How is E-commerce in Sri Lanka different? Learn from Reeza Zarook, Founder,

How is E-commerce in Sri Lanka different? Learn from Reeza Zarook, Founder,

Tuesday July 23, 2013,

10 min Read is a 25 months old e-commerce venture based out of Colombo. Just as the name suggests, they aim to be the online destination for everything under the sun. Currently, the site has done over 190,000 transactions and sells about 800 vouchers a day.

We had a very interesting conversation with Reeza Zarook, founder, where he shared some valuable insights about the Sri Lankan e-commerce industry with us. And there are some lessons for us to take away from e-commerce in Sri Lanka. Edited excerpts:

The Beginning

I was actually born in the UK, and lived there most my life. I was an investment banker in London for 14 years and then got fed up of it. I have been coming to Sri Lanka for holidays, as my parents stay here, and I loved the pace of life here. I thought if I found a job here that makes me happy, I would stick around, and have not gone back since. I moved to Sri Lanka in 1999. I also worked in Singapore for a few years. I also worked with the Sri Lankan Government for a bit, after which I consulted with a large Sri Lankan firm, but the work was mostly overseas. After that stint I started

One of our shareholders had said to me when I was consulting with him, that we should bring a Groupon like model to Sri Lanka, and he specifically asked me to go and check out Ensogo in Thailand. That is how I got connected to Ardent Capital via the three founders who set up Ensogo, and are partners there. I met them, raised some money to start the model in Sri Lanka. But, we quickly moved from being a Groupon/Snapdeal kind of site to being everything that is available under the gamut of eCommerce today. We today operate under multiple domains.

We have a ticketing site that handles all the large concerts that happen in Sri Lanka. We have a local travel business, which is expanding very rapidly through the course of this year. We sell books and have about 100,000 books online now. We do vegetables, directly from the farm to your house, six days a week. We have been able to go across the board in eCommerce in a very short span of time in Sri Lanka, that is the compensation for being in a very small country.

When we started, there was no eCommerce in this country. The closest that people did when they went online was to book cinema tickets, that was it. And I am very happy to say that we have been lucky to have been in a position to grow an entire industry online. Now there are about 20-30 eCommerce businesses in Sri Lanka. We have done about 190,000 transactions in two years and today we have 13 year olds to 70 year olds coming and shopping with us online.

Retail in Sri Lanka

The retail industry is very bad in Sri Lanka, there is no transparency, cost of logistics to get a product from Colombo to elsewhere is very expensive. The same product that sells at 1400 Sri Lankan Rupees in Colombo, will most likely sell at 2500 Sri Lankan Rupees in other parts of the country. But in our case we can sell the product 25% cheaper everywhere in the country at same price. We think of eCommerce as equitable commerce for Sri Lanka. We can start making a difference to people in the country, no matter where you are in the country you have the same opportunity as people who live in Colombo. We believe we have the potential to make a difference to the ordinary Sri Lankan.

Strategic Partnerships

Last year, we brought Dialog onboard which is the largest telecommunications provider of Sri Lanka. Last year, Dialog bought a 26% share in the company and it gives us great reach and credibility. We are now available in 140 different sites in Sri Lanka. We have access to a 1000 mobile reload retailers who work with Dialog and also act as sales agents for us. And that was a big factor for us to grow throughout the country.

Dialog’s advertising spends is close to 50 million dollars a year. Good example for you is, Dialog is the sponsor of the Sri Lankan cricket team and we are now selling tickets for the South Africa cricket series that starts next week – it should give us a lot of eyeballs. We could have never done that without partnership with Dialog.


We grew 200% since last year. We are doing about 800 vouchers per day. The average voucher that we sell is quite high, at 18 dollars right now. Which also tells you, that we have tapped into SEC A, B markets very well, but what we should do now is push into SEC C, D and below. It might bring our average voucher value down, but will increase the number of people transacting with us.

We have 120 people in our team today. We have pretty much broken all barriers to eCommerce in Sri Lanka, which was very similar to challenges faced in India like lack of credit cards, payments issues etc. But we were the first company to allow users to purchase vouchers through their mobile phones. Every product we sell, can be paid for using your Dialog mobile phone, and the amount will be deducted from your balance. This opened up a huge market for us. One third of our sales comes from someone using their mobile phone as a payment device.

