Jordan Startup CashBasha Localizes The MENA E-Commerce Experience
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Here’s a scenario that should sound familiar to those of you in the MENA region: you’re just a few clicks away from completing a purchase on an international e-commerce site on which you’ve found that fashion accessory or favorite book not available in the country you are in, but then, at checkout, you find that either the site does not recognize your credit card, or that the cost of shipping exceeds the product price. Jordanian startup CashBasha’s team observed this emerging market-centric issue to be ripe for a tech solution, and thus built a platform that enables MENA shoppers to buy from global e-commerce portals such as Amazon, and pay for your order with cash.
“We’ve built tools that offer an automated, transparent and all-inclusive service right to your doorstep, as if you’re being served directly by the site itself, but with all the locally preferred emerging market means of transaction, delivery and support,” says Fouad Jeryes, co-founder, CashBasha. CashBasha co-founders Fouad Jeryes and Sinan Taifour’s entrepreneurial pursuits started off in early 2013 after stints in various tech companies, encouraged by the fact that their skills were complementary in nature. The duo launched PayHyper- a cash collection network, which introduced a creative solution for the issues surrounding cash on delivery (COD) by flipping it as “cash before delivery.” PayHyper was a combination of physical locations and networks of couriers, where customers can shop online and pay for them in cash at trusted locations near them, or at their doorsteps. The decision to pivot from PayHyper and start CashBasha was a result of extensive research by the team, which showed them that 80% of e-commerce retail in the MENA region was flowing from major global e-commerce players. “We believe that one of our success points is that we’ve been able to map how emerging market customers want to be served onto international shopping sites in [a] manner that hides all the complexities of purchasing from the customer completely,” Jeryes says.
In this endeavor to build a tech platform that allows the “unbanked” population to shop without logistical or pricing hassles, the CashBasha team ensured that their solution supported any and all shopping sites. But currently, they are partnered with just one site- but it’s a great first partner to have, given that it is global e-commerce major Amazon. “[We] chose to begin with Amazon because our research had shown that about 40% of any online purchases being made in our [MENA] region all came from that one site.” Without elaborating on the terms of the partnership with the e-commerce giant (owing to non-disclosure agreements), Jeryes says that though “strategically, we’ve [CashBasha] aligned with Amazon, we’ve designed our technology to be agnostic and work on any e-commerce website by design.” He adds that they have received requests from customers to integrate more sites, and are considering it, but are also “very happy with the tightly coupled experience we’ve built” with Amazon.
It is this full circle customer experience and the ease of shopping from Amazon’s global catalog that seems to have contributed to the startup’s growth. According to Jeryes, another factor that drives customers to transact with them includes a feature enabling Arabic search. In addition, he also talks about an alert system where customers are informed if a particular item in their basket is prohibited from being imported into the destination country, ahead of order confirmation. CashBasha also claims to have engineered proprietary customs algorithms to keep track of any changes in packages as they come through. Citing these features, Jeryes emphasizes that despite the presence of competition, “none have produced a seamless and automated technical solution” as CashBasha has.
While the business serves a crucial purpose, I can’t help but wonder if CashBasha is limiting itself to customer groups who still prefer and use cash for e-commerce transactions, which, as per most industry reports on digital payments, is a reducing class. I voice this concern, and also ask Jeryes about how comfortable he is to be advocating payments in cash for e-commerce. He is quick to respond that CashBasha is an “e-commerce technology startup,” and they see cash as “the preferred means of transaction for the next 15 years, at least according to some credible studies,” He adds that in the cash-dominated markets served by CashBasha, only 20% of the transactions are digital in nature. Additionally, he points out that CashBasha’s tools also aid in international sourcing, shipping, customs clearance and other allied needs, and are not just a means of payment. As for my query on supporting COD, Jeryes stresses that their method is “cash before delivery,” and not COD. “We do not necessarily advocate or overly encourage cash payments, in fact, we want customers to transact in whatever way they are comfortable with.”
With respect to financial support, the startup has managed to gain trust of investor groups such as Aramex Ventures and 500Startups, raising an undisclosed amount of seed investment from them. “[We] will be raising a major round within the months to come,” adds Jeryes. While raising money from such strategic investors can help bring attention to a fledgling venture, it comes with its share of challenges, and Jeryes says that "the initial terms that were put on the table were not the most startup friendly,” but they had made the right choice of investors. “We always wish the process could have been faster, but larger companies naturally work at a slower pace,” he says.
