Masoud Tabatabaei, CEO of Digikala, said in an Instagram live conversation
“Based on a public opinion survey conducted in collaboration with ISPA, we concluded that there is a need for a physical store; some people are not inclined to shop online, some do not trust it, and some are not even familiar with Digikala. One of the other decisions resulting from this study was to advertise on television. We have returned to television after several years.”
Digikala Store Didn’t Incur Costs
He explained about the future of Digikala’s physical stores: “The response to this store has been good, and we register around 5,000 orders a month. The owners of commercial centers have requested to host more Digikala physical stores. In the future, we will definitely expand to cities other than Tehran and operate in other product categories, such as home appliances and fashion.”
In response to a question about whether it would have been better to spend the setup costs of this store on more useful areas, he said: “This store has not stopped the online space. Digikala’s priority has always been to improve the quality of online services.”
He continued: “The amount spent on the physical store is not significant enough to affect other parts of Digikala. We spend several billion rials annually on operations. Before joining Digikala, I couldn’t understand the depth and breadth of this section.”
Redesigning Digikala’s Support Section
Many users express dissatisfaction with Digikala’s support and logistics on social media. Tabatabaei explained the complaints: “More than 95.8% of orders are delivered on time. This figure is a good rate according to all global benchmarks, but when you multiply the remaining 4.2% by the number of Digikala orders, it becomes a large number. Despite all this, our goal is to achieve 100% on-time delivery.”
He also noted that the proportion of fake products on Digikala is negligible: “The percentage of fake products on Digikala is less than 0.02%, which is very small; there are heavy fines for sellers of these products. Nevertheless, it can happen. We are committed to bringing this number closer to zero, but the reality is that this figure must be considered in the scale of Digikala.”
According to him, Digikala’s support structure and personnel are being redesigned.
The Controversial Mugs
Another issue was the controversial mugs that led to Tabatabaei’s arrest. He said: “The writing on these mugs has a specific template, and names are inserted in the blank space. Our sellers were selling these mugs with common names in the country, one of which is religious and can be attributed to Hazrat Fatemeh (S). This caused some people to think we did it intentionally.”
Tabatabaei continued: “As soon as I was informed, I ordered the sale of these products to be stopped. We also issued a statement and apologized. Other sites were selling it too, but in the end, I was arrested and went to court. To some extent, we convinced the authorities that we had no ill intent and would not permit ourselves to insult anyone, especially the Ahl al-Bayt.”
He used the keyword “distrust” to explain the reason for such events: “In a climate of distrust, anything can be misinterpreted. If we trust each other, it will not be interpreted maliciously. In the one and a half years that I’ve been at Digikala, I’ve worked on building trust.”
Tabatabaei also added: “Hamid and Saeed Mohammadi, during their time at Digikala, have been focused on their work and haven’t been much involved in media presence or interactions with the government.”
In his view, Digikala’s size is such that it cannot be said to belong to shareholders; it is a national brand.
Government Should Enhance Digital Economy Advantages
In another part of this live conversation, he also explained his expectations from the future government: “We live in hope. Wherever there has been a conversation, I have asked government officials to bring back hope to this country; if it is not there, nothing can be done.”
Tabatabaei had another request from the government: “There are other demands too. One is that the space should not become securitized. Ecosystem activists definitely have a duty to observe some considerations, but the space should not become securitized.”
The CEO of Digikala continued about his expectations from the government: “Another issue is related to tax, economic, import policies, and the like. If we move towards the non-digital space, we will miss out on the advantages of the digital economy. Note that the share of online retail in total retail in Turkey is over 20%. In Iran, this figure is between 5 to 5.5%, while it should be between 15 to 20%, although there is no completely transparent and reliable data on it.”
He criticized the excessive control over online businesses and said: “In this situation, instead of moving towards transparent businesses, we make them go towards non-transparency. We say imports are banned, but there are contraband goods in the market; the door is closed, and the window is open. We only hold the neck of a transparent platform like Digikala. As a result, the goods are offered in a non-transparent space where consumer rights are not respected, there is no oversight, no after-sales service, and it’s unclear how the money moves.”
