leaves the emerging middle class underserved and hungry for consumption.

“In Pakistan and Bangladesh alone we are talking about 300 million people, with GDP growth of up to eight percent per annum,” says Kaymu co-founder and managing director Niroshan Balasubramaniam. “They have to go to different areas of the city to buy T-shirts, shoes, furniture, and the traffic can be bad.”

He believes that, based on the quick adoption of the mobile internet, countries like these can establish online shopping as the norm even before investors decide to build brick-and-mortar shopping centers.

“Internet penetration is growing at a crazy level,” Niroshan says. “In Myanmar, five years ago, there was no internet, now five to eight percent are online. In Cambodia, five years ago, there was a mere one or two percent. Today it’s near 25 percent.”

Monetizing in Pakistan, Bangladesh, and Sri Lanka

In Pakistan, the Kaymu marketplace houses some 20,000 sellers, with about half a million listings. Bestselling items, according to Niroshan, are fashion, footwear, and jewelry. “It’s not your Rolex obviously, but buyers appreciate having a huge assortment in one spot,” Niroshan says.

Kaymu’s sellers are mostly shop owners and housewives. A third type of seller does it on the side, as additional income next to their other job.

Like Taobao in its early days, Kaymu first introduced its service without taking a fee from buyers and sellers. In Pakistan, Bangladesh, and Sri Lanka it recently introduced fees, but it hasn’t yet in the other markets.

“When do you start monetizing? That’s the big question,” Niroshan says. “If you start too early, chances are you will not be relevant. Enough of our sellers have to feel they are making enough money on our platform. […] You also need to be relevant for buyers. They should come to the platform and find everything they need.”

In Pakistan, Bangladesh, and Sri Lanka Niroshan felt the level of maturity had been reached. According to him, Kaymu lost only a few sellers when it started charging commissions.


Spice shop in Sri Lanka. Photo Credit: McKay Savage / Flickr

“You have to communicate with them: We invested for you, we built this for you, now it’s time to recover our investments,” he explains.

How far that investment recovery has come, Niroshan won’t say. Rocket Internet ventures tend to keep revenue-related figures to themselves.

Niroshan gives the impression that building Kaymu and creating opportunities for up-and-coming entrepreneurs to take their business online is a personal mission for him. He sees it as a way to contribute to overall prosperity and a stronger middle class in the fragile markets Kaymu targets.

“We try to build these countries,” he says. “Thousands of sellers are making money on Kaymu. Most of the countries we’re in don’t know about e-commerce. We help sellers choose the right price points, and we give recommendations about the appetite of buyers.”

Commitment to education

In Cambodia, where Kaymu launched in April, the startup is headed by a young Frenchman, Valentin Vermersch. He fits the Rocket Internet hiring profile: business school, then work experience at a major consulting firm.

But he, too, stresses how important the social and cultural aspects of his work are for him.

“At Kaymu, we don’t only have a business side. We do trainings, we empower entrepreneurs and small and medium-sized enterprises. They sell up to three times more on Kaymu than they did before,” Valentin says.

“The human experience may not an official company mission […] but we’re human, and it’s a deep cultural experience for us. This is, personally, what I am in for.”

From just two people at the start, Valentin has grown the local team to 36 people, the vast majority of them Cambodian. The number of listings on Kaymu Cambodia has grown to 12,000 in just a number of months.

Will Kaymu go the way of Lamido?

Despite growth and touching human stories, it won’t all be smooth sailing for Kaymu. The open marketplace model – anyone can sign up and sell – has its shortcomings. For one, Kaymu has had to deal with the issue of fraudulent sellers and pirated items.

Pakistani tech blog Techjuice went into more detail on this and Valentin admits the problem exists in Cambodia, too.

“Fakes and counterfeits exist, after all, we are a marketplace, and we can’t check each of the 12,000 listed items,” he says. “But there’s a report button. We get in contact with the seller, and we delist it.”

Can Kaymu keep pace with the rapid developments in e-commerce? By choosing to establish itself in frontier markets where competition is thin, it may get a head start, but doing the legwork of buyer and seller education and chasing counterfeits could prove detrimental to fast growth. Homegrown companies with competitive concepts might rise and eventually overtake Kaymu.

Rocket ventures in India seem to experiencing this pushback. According to the Economic Times of India, Rocket Internet is planning to sell some if its Indian companies, including fashion e-store Jabong, food delivery site Foodpanda, and others, because the competitive pressure from established local players and nimble, young startups has become too strong.

Niroshan says he thinks this won’t happen in his frontier markets.

“In the countries where we operate, it’s not as easy as in India. I’m not saying it’s easy in India, but in our countries it’s even harder. In India, a lot of people returned from the U.S. and launch their own ventures. The diaspora is there. In our countries that’s not the case,” he explains.

Interestingly, Kaymu may face some competition from another Rocket venture, Daraz. The Amazon-like e-commerce store is also targeting frontier countries. Daraz has actually been in Pakistan longer than Kaymu, also operates in Bangladesh, and late last year launched a version in Myanmar under the name It operates as a “managed marketplace” – meaning it has some control over which sellers sign up, and has a centralized warehouse that sellers ship to, while Daraz then sends the package to buyers.

According to Valentin, Kaymu in Cambodia does the same. The site gives the seller the option to arrange the delivery themselves, or to drop off the product at Kaymu, which then completes the delivery.

Daraz just recently announced a $55 million funding round, while Kaymu seems to still operate on seed money from its parent, the Asia Pacific Internet Group, which is backed by Rocket Internet itself and the Qatari telco Ooredoo.

Is Kaymu being cannibalized by a sister company? Niroshan and Valentin would argue that their audience is different. Kaymu looks at middle and lower class buyers who are particularly price sensitive, while other buyers might prefer more luxurious goods.

But in Indonesia not long ago, Rocket Internet’s open marketplace Lamido was dissolved, or “merged” with Lazada, an Amazon-style e-commerce store that took on more and more marketplace features. “We believe the future is in a controlled marketplace like Lazada’s as consumers expect an effortless and reliable shopping experience,” Lazada Group CEO Maximilian Bittner said at that time. Granted, in Indonesia, competition in the open marketplace space is much stronger due to the presence of strong local players like Tokopedia and Bukalapak.

It’s hard to follow the reasoning behind launching similar concepts, such as the open marketplace Kaymu and the managed marketplace, in a country like Myanmar which has only recently begun opening up to the internet. It gives the impression that Rocket Internet is testing business models and letting teams compete with each other to determine who executes best. Perhaps we’ll see a merger of Kaymu with Daraz somewhere down the line, just as it happened with Lamido and Lazada.

Editing by Charlie Custer.

This post was originally published on Tech in Asia

Featured Image Credit: Faisal Saeed / Flickr

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