Besides the perpetual funding woes, CashBasha also had to face a challenge that is specific to the Middle East region- issues related to citizenship and residency. In early 2014, co-founder Taifour (a Syrian national who had lived in Jordan all his life), had troubles in renewing his passport owing to the political situation. To ensure that this didn’t affect operations, Taifour chose to make use of his German visa and work from Germany, which brought with it management challenges. “Considering the move, we had to build the site and all the operational channels of the business as a two-person team sitting a couple of thousand miles apart,” says Jeryes.
After persevering through such hurdles, the past year has been kind to CashBasha, with the startup adding a few key achievements to its name. CashBasha emerged as the winner of Startup Istanbul 2016, an event that brought together entrepreneurs, business leaders and investors from across Asia and Europe. Coming in first place out of 2,700 startups that applied, CashBasha was one of the 15 finalists that pitched onstage to a jury panel including investors from 500Startups, Y Combinator, Abraaj Capital, and others. Another landmark moment for CashBasha was when the co-founders were chosen to have exclusive time with Amazon’s Jeff Bezos and five other senior vice presidents of the company, along with other Jordanian entrepreneurs, during Bezos’ visit to Jordan in November 2016. Posting on his Instagram page about the experience, Jeryes called it “a milestone in our careers, and we couldn’t be more thankful.”
Jeryes also carries the same excitement to the business’s future. He believes that CashBasha is poised to pursue and succeed in a number of opportunities. “It is surely an interesting time in the region for e-commerce, as major business leaders are just taking notice and there are talks that billions more will be poured in regional funding,” he says, referencing recent regional developments. Noting that the “hunger for differentiated products, at competitive prices” among MENA consumers is not any different from aspirations of established markets, CashBasha wants to keep at their mission of ensuring that no one is “limited by what you can, and cannot, buy online.”
The modus operandi
How does CashBasha work
1. Search for the product you’d like to buy from Amazon through CashBasha’s integrated website.
2. Place the item in your shopping cart as you normally would, and checkout.
3. At checkout, select payment method, and other order details to place the order.
4. In case of cash payment, the startup’s customer service team will pick up the cash amount at your door and present a confirmation receipt. Credit card payments can also be made through the portal.
5. Finally, the goods reach the customers in a timeline that depends upon where they are being shipped.
Fouad Jeryes, co-founder, CashBasha
What’s your take on the evolution of the entrepreneurship ecosystem in Jordan and MENA?
“Over the past six years, quite a bit has happened. The build up of awareness, and attention towards technology startups is inspiring, but we aren’t too far from the starting line. Although, now perhaps cliché after seven years, Maktoob’s acquisition is still the most visible event that has taken place, sadly. We remain optimistic that more success is to follow, but we would argue that the type of success entrepreneurs should be looking for needs to be in check. Smaller and more frequent wins, exits or mergers are more realistic and worthy of the current market pace. Amongst these well-positioned and focused companies, we’ll surely see more promising candidates with the ability to grow into larger entities.”
What’s your advice for entrepreneurs on fundraising and maintaining better relations with investors?
“[Firstly], work, work, work. Don’t give investors much attention, as [when] they may sidetrack you at the beginning. Make sure you’re visible and constantly on their radar, but make sure what you’re working on is doing well and presents something promising. They’ll come to you. [Second], don’t be dragged down by any formalities when it comes to your initial investment rounds. Consider convertible notes and startup friendly terms that do not delay your progress or constrict your freedom to experiment. Refrain from forming a board, worrying about interest rates, and having to report back on every move you make. Your investors need to trust you, and be there for you when you need them at the early stages, but not bog you with their paperwork or nosiness. [Finally], focus on growth and make sure you find investors that appreciate and understand that.”
What are your top tips for aspiring entrepreneurs to start and scale a business in the region?
1. "Prepare for mental and emotional strife, then learn to embrace it. Being an entrepreneur is an exhilarating journey, but you’ll soon realize that although you know it’ll be a challenging path ahead, the ‘type’ of difficulties you’ll encounter will be tough to anticipate- no matter what you do. You will question yourself, your existence, and be surprised by your vulnerabilities. It will be awkward and uncomfortable a lot of times, but learn to welcome it with open arms because it is personal and professional growth and development disguised as a short-lived struggle.”
2. "Learn from everyone and follow no one. No matter who they are or what they do, somehow we’ve found that there are takeaways from any interaction you could have, and gain from them. Some of these might be in the form of ‘what to do,’ and others are even more important ‘what not to do’s.’ There are a lot of jokers out there.”
3. "Throw yourself in the deep end, but be sure to ride a wave if you see one. In most cases, the market will tell you what to pursue, and what seems to be a bit off the beaten path. There are always ways to innovate and introduce something new or in need, but you need to look for patterns and work like hell. You need to commit yourself to your work and sacrifice a great deal of time and resources to see it through.”