DealCart: social commerce in Pakistan

This interview was conducted and edited by Timothy Motte. 

Biography:

Ammar Naveed is the co-founder and CEO of DealCart.

DealCart is a startup transforming how Pakistan’s middle-income households shop by offering high-quality, low-priced everyday essentials through an online platform designed for first-time internet users. DealCart is heavily influenced by the Chinese Pinduoduo model.

To date, DealCart has raised over $7M in funding and is one of the highest-rated shopping apps in Pakistan. Before DealCart, Ammar worked at Careem for over six years. Careem was acquired by Uber in 2020 for over $3B.

Why did you start DealCart?

When Haider, my co-founder, and I began discussing ideas for a company, we approached the conversation around three pillars:

1. Pursuing something that could create a meaningful, tangible impact on society.
2. Tackling a problem with a large addressable market, ensuring long-term scalability.
3. Building in a domain where we had the experience and skills to effectively execute.

In Pakistan, average households spend 30-50% of their income on groceries. In contrast, around 3-4% is spent on education and health. Pakistanis spend too much money buying basic necessities, due to rampant inflation and supply-chain inefficiencies that jack up prices. As a result, they aren't able to invest enough in their education and health. Saving them 10% on their grocery bills could help them double those key life investments. 

If we could offer a cheaper and more convenient grocery buying experience, we’d also have that large market we were searching for: 250m people and the corresponding growth in digital retail spending. We identified which parts of the supply-chain we could circumvent, guaranteeing lower prices. 

We considered another tailwind: Pakistan’s rapid digitalization. Pakistanis are increasingly using their smartphone, initially for social media, then for online purchasing. We are well-positioned, as the online buying behavior wave is cresting but e-commerce penetration remains low. Players such as Daraz (backed by Alibaba) exist but don’t have the best reputation for reliability. 

We saw a gap to build something better.

What did DealCart’s MVP look like?

We went to our local Metro (a supermarket chain) and bought a bunch of groceries. We then posted up in Haider’s basement and created WhatsApp groups, where we told people they could get these groceries for cheaper if they bought as a group. We then dispatched the groceries ourselves.

In parallel, we started building basic tech infrastructure to move off of WhatsApp. We raised VC money a couple of months into the experiment, off the back of promising traction.

What unfair advantages did Careem equip you with?

A mindset for scale. The concept of hyper-growth tech startups is still new in Pakistan. For many, the gold standard of business is a slow and steady one. Few people in Pakistan have operationally experienced a blitzscaling endeavor such as Careem. 

My Careem days taught me how to execute on that ambition and get comfortable with chaos. Inevitably, growing a company at an ungodly growth rate is bound to break some things. Not many are at ease with that state of mind. 

I also learned a lot about the price sensitivity in developing markets. For example, Pakistan/Egypt aren't the UAE/KSA, where higher purchasing power meant higher margins, allowing for a splurge on OPEX. Successfully operating in these countries implied frugality, thinning your cost structure enough to offer competitive prices without digging the company into a financial hole.

Most importantly, I witnessed the importance of having a vision that creates impact at scale. A clear vision motivates you and your team to push harder through challenges by reminding you of the greater purpose behind your efforts. 

When I read customer reviews sharing how saving 5-10% on their grocery bills made a difference in their lives, that sense of purpose is reaffirmed. 

How is DealCart different from Pakistan’s other e-commerce players, such as Daraz which you mentioned?