Online shopping club, Sukar.com plans expansion
Members only site sells designer and high-end goods at low prices, claims 500,000 customers in Middle East
Online shopping club Sukar.com is looking to cut delivery times and open more offices in the region, following initial success in establishing operations.
Sukar.com is a private shopping club catering to the Middle East region, which features high-end designer goods at low prices to members only, for a limited period of time. Members are sent emails on a daily basis detailing what products are on offer and at what price.
Recent deals featured Lacoste watches, Fornarina handbags, the iPad and the iPhone 4.
"The principle of private shopping clubs is that our customers only see what we offer in term of the selection and pricing if they are members of the site, so you need to become a member. There are various ways of becoming a member, one of these ways is being invited by a friend who already is a member another is being invited by ourselves. Sometimes we run promotions where we ask people to register and then we activate them," said Muhammad Chbib, CEO of Sukar.com.
Offers on the site change on a daily basis and website members can purchase items until they run out, or the campaign is over. Sukar sets itself up as an exclusive online shopping outlet.
"The most important thing is that Sukar.com is not visible for everyone because we don't want to have this cheap outlet character, this is not good, if you think of outlets it is always a cheap thing, where as we have very selected items," said Chbib.
After one year of operations, Sukar.com has approximately 500,000 customers across the GCC, Jordan, Lebanon, Egypt and Saudi Arabia, between 70% and 75% of these are active buying users. Chbib said that once customers have made one purchase with the website, they often come back for more.
Sukar.com relies very heavily on its sourcing power to provide high-end consumer good's deals at low prices,
"Our sourcing team is organised globally. A lot of our campaigns come from the US, Europe and some come from the region. We deal directly with brands and distributors of brands and the only important factors for us are authenticity of brands, availability of brands and the pricing. So we look for good deals. The power of our model is that whilst things are pretty expensive these days in Europe, we have the power to source them from North and South America and even from Asia if needed," said Chbib.
The company is also part of a global network of shopping clubs and some of its investors have founded 15 to 20 shopping clubs worldwide, giving the company much stronger buying power. When the website published a deal, it reserves, but does not purchase, a number of the items offered, for example handbags. Once the deal on the website is over, only then will Sukar.com place the order with the supplier.
To ensure customer satisfaction, Sukar tries to address any issues that arise as fast as possible.
The cycle from order to delivery of goods to the customer takes approximately three weeks and Sukar.com guarantees delivery in between four to six weeks.
"Sometimes things go wrong, for example Saudi Arabia. You send stuff to Saudi Arabia and then all of a sudden it is gone, you dig and you find it is somewhere in customs for some reason. The moment we find these things we actively contact our customers and give them the choice of a refund, a different product and that is what drives everything. I would say 99% of the time we do it before the customer realises it is a problem and in the instances where we don't pick it up, then you see complaints on the Sukar.com Facebook page," said Chbib.
To ensure customers who purchase goods on the site are not committing fraud and are real people, the company sends an SMS code to the buyer, which they must then enter online. Once the order is dispatched Sukar.com calls the customer directly and when it is about to be delivered, they call the customer again.
"We deliver several hundred packets per day, obviously there is a percentage of one or two percent, where things don't go right," said Chbib.
Sukar.com's turn around time between goods arriving at the warehouse from suppliers and them being dispatched is currently 24 hours.
Chbib sees much potential for the growth of online buying and shopping clubs in the Middle East, but says the Middle East is still a very young market.
"The online e-commerce business in the Middle East is very young; we cannot speak about true competition [for Sukar.com]. We are by far the largest shopping club in the Middle East in terms of memberships, buyers and revenues from what we can see," he said. "The interest in the online world is increasing. Three to four players are the right amount [of shopping clubs] for a country or region of the size of the Middle East. I am happy to welcome one to two more players in the region, this would help us to grow even faster," Chbib said.
In the future, Chbib says he hopes to decrease delivery times between items being ordered and delivered and will be opening more offices across the Middle East to be closer to the customer. He is also developing a way of tailoring the emails sent to members to their specific needs and wants.
"When you get the email about our deals I will make sure you get the details that you like, so I will give you the opportunity to tell me the things you like and my sourcing team will go out and get the things you want," said Chbib.
Sukar.com currently accepts payment in credit cards and cash and will shortly set up payment by PayPal.