INTERVIEW-New halal e-commerce site Aladdinstreet aiming for $750 million in revenue for first year of operations

Aladdinstreet.com, the new Malaysia-based halal e-commerce site, is aiming to make $750 million in revenue within its first year of operations, co-founder and president Dato Sri Desmond To told Salaam Gateway.

This is based on an estimated 50 to 100 merchants in each of the 30 countries the platform will have a market presence in, he said. 

The e-commerce portal will deal with pharmaceuticals, fashion, cosmetics, food and beverage, and financial products and services.

Each merchant turnover for business-to-business (B2B) transactions is targeted at $270,000 per year and business-to-consumer (B2C) transactions of $20,000 per year.

“This is very achievable. One consignment sometimes already costs about $100,000 for each merchant,” To said.

As a comparison, global giant Amazon earned $107 billion in revenue last year and Alibaba Group reported revenue of $5.3 billion for the fourth quarter of 2015.

In the dedicated halal sector, Malaysia-based DagangHalal, an e-marketplace to verify halal products, reportedly earned 3.4 million ringgit in revenue in 2015 ($0.87 million) from 1.18 million ringgit in 2012.

Zilzar, another Malaysia-based B2B halal online marketplace that is Aladdinstreet’s direct competitor, was launched in October 2014 but has yet to disclose any financials.

HALAL, QUALITY STANDARDS

Aladdinstreet aims to address what the company perceives as weaknesses or loopholes in other e-commerce websites by being selective in its merchants and providing backend services via partnering with local logistics, payment gateways, and warehouses and retail management companies to ensure that products remain halal throughout their export process.

Merchants’ participation on the site is by invitation only.

To ensure compliance to halal standards Aladdinstreet’s Business Integrity Task Force, which is an international panel of experts on halal and Shariah matters, performs due diligence on each merchant.

“The e-commerce sites that are available now have too many products that make it difficult for you to find quality ones. There is also a lack of understanding on what is halal – where you sometimes come across a section of halal category at an e-commerce site which sells what it claims to be ‘halal pork’,” said To.

Aladdin will only feature the top five brands of each product from every country listed to ensure product quality.

The group hopes to sign on at least 1,500 merchants to potentially provide 30,000 products on its website within three years.

Aladdinstreet is made up of two sites: a domestic Malaysian platform where merchants would need to pay an annual registration fee of $2,500 and a global platform for an annual fee of $5,000. 

Merchants would immediately be able to market their products to all the 30 countries that Aladdin has a market presence in.

The domestic platform will be launched on April 18 and the global platform will be launched by the second half of this year.

The group expects to spend $100 million over the next three years for global advertising and promotional activities.

SECURING HALAL IN PRODUCT DELIVERY

Executive director Azizi Meor Ngah, who has been on the board of the Halal Industry Development Corporation (HDC) for almost a decade, said Aladdin is addressing the loophole within the unregulated halal supply chain – and this is its competitive edge that sets the company apart from its competitors.

“Besides providing assurance to customers, Aladdin’s partnership with service providers in transportation, warehouse and retail management will help to set [the] industry’s halal standards and procedure[s] to guarantee that goods are not contaminated with non-halal items,” he said.

The group’s standard operating procedure and business template will be shared among partners. It has so far firmed up partnerships with merchants in China, Dubai, Indonesia, Iran, Japan, Singapore, and Taiwan.  

The company is aiming  for IPO in the United States in 2018 and hopes to be the largest halal e-commerce platform by then, said To.

© SalaamGateway.com 2016