Urban.lk: A promise in the making in Lankan eCommerce?

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The internet gave birth to a great many things. Out of these, eCommerce has grown to be one of the biggest global industries, with sales forecasted to be worth over $4 trillion by 2020. The likes of Amazon and Alibaba continue to make international news regularly. Even in Sri Lanka, eCommerce is a growing market. In 2018, forecasts expected to hit $400 million by 2022. Among the few key players in the local market is Urban.lk. The company believes that there’s a lot of room for improvement in the existing market and they believe they can fill this gap.

Hey, we need quality products and good customer service

In 2015, Malinda Muthumuni and Kalana Muthumuni decided it was time to launch an eCommerce platform. However, the market is a crowded one here in Sri Lanka with a niche audience. But Kalana and Malinda believe there’s a lot to be done in the space. Particularly with regards to providing quality products and proper customer service. “It’s basically to give the people what they should have gotten in the first place,” says Malinda. Thereby, the idea for Urban.lk became a reality by 2016.

The initial phase saw the duo bootstrapping the platform themselves for well over a year. Following which a few friends invested in the business. Nevertheless Urban.lk had its fair share of success early on. Urban.lk managed to earn LKR 2 million in revenue during the fourth month alone. But as the platform started growing, they needed bigger investments to scale their operations.

urban.lk founders
Co-founders of Urban.lk, Director of Operations Kalana Muthumuni (left) and CEO Malinda Muthumuni (right )

Early 2019, they entered the John Keells X program. Here, the company emerged as one of the finalists to enter the accelerator. With the much-needed corporate backing and mentorship, the company is now set to kick off its expansion. Primarily, this investment is focused on improving logistics and developing a strong platform back-end. Two things are crucial when looking at scale.   

Addressing the local eCommerce hurdles

Although eCommerce has been gaining traction over the recent years, the local industry poses several challenges. From logistics to lack of customer care, most of these challenges continue to stifle the eCommerce market in Sri Lanka. Each player has their own way of dealing with these issues. So how is Urban.lk addressing them? 

Logistics

Logistics is one of the biggest challenges for eCommerce in Sri Lanka. Getting it right could go a long way for such a platform’s sustainability. Speaking to ReadMe, Kalana and Malinda stated that this is a key area that they’ve set their eyes on. At the time of writing, Urban.lk provides island-wide delivery with a same-day delivery policy within Colombo for some products thanks to their delivery fleet. Elsewhere, courier partners handle the task for them.

Urban.lk: A promise in the making in Lankan eCommerce? 1
Logistics remain a key challenge for most players in the eCommerce market

Speaking to ReadMe, Kalana mentions how the quality of the courier service is vital to the platform. Malinda notes that “We are careful about having the right courier partner to handle deliveries. We’ve already stopped operations with a few because of the poor-quality service”. The duo iterates a strict code of conduct when it comes to company logistics and remains confident about the current capacity. 

Sourcing quality products

But customer satisfaction starts at the beginning of the supply chain, long before delivery. Malinda, stresses that this is something Urban.lk is adamant about. The process starts with sourcing the products. Currently, Urban.lk hosts products directly from the manufacturers or manufacturer licensed resellers. Secondly, comes the quality checks for the products. 

This is where the company continuously verifies the quality and condition of the products on sale. Every product undergoes quality checks prior to dispatch. Each customer care member is trained to perform these quality checks.

But quality assurance isn’t limited to quality checks. This would also refer to getting customer feedback and taking necessary action. For example, if a customer has trouble setting up a Philips Hue Light system, a team member could offer a walkthrough of the product. In another instance, if a customer is worried about the durability of a pair of Marshall Headphones, the team would look to address these concerns personally.

urban.lk founders
3 years in, the startup is looking to set itself high in the eCommerce game

Even after a fulfilled purchase, the platform follows a money-back guarantee return policy. So, in case you’re unhappy with your product, you could always return the product and get your money back. Provided the product packaging is retained in its original state.

Urban.lk’s catalogue includes several premium products ranging from JBL waterproof speakers, Vinyl players, to Burberry perfumes. But there’s always the chance that you might not find what you’re looking for. This is where Urban.lk’s “request a product” feature comes in handy. If you say, are looking for a Devialet Phantom Gold, you can request for the product on the platform. Urban will search for the requested product and will offer a quoted price. If you’re happy with the quote, Urban.lk can bring the product down for you within 6 working days with the warranty.

