KUALA LUMPUR - When it launched in 2016, the online halal retailer co-founded by Malaysia’s first astronaut shot for the stars. The sums of money and projections Aladdinstreet bandied about were more in line with aerospace budgets than those of a niche e-retailer from Southeast Asia.
In February 2016, Dr. Sheikh Muszaphar Shukor, who visited the International Space Station aboard a Russian mission in 2007, declared the e-commerce start-up had “planned and allocated up to $100 million for global branding, advertising and promotion”.
The following year, Aladdinstreet engaged in a multi-million pound deal to sponsor football superstars Manchester United.
And in March 2018, fellow co-founder and Aladdin Group president Desmond To predicted the store would quickly raise $100 million in financing and revealed it had its sights set on $1 billion in turnover. In April 2018 the company said Malaysia was no longer a priority and it would focus on expanding into the global market.
Then nothing. Almost overnight, its brand and message seemed to have been lost in space.
For more than two years, nothing was heard from an online retailer that had promised to take halal products to the world. The millions promised in advertising, sales and revenues appeared to have gone the same way as its shuttered storefronts—initially promised for 40 countries.
THE NEW ALADDIN
Now manned by a new crew, rebranded Aladdin is hoping for a “more sensible approach” to its operations, according to Eizaz Azhar, its new boss.
The 33-year-old former head of strategy at Malaysia’s Halal Development Corporation (HDC) was installed as chief executive in August at a far more low-key launch than the company had previously been known for.
Instead of announcing more billion-dollar moonshots, the company is now intent on rebuilding its business model, platform and partner base, Eizaz told Salaam Gateway. Instead of aiming for a billion-dollar valuation, he would be happy if the store grew sufficiently to become listed.
"Without selling the hype, the reality is, if we get everything solved, we are looking at a potential IPO for this thing,” he said.
“The most important thing, though, is not to worry about what will happen in five years, it’s to solve the problems right now. We need to build something that is efficient, that is scalable, that is reputable and which actually works.”
Though vague in his assessment as to why Aladdin’s first iteration had failed to take off, citing the difficulties of business in a tough e-commerce environment, Eizaz also mentions “creative differences”, giving the impression that different executive forces had been pushing against each other.
Co-founders To and Dr. Sheikh Muszaphar remain on the board, but many of the other original staff have been let go. Despite his continued presence at Aladdin, it is notable that the astronaut is no longer being thrust centrestage in its media effort, as was previously done.
NEW PARTNERSHIP MODEL
In its first iteration, the start-up aimed to provide storefronts that would penetrate the premium segment of Malaysian and global halal markets for a putative audience of 60 million consumers per month.
Now, it wants to focus on its brand as being the glue to provide stores in up to 40 different countries a range of services through a partnership model.
At present, 15 partners are in talks with Aladdin to open stores in countries including Italy, Dubai, Pakistan and Vietnam, while the Malaysian store will be run by the head office.
“We have to find the right people who understand this business. Previously, we also had a partnership model, but [the partners] didn’t quite understand the complexities of what was required,” said Eizaz.
“Now, when we look for partners to run our local business, we’d at least expect them to have some understanding of e-commerce and logistics, and have good network of local players. If someone doesn’t have those sort of criteria, we would have to find someone else.”
Also changing is how Aladdin sees itself. It now describes itself as a “tech company” instead of an “e-commerce platform”. Though this might sound like semantics, the chief executive stresses that aside from online sales, there will be "a bunch of interesting trade mechanisms and even payment gateway mechanisms”.
This tech development is being co-developed with a third-party in China, whose name Eizaz will not reveal yet, though he says it will be familiar to most people. This will be announced at the start-up’s formal launch, with a date set for November 11.
“If we already have all these propriety things, if we are going to develop certain pipelines that only we can develop, then we should be labeled as a tech company, rather than just a small e-commerce one.”
Still, the focus will be on retail for halal products, which can come under any certification stamp. In addition, so-called Muslim-friendly products will be accepted for retail and will be marked separately. These will include items that are intrinsically halal but which do not have certification.
Aladdin will also be open to a wider range of product categories beyond consumer goods, including agriculture and biochemicals, healthcare and travel operators, with business-to-business sales added to the mix.
At least in Malaysia, fulfilment will be done through strategic partnerships with warehouse operators and last-mile delivery specialists. Local partners would be expected to arrange their own approaches.
WHAT’S ALADDIN’S ROLE?
Pressing questions remain for a platform that uses outsourced technology, a retailer that calls on third-parties to do the selling and a fulfilment model that engages logistics companies to ship products to consumers.
What is Aladdin’s role in this, especially since its brand and cachet are far from proven? And how will it establish credibility with investors after previously throwing up such implausible numbers?
Eizaz sees the start-up as a “huge coordinator” and the "connective tissue that exists to bind all these ingredients together”.
“We will empower the local guys, because it’s their gig, their show and only they would know their region. But if someone were to do this on their own, they’re going to be in a lot of trouble.”
At the same time, he fully expects to be “kicked around” in his new role while Aladdin repairs the damage from its first incarnation. The role will be under scrutiny and “when you give out some big numbers and if you don’t match them, your reputation takes a hit. Just give us a bit of time to put things together again,” he said.
He likens his task of turning a lapsed start-up around to being a newly-hired Premier League football manager who has to show results straight away to survive.
“People think doing something like this is so easy. But this is war, it ain’t some sandbox. There’s nobody to catch you with a safety net. If you don’t win your first three games, you’re out. That’s how we have to treat it; like a very high-performing, high-risk entity. Everything is at stake.”
(Aladdin Group contacted Salaam Gateway after the publication of this story to say that Eizaz was not referring to the company but to his role as CEO when he said "high-risk entity". We have retained the verbatim quote as is.)
(Reporting by Richard Whitehead; Editing by Emmy Abdul Alim [email protected])
*Corrections were made on Sep 30:
1. The photo caption wrongly referred to Eizaz Azhar as CEO of Aladdinstreet.com. He is CEO of Aladdin Group.
2. Under the section "New Partnership Model" Aladdin Group says it is co-developing its tech with a third-party in China, and not outsourcing it to a third-party in China as was originally written.
3. Under the same section, "halal-friendly" is replaced by "Muslim-friendly".
4. A line was added after the last sentence to say that the Aladdin Group CEO clarifies that by "high-risk entity" he was referring to his role and not to the company or business.
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