Online shopping as a business model seems to be finding validation in Pakistan, especially in Karachi and Lahore.
Lootmaar claims to be an “Ebay for Pakistan”, allowing auctions between buyers and sellers over everyday items. Their claim to fame is that they will be adding a layer of security to ensure that buyers and sellers are reliable.
One of the founders of Lootmaar is Adnan Haider whose previous venture was imaGyn, a non-profit medical device company he co-founded in the US. The founders of imaGyn were featured in BusinessWeek, Yahoo News, US National Public Radio, and all major Pakistani newspapers. Prior to this, he actually admits to being a technical specialist at IBM. He has a degree in engineering management from Duke.
The co-founder of Lootmaar is Noman Turab, another graduate of Szabist who then ventured out to Middlesex for further education. Other members of the team that conceptualized Lootmaar include Majid Shaikh (also an IBM-er) and Adeel Tufail who specializes in alternative distribution and electronic payments.
You can check out the beta yourself at http://beta.lootmaar.com, although I dont think they are accepting a lot of sellers right now. You can also read Adnan’s thoughts on entrepreneurship here.
For my analysis (beta review? Preview?) of lootmaar, hit the link (trying to keep the front-page shorter).
To be honest, when I first landed on the front-page I was a bit confused. Although there are auctions currently going on in the beta website, it seems like they are also selling items from a virtual storefront, much like Shophive or Belicity (see the picture). I think they need to keep their auction focus and put that up front and center and take out the “its Masty, its Fun” type of things — it might be tempting to think that this is what the visitors need to see but…. I dont think its suitable for an Auction site.
From features, I thought the “Ask a seller” is the most relevant because the question and answers are all written there in a flow. This lets people get a better subjective feeling about a particular seller.
From the business side of things, I think the biggest underestimated challenge Lootmaar will face is to get the right people to start bidding. There are two types of problems here — first are people who could refuse to play with the rules — e.g. set the same “buy now” price for a used item as a new item.
You could argue that free market dynamics will eventually sort these things out to where the market decides the price point through discussion (see here for an example), but remember free market rules only start with a large number of players where buyers can put some influence on sellers.
The challenge with a small userbase is that if there are only 5-6 sellers for an item there is a good chance that they can simply agree on setting a specific price. Or indirectly, if there are only 4-5 suppliers of used parts in the retail markets, there is a chance that a seller on lootmaar sets a price very similar to the retail price for something. That doesn’t make the seller “evil” necessarily but the price would still be fixed by retail distributors.
The second type of problem is something I’ve mentioned before — models like Ebay start to take off when (1) the average set of people feel that it is OK to buy used goods — something that may or may not be ‘accepted norm’ in culture throughout the userbase, and (2) enougth of the average set of people with the money to buy these items are online long enough to trade average goods.
The simple solution is the argument that “eventually there will be enough tech-savvy young couples that they would prefer this model a lot more over the traditional model — when that happens, it doesn’t matter if the older generations dont ‘get it’ “. Nonetheless, though, it would be interesting to see how these behavioral models work out over time.
For now though, I think Lootmaar’s going to find most of its users in the used-computer-electronics market. Like I said, I’m looking for some RAM for my laptop, and Jehan Ara seems to be looking to sell some.