Acting on customer feedback

As far as customer satisfaction goes, Urban.lk takes reviews and feedback very seriously. The company is keen on maintaining a 4.9 average out of a 5.0 rating score. The aim is to ensure customer satisfaction no matter the cost.  This could be in the form of addressing a customer complaint or a simple inquiry. So, from the 1 to 10 rating scale, any rating that falls 8 or below constitutes a personal call from Urban.lk to inquire where the platform has fallen behind.

In terms of feedback, Urban.lk gathers customer data at two points. One is immediately following a purchase. The other is in the form of customer feedback following the delivery. The idea is to gather data to improve the existing service.

For convenience and transparency

Transparency is another area Urban.lk feels other platforms currently lack. For example, if a package is likely to be delayed, it should be the platform’s responsibility to inform the customer beforehand. Yes, delayed deliveries are problematic on their own. But Urban.lk believes that most of these delivery related customer complaints are a result of the lack of transparency. That’s one of the things that Urban.lk looks at with live tracking. If there is any sort of complication or a mishap from the logistics side, Urban.lk would inform the customer accordingly.

Urban.lk: A promise in the making in Lankan eCommerce? 2
Urban.lk is one of the few platforms that sell Vinyl Players in Sri Lanka

Convenience is also a consideration for the company. Of course, that’s one of the selling points for any online platform. Urban.lk wants to take this a bit further. For example, if you have a pending warranty claim, you don’t need to visit an office physically. Repairs or replacements under warranty claims are streamlined such that you don’t need to do anything. 

What this means is that urban.lk will pick up your product, repair/replace it and deliver it back right to your doorstep free of charge. The average downtime is usually 2 weeks. But the exact delivery times will vary with each product. Nevertheless, if a product isn’t fixed during one month the customer will be eligible for a replacement. It’s nothing revolutionary. Yet, it’s something that you don’t see often with other eCommerce platforms in Sri Lanka.   

Room for improvement

In terms of things that could help the market grow, Urban.lk believes there’s still room for improvement in the banking sector. They cited their issues with obtaining the IPG back when Urban.lk kicked off. “Basically, banks were asking one million in deposit just to provide an IPG”, says Kalana. But the duo iterated that the overall system has improved since then.

You don’t always come with a lot of money to do a startup. So, there should be facilities that allow entrepreneurs to easily bootstrap their company and just start

Malinda Muthumuni

Even aspects such as online banking can improve to encourage better adoption. The duo views that improving UX matters like providing interfaces in trilingual format could be a good starting point. This is to encourage better numbers for online transactions. 

Malinda also notes that the credit card issuance process should be better in Sri Lanka. Right now, credit cards are provided to consumers that meet specific criteria. These criteria should be expanded to incentivize more people to use credit cards. Malinda believes that this would help the market expand further.

Then there’s also the issue of improper tax classifications that limit online platforms from offering products at a better rate. For example, Malinda notes that virtual assistants like Google Home and Amazon Alexa get classified as Bluetooth speakers. As a result, those products get taxed at as high as at an effective rate of 45% 33%. Ideally, these devices should be classified as computer processors or smart devices, which come under a lower tax rate. “We’re currently in the FITIS executive committee and we’re trying to bring up these issues with the government. We want to make sure products are taxed properly so that we can give a better price for the consumer”, mentions Kalana.

Urban.lk: A promise in the making in Lankan eCommerce? 3
The DJI Robomaster is an educational product. Yet it’s classified as a toy and is priced at a higher tax rate

Looking at a bright future

According to Kalana and Malinda, consumers now trust online platforms more than they used to. Yet the trust factor remains to be improved. Even today, some customers prefer making the purchase online, but physically pick up the product. Therefore Urban.lk set up a physical store in 2018. A physical location would help enhance that trust and reliability aspect, at least in the platform’s context.  

So, where does Urban.lk see itself and the overall eCommerce market in the future? Kalana and Malinda are optimistic about what’s to come. Urban.lk will continue to rely on 3 focus areas, all products should be original and of high quality, good customer care should be maintained, and should be delivered on time.

With regard to the market, the duo remains confident that the industry will grow and get better over time. To Urban.lk, part of that involves fixing logistics and better standards for customer service. But in a larger context, it means setting up Sri Lanka as a hub for eCommerce in the South Asian region. Optimistic? Yes. Time will tell if that optimism will pay off. Fingers crossed.


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