Is a storm brewing in Daraz Nepal? Company unable to retain talents

While still a budding economy, Nepal has made huge strides in internet technologies. This has given rise to ecommerce platforms like Daraz. While Daraz is not the only online shopping platform in Nepal, the brand has become somewhat synonymous with online shopping. It might seem all hunky-dory for now, however, if we closely look at the internal chaos Daraz is going through, it seems like the brand is going through the process of internal implosion.

Chaos within the leadership

Daraz undertook a major decision to bring in native leadership last year. However, nativizing has had a counter-intuitive result. With a native leadership at the helm, mid-level employers have been quitting the brand in droves. Just to name a few, Chief Commercial Officer, Chief Marketing officer and multiple mid to low level employees quit Daraz within the last year alone. BrandGuff has time and again insisted on the need to equally prioritize internal branding. Allegedly, the work culture at Daraz post-leadership change has been chaotic to say the least. Therefore, the brand has had a difficult time retaining their human resource talent.

Inability to hire new talents

There is a reason why internal branding is imperative to a brand from marketing perspective. The inability of Daraz to retain its core talents has had a spill-over effect. The brand is struggling to fill its vacancies. For example, the vacancy of brand manager has been open for quite a while now. One of the industry veterans, who has worked with other successful brands, under the condition of anonymity, spoke to us saying that he/she rejected the position taking into consideration the fact that Daraz is facing bigtime internal chaos. Since Daraz’s dirty laundry has been out within the corporate sector at least for quite some time, it seems like new talents avoid the company.

Adverse effect on external branding due to internal branding chaos

Daraz used to come up with some of the best marketing strategies and advertisements. Just have a look at the 11.11 TVC ads from the 2021 sales event.

The ad had become so ubiquitous that the event was deemed to be highly successful. However, this year’s 11.11 sales event was dull to say the least. The fact that Daraz is facing a mass exodus has surely hampered its marketing ability. Now, let us have a look at this year’s 11.11 ad.

Compared to last year’s ad, this year’s ad was a disaster. The ad does not have a coherent brand message ( much of the ad focuses on misogynistic tropes i.e. a girl is allowed to go on an outing in-spite of the conservative trends only because of the 11.11 sales event). While we cannot blame this lazy ad simply on the internal branding failure of Daraz, the fact that its core talents, who were responsible for handling creative ads like the one in 2021, seems to hint that Daraz is definitely facing serious HR crisis.

The need for revamping Daraz’s internal branding

As of now, Daraz still remains Nepalese customers’ top go-to online shopping platform. However, if Daraz does not get its house in order soon, it would be foolish to expect the brand to retain its top position in the future.

If you have successfully branded your brand to your employees, they will have a common vision, which makes cross-cooperation smooth and efficient. The more you are willing to invest in internal branding, the more your team will be able to collaborate. Moreover, as you go about team building with a simple coherent message, your brand will be more adept at managing internal employee conflicts. Ergo, a brand will be much more successful in retaining its HR talents. Remember, if the house is not in order, it will spill over to your customers, and that is precisely what is happening right now.

For more on the importance of internal branding, read our article here!

Summing up

While there are few from Daraz, who have argued on social media that it is simply a rumor, we actually prepared this report by conducting interviews with multiple ex-employees. As is routine journalistic standard, and due to the request of ex-employees, we are keeping our sources confidential. What we found a bit funny is the overreaction that some at Daraz’s leadership have resorted to. There is a famous Nepali saying ‘ hawa nalagi paat hallina’. So, instead of focusing their energy on trying to question our ethos, by labelling our exhaustive report as a ‘rumor’, we suggest that the company do some soul searching and mitigate the internal branding crisis that it is facing.

BrandGuff operates with a vision to foster brands and businesses in Nepal. So, the purpose of our report is not to pull the brand down. Rather, as we heard from multiple ex-employees, we hope that Daraz returns back to its former glory.

While we agree that there might be multi-faceted reasons for Daraz’s lethargy in its branding and marketing failure, our sources tell us that the native leadership adoption strategy of Daraz has led to chaos within the company. This might not be all Daraz’s fault. As a multinational brand, some sources told us that the work culture is a bit harsh compared to other job places in Nepal. As BrandGuff’s team have multiple employees, who have returned from abroad, we can understand that employees might be getting a big culture shock with the work ethos at Daraz. For this, we recommend that Daraz focus on nativizing its work culture, instead of just trying to nativize leadership. While old talents who have contributed a lot to build Daraz as a household brand today have left, the company is seemingly struggling to fill its talent pool. Like a clockwork, we keep saying that brands need to focus equally on internal branding. However, as displayed by the storm that is brewing within Daraz, and the fact that this is slowly spilling over to the public, media and consumers, we are reminded of a popular saying ‘Bhai fute, gawar lute’!