By women, for women: How two sisters are bootstrapping an online marketplace in Dubai
When we last chatted
with the Kanaan sisters, the founders of
Ananasa.com, they
were struggling with a classic problem that many young startups in
the Middle East face: they were having trouble finding the right
developer to take their online handicraft marketplace to the
next level.
Today, almost a year and a half later, the startup is continuing to
grow, employing two new team members and launching a
crowdinvesting campaign on Eureeca, a move that many young
startups are taking in order to find funding when institutional
investors prove difficult to convince. As a young startup in Dubai
trying to tackle the same problems that larger e-commerce companies
are facing, Ananasa's journey as a bootstrapped startup offers an
honest look at the problems that young entrepreneurs in Dubai are
solving.
The challenges of bootstrapping an e-commerce company in Dubai
Two years ago, Rania and Zeina Kanaan launched
the platform in Dubai with the goal of providing designers,
artisans and artists from the Arabic region an online marketplace
where they could sell their products to a global
audience. Today, after two years of hard work, they've
grown Ananasa's offering to 400 sellers and 3000 listed
items, which are valued at $100 on average.
By focusing on their user experience, and their marketing, they've
been able to grow the site to have a loyal customer base, but it
hasn't been easy, for several reasons.
First, Dubai is expensive. lyWith registration, salaries,
and offices proving expensive, the two sisters, had considered
moving to Jordan to lower costs.
However, Dubai's reputation as a hub convinvced them to stay. "The exposure a startup gets in Dubai is not present in other cities in the region,” Rania explains. This can be a positive and a negative aspect, as too many PR events can overwhelm a small team, but by finding a balance attending events and working, Ananasa was able to grow.
Another main challenge the young founders faced was
dealing with the lack of regional nfrastructure when it comes to
online payments. At the end of each month, Kanaan explains, the
team would get “depressed” from assessing the fees needed to
transfer online payments back into their working capital
accounts.
Logistics, when coordinating between a variety of sellers and
shipping to several buyers, also proved difficult, but the sisters
are hoping to overcome that challenge by eventually handling their
own delivery.
New momentum
Today, they've overcome most of their early struggles, partly thanks to building a network of supporters. “It's hard to give day to day advice in our business as the concept is still nascent, but our mentors give us general very useful support,” says Rania.
Of course a big part of moving forward is finding the right people to depend on. The Kanaans have recruited a full time developer, who is also "very passionate about the concept and understands what we are about,” says Rania, as well as a digital marketer who has given the company new momentum and fresh perspective on reaching their international buyers in Japan, New Zealand, and the U.S."
Both hires happen to be women, making Ananasa an all-woman company. “By coincidence, not by design, we met them both, and almost at the same time,” Rania explains.
To boost buying, Ananasa has also decided to add a
bargain
function, to give customers a chance to negotiate on the price.
Although this echoes eBay's auction model, it works in the reverse
direction, driving prices down rather than up.
You'd think sellers would rebel against it, but it's actually
increasing sales, says Kanaan. "People like a bargain and like to
win. This features plays on this and is proving very effective.
Surprisingly, it's slowly increasing our average order value,
because, while buyers would prevously turn away from big ticket
items, now they can actually get them at a price they can afford.
The sellers are getting great insight and it has definitely
improved or conversion rates."
A total of 34% of viewers return to the site, with 10% of buyers
returning to buy twice, and, of those, 20% returning to buy three
times, she reveals.
Turning to crowdinvestment
Now, with their feet under them after two years
of development, the two sisters are looking to raise their brand
visibility. “We are now focusing on taking all the feedback
and energy from the people around us to make Ananasa a stronger
brand and a business that affects the lives of people,” Rania
describes.
To do so, the team has launched a crowdinvesting
campaign on Eureeca. “We decided to invite the
crowd to invest, because Anansa is a marketplace built for the
people and by the people, and we want to bring together the
community under one roof,” Rania says.
Investors in Ananasa will be helping to scale an opportunity for women to sell to international markets, Rania explains. “We had a lot of support from people who want to see us grow, and invest in the concept and the team so we decided to give that chance to our community and whoever feels passionate to help us out.”
The team hopes to raise US $65,000 in three months, giving away 6.5% equity, at a $1 million valuation; the funds will cover salaries and an expanded marketing campaign. To date, Ananasa has only taken on funding from friends and family. At time of print, their campaign has reached US $1,300, but the founders are optimistic.
The growth of handicraft marketplaces
It's no secret that niche marketplaces can be a tough
business- even Souq, the region's very first marketplace, pivoted
away from the marketplace model and towards online retail when it
killed online auctions, to streamline its control over its
inventory and pricing.
Yet the Kanaan sisters are buoyed by the success of Etsy, the marketplace for handmade and
vintage items. Only eight years after its launch, it sees almost a
billion dollars a year in sales, and foes over
$500 million in revenue.
One reason the two sisters don't think they have strong regional competition in the Middle East is that most players are very confined to local markets, they say. However, Egyptian platform Cirqy, whose model emulates Etsy, has regional ambitions, and OpenDayz, which features Egyptian products for now, is also planning to expand in the near future.
Ananasa is happy to have competitors in the space, Rania says. “We don’t think anyone in the market is doing exactly what we do, but the more these websites pop up, the more the market will grow, which makes us happy because we will have more pieces to grab,” she says.