Zarya Pakistan, a business-to-business social commerce platform based in Lahore, announced on Monday that it had raised $1.7 million in pre-seed funding. Raed Ventures led the pre-seed round, which also included Fatima Gobi Ventures, Class 5 Global, Global Founders Capital, and Egyptian social commerce startup Taager, according to a press release.
According to the press release, Zarya’s goal is to “eliminate the friction that small-scale sellers face when sourcing products, arranging the delivery, and collecting payment.” This would free up time for the sellers to focus on sales.
How Zarya Pakistan Started
The startup was founded by two brothers named Faisal and Saad Zahid, and the platform’s concept is to enable small sellers, primarily women, to source various products and sell them through their network.
Zarya Pakistan is a B2B e-commerce startup founded by brothers Faisal and Saad Zahid. Faisal is a former Careem director of product management, and Saad has directed operations for a variety of Pakistani businesses ranging from industrial-scale farms to steel manufacturing.
Zarya oversees the entire process, from product sourcing to delivery and payment, and even the overall profit transfer once a sale is completed. Furthermore, the startup has over 3,000 products on its platform, with plans to add more in a variety of categories including home textiles, makeup, shoes, and others.
Concept of Zarya Pakistan
The concept is known as social selling and it was pioneered by Meesho in India and has since been adopted by various startups from emerging markets, including Brimore and Taager from Egypt. Meesho raised over $1 billion in total funding and was valued at close to $5 billion in its most recent funding round by implementing social selling.
“Pakistan has over 100 million YouTube and 45 million Facebook users,” says Faisal Zahid, co-founder of Zarya. “Social media users in Pakistan spend more than three hours per day on social media apps. It’s natural to start buying and selling while on social media apps if you spend so much time online. We want to give our sellers every chance to succeed in this environment.”, he added.
Zarya Expanding to Supply Offering
Using the recently raised pre-seed funding, Zarya Pakistan intends to “eliminate the friction that small-scale retailers face in sourcing products, managing delivery, and collecting payment.” It went on to say that this would free up retailers’ time to focus on sales. According to the company, several of Zarya’s customers are housewives looking to supplement their income.
Furthermore, the pre-seed funding from Raed Ventures and others will enable Zarya, a B2B e-commerce startup, to expand its supply offering while maintaining reliability. “Scale success will necessitate a robust supply chain and process automation to ensure the service is reliable and customer-centric,” the press release continued.
How Zarya Works
Zarya positions itself as a digital wholesaler within the broader eCommerce space, allowing sellers, both online and offline, to directly source products from the Zarya app and sell them to people in their network.
Simply put, anyone, existing sellers or anyone who wants to be a seller without any investment, can simply choose a product on the Zarya app, add commission on top of the sale price, which is significantly lower than the market retail price for a few products scouted by Profit and compared online, share the product with people in her/his network on Facebook, an Instagram store, or even a WhatsApp message to friends and family, and earn the commission from Zarya.
The startup ships the product to customers throughout Pakistan for a standard shipping fee of Rs200, which is paid by the customer. On the Zarya app, the seller’s commission is currently limited to 50%. However, while Zarya positions itself as a platform for sellers only, direct-to-customer sales are not restricted on the app, and Zarya, perhaps inadvertently, taps the B2C market as well, where the end customer can also buy products at wholesale rates.
Zarya Pakistan Competitors
The distinction between B2B and B2C is also difficult in the grocery delivery industry. Startups like Airlift, pandamart and Cheetay appear to be aimed at end-users, but they also deliver groceries to convenience stores. In contrast, B2B startups such as Bazaar, which Zarya compares itself to minus the groceries, have restrictions in place that prevent end-users from purchasing from the Bazaar app, which lists products at wholesale prices.
Zarya Pakistan also becomes a competitor to the well-funded Daraz, which offers a wide range of products at reduced prices to customers. However, it is conditional on Zarya remaining primarily B2B rather than B2C. They are primarily concerned with making inventory available to sellers, whereas Daraz is a platform through which these sellers can sell their wares.
Sellers may be able to benefit from price arbitrage by purchasing from Zarya at a lower price and then selling on Daraz. Popular retail brands in Pakistan, such as Sapphire and Gul Ahmed, list on DarazMall but have product lines available to wholesalers, who then sell to consumers via offline channels.