Tabatabaei added: “The government’s macro policy should be such that moving towards the digital economy is an opportunity, not a threat. Both for current players and those who have not yet entered the online space. If you want to start an online store, there are many obstacles; permits, the eNAMAD, the gateway, and price control. The government should make the digital economy an advantage.”
Competition Doesn’t Make Us Happy but It’s Helpful
The impact of “Snapp Shop’s” same-day delivery service in prompting Digikala and Snapp Shop’s market share. Tabatabaei responded: “I don’t have an exact number on Snapp Shop’s market share, but it’s a good initiative. Competition certainly helps us grow. For example, Digikala owes a lot of what it has now to competition with Bamilo, even though Bamilo failed and preferred to withdraw. Although we are not fond of competition and it doesn’t make us happy, it helps us get out of lethargy.”
He also stated: “If we feel that Snapp Shop is taking market share from us, we need to do something to bring back the users who have gone there. For example, over the past year and a half, we have expanded same-day delivery service in Tehran. We have also activated next-day delivery in many cities. Not because of Snapp Shop, but because of the overall trend of quick commerce. We haven’t done much marketing on it, but it’s been well-received.”
Regarding “Digikala Jet,” Tabatabaei said: “Digikala Jet has come alongside us and is an independent venture. It can’t be said to be Digikala’s most successful venture. The end of the year will be better to assess its situation. Good competitors like Snapp and Okala, with high capabilities, are present in this market.”
It’s Not Yet Time for a Restaurant Service
In response to a question about Digikala’s desire to become a super app, he said: “We try to offer all services on the Digikala platform. Each of the super apps is based on a core service, like Snapp, which is based on the taxi core. Digikala’s focus is also on e-commerce. We consider ourselves a One Stop Shop. The services we offer alongside ourselves can be considered as a super app.”
Tabatabaei also talked about new services: “Right now, we have separated the supermarket. In the second half of this year, we might separate other services, but it’s not yet time for a restaurant.”
Will Digikala Go Beyond Borders?
The CEO of Digikala spoke about activities in foreign markets, such as Russia: “There are several serious players in Russia, and it’s not an untapped market. Moreover, sanctions make it difficult, but definitely, entering international markets is one of our development paths. In the past year, we have gained some experiences in this regard. We have a few goals in this area, one being exports and the other Cross Border.”
He added: “In the world of e-commerce business, success without CrossBorder is not possible, both in exports and imports. Here we have the issue of laws, and we have had extensive discussions about it to familiarize people, but we haven’t succeeded yet. The regulations need to be adjusted so that we can carry out these international activities.”
According to him, sanctions also affect this path: “Certainly, sanctions make it harder. Investing in an Iranian company is difficult. We need to have a partner outside the borders, which is also difficult, but these haven’t stopped us from pursuing this area. Last year, we had one or two promising experiences and one or two failed experiences. We are working on this issue with some neighboring countries, like Iraq, Russia, Azerbaijan, Saudi Arabia, and Oman, but it’s challenging to launch the Digikala platform in another country, and we are far from that.”
The CEO of Digikala also talked about entering the second-hand goods market: “We have started this work and are seriously pursuing it. In the mobile section, we have started this service. The user reports the appearance and specifications of their item, and we quote a price. Our pickup service takes the phone for evaluation. If the user agrees, the money is transferred to their account. They can cash out or buy from Digikala. There is also the option to trade with another second-hand item.”
According to him, after resolving the side issues of this service and making it scalable, Digikala will move to other categories besides mobile.
Tabatabaei also spoke about “Pindo”: “Pindo does not have strict oversight and policies, and any seller can offer their goods there. In Pindo, the buyer is in contact with the seller; we have no operational duty there, only facilitation.”
As the Digikala CEO announced in this live conversation, Digikala’s entry into the stock market is being pursued, although the decision to offer shares is up to the “group” of Digikala. Tabatabaei said: “We are waiting for the green light from the stock market. We hope to do it this year.
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