India, Vietnam and a lot of other countries have to do Cash on Delivery because they didn’t have credit cards and none of them had an alternative mechanism like we did - which was mobile payments. We have been lucky, as one in every two people in Sri Lanka have Dialog connection.


The three founders of Ensogo are partners at Ardent Capital, when I told them that this model is something that can work in Sri Lanka, they were all excited. Between them we raised about 40% of our capital. Also Rebate Networks which owns similar sites in 26 countries, and the Chinese daily deal site lashou, came onboard. We only raised a small amount of about 350,000 USD, and are now worth over 10 million USD. It is not a very big number, but it is fantastic growth, and in Sri Lanka we are among the Top 50 brands in the country. With Dialog coming onboard, we are not looking for another round of funding in the near future.


The biggest challenge we had was payments and that is why we ended up with mobile. Earlier we had credibility issues as we were not backed by any well known local entities, so people were very skeptical. In the initial days, we allowed people to book a voucher online, but they could come to office and pay. It is possible to do this in Sri Lanka, because of the size, in India it would not be possible. Colombo is very small, you can go from one end of Colombo to the other, even in worst peak traffic, in an hour. You cannot do that in Mumbai or Delhi. We had customers initially, who are SEC A, who would go online with Amazon but not with us, so they would come and check on us as to whether we are real or not.The whole process of getting merchants online in the beginning was a pain. Now however we have merchants coming to us, because we simply have the largest reach. We have 210,000 Facebook fans, and 250,000 database of people whom we would send emails everyday. We still do a lot of traditional advertising both on radio and print, we don’t do much TV because we cannot afford it.

Overtime, we got into a different problem, we had a lot of customers walking in to get educated about the space. People would walk in and ask us a lot of questions. Soon we had to move out of our small office to an 8000 sq ft office, in which 4000 sq ft is dedicated only for customers. A third of our customers who walk in have never bought anything online before, and they are coming in to be educated. So we have the customer service team sitting with them for anywhere between 30 minutes to an hour, explaining to them what a website is, what it means to transact online, what is an email id etc - we are literally educating people about eCommerce. We have on an average 400 customers walking into our office everyday, and about 100 of whom are just coming in to be educated. My biggest challenge now is how to deal with all these people wanting to get into the next generation of purchasing.

Plans for Scale

We believe that the market in Sri Lanka is still nascent. We believe, soon there would 5-6 times the number of people who would be buying online here. The reason why I believe we are so successful here is because we are Sri Lankan and understand the market.

Going forward, there are at least two - three verticals that we have not tapped into yet. One is fashion, we want to be the premium fashion site in Sri Lanka - no one has touched it yet. But with a new partner joining us soon in two weeks, we will launch fashion category in a big way. We will probably launch two more categories by the end of the year, we will then see us have the entire gamut of online businesses under us.

Being a big fish in a small pond is very advantageous for us. I don't think there will be any sectors of eCommerce that we would not have touched by the end of the year.

Big audacious goal

Our competitors are the traditional retail chains in the country. We want consumers to think about us first before they go to physical stores. We want to be seen as a legitimate alternative to shopping for every Sri Lankan consumer.

Advice to young Sri Lankans

The world over internet is a wonderful leveler to get into business. Sri Lankan kids have responsibilities to their parents, we are not a western society. If you are the eldest child in the family, you are expected to start supporting the family. And I do not think it is a bad issue, if you look at the family bonds we have in Southeast Asia they are very strong, I am a great believer in those bonds, and you can’t ignore these bonds. You cannot just say I am going to leave everything and start a business and my parents have to figure out a way to pay bills - it just cannot work that way. Every year MIT runs entrepreneurial labs where they select 5-6 teams from the largest tech university here and help the teams design a mobile/web venture. What we have seen is that good ideas are not translated into businesses because parents have expectations from their sons/daughters. It is important that we figure out a way to encourage our kids into entrepreneurship while keeping in mind our societal values. So when you are launching something ensure to raise funding to sustain and support the family.

The next one is go out and talk to people. A lot of Sri Lankan entrepreneurs are very afraid of talking to people because they are afraid someone is going to steal their idea. So they launch something in a cocoon and later realize that it is so fundamentally flawed. It is important to talk to people from Day 1. I am personally now taking out time to mentor younger entrepreneurs in Lanka.

More details about the venture here

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