In October 2015, CDC made a €20 million equity investment in Daraz, alongside a €30 million investment from its existing majority shareholder, Asia Internet Holdings.
The investment formed part of our thesis that in frontier markets the formal retail and trading infrastructure will be built online first, potentially ‘leapfrogging’ the need to build large-scale bricks and mortar retail sectors.
In April 2018, the business was sold to Alibaba Group, China’s largest ecommerce conglomerate, marking CDC’s third equity investment exit.
Ecommerce platforms provide opportunities for small traders and sellers to find routes to markets and customers that they would otherwise be unable to reach. Ecommerce companies also play a part in improving the efficiency of local trading infrastructure and logistics networks.
Since our investment, the number of active small and medium-sized enterprises (SMEs) and merchants on the platform has grown by more than 13 times. Daraz has connected approximately 6,000 active vendors with over 1.3 million customers. The company has created thousands of new jobs in both those businesses and among the local supply chain.
Daraz established a programme that moves SMEs through a tiered selling system which progressively unlocks benefits, such as larger order numbers, if they comply with certain best practices, such as labour standards or corporate governance.
Our investment has enabled Daraz to make significant progress towards becoming the leading online business-to-consumer marketplace in the five countries in which it operates. In 2017, it more than doubled in size, delivering more than 2.1 million orders and attracting over 260 million site visits. The company is on track to more than double again in 2018.
Environmental and social aspects
We worked closely with Daraz to develop a Code of Business Conduct supported by a comprehensive suite of environmental and social, and health and safety policies in line with the Ethical Trading Initiative's Base Code and good international industry practice. The Code of Conduct has been embedded in company operations and Daraz is in the process of incorporating it within its supplier contracts. We believe the company is committed to continual improvements in environmental and social compliance after our exit.
Since 2012, we’ve only invested in Africa and South Asia. Investments outside these regions are from our pre-2012 portfolio.
- South Asia
We have seven priority sectors. However, we continue to invest outside these sectors, largely in the most challenging regions, as new investment supporting any sector helps to underpin the private sector, and create jobs and livelihoods for people.
- Other consumer services
- Investment type
We provide capital in three broad ways: direct equity, debt, and intermediated equity (principally through investment funds).
- Direct Equity
- Start date
For direct investments, this is the date CDC committed capital to the business or project.
For funds, this is the date that CDC committed capital to the fund.
For underlying fund investments, this is the date that the fund invested capital into the business.e
- September 2015
For direct investments, this is the total amount that CDC has committed to the business or project (it may be a combination of equity and debt).
For funds, this is the total amount that CDC has committed to the fund.
This is the investee company’s place of incorporation; or a fund’s jurisdiction.