E-Commerce in Jordan: Different Approaches From 3 Startups and From Jabbar and Aramex.

29 Aug, 2009

Petra-JordanE-commerce and online shopping did not take off in Jordan and the Arab region for many reasons. Payment processing and delivery solutions are not as efficient as they are in other parts of the world. As electronic and credit cards are not common in Jordan as it is in USA .

In this post I examine the different startups and companies that are offering solution that caters to the current market conditions in Jordan:

International Solution:

shop & ship from aramexShop&Ship: A service from the regional delivery company Aramex, which solves the problem Jordanian e-shoppers face when trying to buy from US or UK based e-commerce websites. As  many of them require a local (US or UK) address.

The service Shop&Ship was launched in 2001 and covers the whole Middle East. The service  addresses the local address problem by offering a life time personal mailing address in the US and the UK where you can receive your correspondence as well as personal and business packages such as Internet orders, gifts, magazine subscriptions, bank statements and more. Aramex then forwards the mailbox contents to your doorstep back home. To open a mailing address with Shop&Ship you have to pay 35$ for a life time account.

So now if you shop on Amazon.com for example, you enter the Mailing address that Shop&Ship assigned to you in New York (NY) USA, the package is delivered to NY then Aramex ships the package to Jordan.

Aramex charge per weight and if the items need custom clearness, Aramex does that in behalf of the client and charges him/her upon delivery “We offer completive shipping pricing and transit time to Jordan and Middle East compared to what the e-commerce websites offer .” said Iyad Kamal, Chief Logistics Officer of Amarex.

In 1997, Aramex became the first Arab-based international company to trade its shares on the NASDAQ stock exchange now publicly listed in Dubai Financial Market (DFM.)

Local Solutions:

wheels expressWheels Express: Launched last May, Wheels Express offers diverse variety of goods that include original DVDs, Snacks, Pre-paid and mobile cards. The startup does not have an inventory; instead it established relationships with certain vendors. Orders can be made online or via a call center, and Wheels Express provides the delivery via its cars, delivery time is promised to be within 1 hour and payment is by cash upon delivery.

wheels express page

Wheels express currently covers delivery to west Amman. Delivery is available 12 hours every day (12PM – 12AM) and costs 1.5 JD (1 Jordan Dinar (JD) is 1.41 USD) on each order with minim order 5 JD.

I called today Ibrahim Manna one of Wheels Express founders, and told me they have 900 registered users, but only 25% use the startup web front to place orders, he added that his company broke even last month. Ibrahim ‘s previous startup for the last 3 years was called DVD on Wheels which he said was very profitable with 3000 members, but closed it because it was selling pirated DVDs.

souq.comSouq.com: used to be part of Maktoob Group and now part of Jabbar Group of companies which emerged after Yahoo”s purchase of Maktoob. Souq.com started around 2005 offering an eBay like auction website, where people can sell stuff and buyers bid for them. Souq.com has different local versions for UAE, Saudi Arabia and Jordan. The auction website local version for Jordan has different payment methods: cashU (a prepaid payment card also from Jabbar), Cheque or Cash, Cash on Delivery (COD) service in cooperation with Aramex.

The delivery can be done via Aramex or the buyer has to go to the seller’s location to pay in cash and collect the item/s.

souq.com homepage

The payment method that is called Cash on Delivery (COD) from Aramex, goes like this: Aramex collects the item from the seller and delivers it to the buyer. The Buyer pays in cash the item’s price plus delivery fees. And then Aramex sends the money to Souq.com which in turn deducts its transaction fees of around 5%, Souq.com  releases the funds 15 days after delivery or once the buyer rates the seller positively. Souq will deposit the funds into the seller cashU account. If the seller does not have a cashU account, one will be created for him/her and fund deposited automatically. Deliveries of less than 5 kilometers are free of charge.

photoJONETPhotoJONET: A photo storage and printing website service.  You upload your photos (up loader is built on silverlight from Microsoft) and then place an order to print any of your photos at different sizes from 9x13cm to 80x120cm.

According to the startup  website the delivery is offered within 24 to 72 hours and is free of charge  if the order’s total amount is 6.00 JOD’s or more. Other than that, 2.00 JOD’s apply.

Like Wheels Express, PhotoJONET bypass online payment all to gather and focus on service and accepting cash payment upon delivery. The site  is currently running 10 prints FREE campaign, I placed an order and if I get it you I’ll tweet about it on ArabCrunch Twitter account.

JOORDERJOOrder Unlike PhotoJONET and Wheel Express, the site does not offer delivery service itself , what it does is connecting you to different restaurants in Amman under different categories (Asian, Burger, Grill .etc.) You place an order and within 5 to10 minutes the restaurant will call you to confirm the order. The delivery is done via the restaurant’s delivery staff at the cost and the terms that each restaurant sets for its delivery service. I placed a test order to Kebab express and they called me within 10 minutes, but I had to cancel the order telling them this was just a test from the media :).

One big note to make here, JOOrder has a nice concept but the website has poor ASP.NET code and messy look and feel: I tried to access it several times in the last 1 or 2 months and I keep getting error messages. Another problem, the site does not work well on FireFox and has no AboutUs page. Instead it has a lousy flash intro that takes loads of time to load, Joorder is developed by company called Echotech. These guys need to understand the ABCs of web marketing and design.

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