Bahar Street in central Tehran has for the better part of half a century been the home of juvenile accessories industry in Tehran. The street has developed such a cult status amongst generations of Tehranis that "Bahar Street" has become synonymous with buying children's items.
However, one recent entrant to the competitive kids retailing industry is Koodakoo.com and they're working to change the streets' historical pole position. Koodakoo.com was created by Faty Amir-Soleimani, Melody and Ladan Golshani two years ago
Amir-Soleimani, a Columbia MBA and ex Morgan Stanley banker, returned to Iran after living and working abroad. She explained that when she returned home she struggled to find a diaper bin and that inspired her into creating a site for mothers and children.
Ladan and Melody, who both studied in England before returning, said that children's e-tailers are a needed service. The all-female business has – in terms of strategy – separated itself from their main high street rival, by focusing on a motherly service amongst its customers and offering quality at the right price.
Amir-Soleimani mentioned, “Women are very emotional and need nurturing,” as women we understand that and are well positioned to cater to it.
Advantages
It also seems that Koodakoo have also done their homework when it comes to market research. "We asked the ladies what the size of the juvenile-products market is," Amir-Soleimani said. "It is roughly $1 billion with their target demographic being the middle to upper classes."
When asked what the major challenges were in the market, the trio responded by saying the major issue was the marketing and distribution logistics.
Ladan responded, "We did a lot of surveys about the market to understand the needs of our target market and put together a product mix and services that is catered to their needs"
Amir-Soleimani said the challenge in the online retailing industry was that they had to be selective about the brands they listed and to build trust among their potential consumer base.
In addition Amir-Soleimani mentioned that when they started out their business two years ago, they struggled with people trusting the online sales environment. "Digikala was the first online brand to build consumers' trust and now the industry has benefited from this good business practice methods."
Counterfeiting
Amir Soleimani mentioned that quality was another important factor in the children's toy sector, with some companies selling unsuitable toys with bad quality, adding “No one wanted to buy cheap products.”
The juvenile products industry in Iran over the last 20 years has been flooded with cheap fake local and Chinese versions of international brands, most notably the Italian brand of Chicco. When we asked about the fakes to the trio, they responded that their suppliers are all validated as official distributors, and that they tend not to rely on one sole supplier. Ladan responded with, "Once you know the difference between the real and the varying fakes of Chicco, you can easily spot them."
Competition & Challenges
We're not the only people in the market for some of our products, Amir-Soliemani responded. "Ninilazen started roughly at the same time as our company, however they are more of a mom and pop shop whereas we are focusing on scaling the business"
The trio went on to say that one of the major challenges in the local industry is to understand and monitor the metrics driving an e-commerce business, "being able to manage your costs and inventory is a key success factor, as it is a pretty analytical and cash flow driven business." They added, "Iran, unlike Europe and the US, and has more important local challenges." One of the main differences the group agreed with was how to attract new customers due to a lack of services like Google Adwords or limited social network access.
Melody said, "In Europe you can find the target market everywhere. In Iran our target market isn’t reading newspapers and people often don’t even check their emails." Our next question for the ladies was their mobile strategy. "Mobile is huge in Iran. Instagram and Viber are widely used." They added this method was particularly useful for their target market as many mothers own smart phones and will already be using the mobile messaging systems. Our final question to the company was what they expected the market to be like in five years. "In five years, the market will be much more competitive. Moreover If sanctions are removed, we expect large foreign retailers like Toys R' Us or large marketplaces like Amazon to enter the Iranian market so you need to scale now or die!" When ending our interview, Amir-Soleimani added, "Entrepreneurship is not simply about having a good idea, it is about the execution. You cannot be scared about sharing your ideas and our all women team-spirited entrepreneurial environment actually encourages that! "
