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Q&A with GlamBox co-founder
Kippreport speaks to Shant Oknaya, former Google employee and managing director of the company.
October 10, 2013 12:13 by Muhammad Aldalou
When it comes to the e-commerce sector in this region, is $1.36m a large investment to receive?
Yes, certainly in this part of the world. I mean you have companies, such as Souq.com, MarkaVIP or Namshi, which have secured millions of dollars from global venture capitalists and international powerhouses. But what we’re seeing now is a new wave of local start-ups that are funded by regional investors, particularly over the past 12 to 18 months.
Regional VCs have always been risk-averse when it comes to investing in start-ups, so, by local standards, it is a pretty big investment and I believe we’re going to see more of them.
Why did you choose the UAE as the first market?
Well, we were based here to begin with, but the UAE market is the most regionally savvy and one of the largest in the GCC region. I think it’s also quite advanced in terms of credit card penetration and customers feeling comfortable about purchasing online. Also, setting up a business here is a lot easier than some of the other neighbouring countries.
What limitations does the UAE have for your company and e-commerce, in general?
For our business, in particular, there may be a supply constraint at some stage, given the fact that it’s a smaller market and brands allocate fewer products, when compared with Saudi Arabia, for instance. From a general e-commerce perspective, I think one of the challenges – which isn’t necessarily bad and I believe the market will eventually correct itself – is that there are a lot of e-commerce companies coming up. There’s a lot of noise in the market and consumers are spoilt for choice. It’s unclear who’s going to win and stick around.
What’s it like working with a subscription-based model?
Obviously, the ‘peace of mind’ aspect is that we receive guaranteed revenue over a period of several months. Also, logistically speaking, we do batch deliveries as opposed to having to keep up with multiple deliveries or transactions every day. You need a strong logistics partner to make sure that thousands of boxes are sent within a period of a few days.
One of the challenges is attracting customers to subscribe, particularly since they have no idea what they’re receiving in their monthly packages, so some might be reluctant to commit.
Have you secured any customer interest from Saudi Arabia?
We’ve actually launched softly in Saudi Arabia already and have a few customers who are receiving boxes. There is a waiting list and we’re now actively looking to have a local set-up there, which we will follow with a campaign to attract subscribers.
Do you publicly reveal the number of subscribers you have?
No, but I’ll just say that we send out a couple of thousand boxes per month.
Will the company only cater to women or expand to other verticals?
Nothing concrete at this stage, but we’ve seen similar business models expand into other verticals quite successfully. There are many verticals that can be interesting for a subscription-based business – most typically a beauty or ‘groom’ box for men.
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