Over the past five years, the online business community in Iran has exploded with different stores coming to market every month.
By 2015, the Internet industry radically transformed itself into the region's leading e-commerce sectors. With that in mind, Financial Tribune spoke with founders of Iran's web 2.0 experience.
Cousins Alireza and Saman Sadeqian, began their own startup,NetBarg.com, a local deals website back in 2011. Similar to Groupon, offers people special deals in a variety of different categories such as food, leisure, and beauty products.
Alireza originally came up with the idea while he was still studying in Columbia Business School, in New York, in 2010. While studying, he dissected the Groupon business model, looked how it could be utilized in an Iranian environment and began his plan to bring it to Iran.
On his return to Iran, Alireza gathered a group of friends, including his cousin Saman to devise a strategy, studying over 400 articles about Groupon and proceeded to kick-start his own business.
Que NetBarg.com, Iran’s first deal site, based itself on the US original in 2011.
Alireza said one thing that helped his company "pull away from the pack" was their offer of an iPad with the purchase of a deal, he said in 30 days we got 20,000 email addresses signed up in Tehran alone. Saman added that they received 40,000 entrants for the iPad competition nationally. He did his Masters dissertation at Royal Holloway University of London on group buying websites for local businesses. "This really helped our cause and route to market."
He went further saying, generally the Groupon-style website was adaptable to Iran with only minor alterations.
The duo said initially they had to break down the mental barrier held by many consumers with conducting online transactions.
“This was 2011 and online payments in Iran were still in their very early stages.”
Saman said "trust was difficult at first, but it was interesting for us how quickly people were able to trust our brand."
Prior to their deals site, the cousins sold Persian rugs online with limited success. As they say what changed the general feeling among the buyers was they could pay bills online, something that was not available from their first online rug store in 2004.
About statistics, the team said mobile is now playing a much larger role with 65% logging on from Android and 35% from iOS. Android downloads now make 90% of Netbarg.com views on mobile.
Saman noted that the 10% that download the iOS app are more active on the platform and spend higher sums of money.
The most popular thing the website has ever offered was a charity effort in support of the Azarbaijan earthquake in 2013.
"We sold over 18,000 tickets in support of the charity dealing with that particular disaster," Saman noted.
Post Sanctions
The next key issue for the duo was the potential lifting of sanctions on the Iranian economy, and the prospect of sites like Groupon moving into the local market.
Alireza remarked that since they started, there were over 150 local group buying websites running in Iran, adding that only three others have remained in the market.
"I do not see a serious threat to my business [from foreign competition], if they want to negotiate a merger, then we are open to business."
NetBarg.com’s closest local competition is Takhfifan, another Persian-language deal site. “Takhfifan is three to four times smaller than our business, and we’ve managed to hold our lead"
Future Plans
The cousins plan to offer further bulk offers to larger companies. Alireza mentioned that this new method of attracting business has worked well, with corporate take-up increasing, albeit gradually.
Saman said the future holds many interesting challenges for the company, as people become more familiar with the deals platform. The cousins beleive they will have to keep their prices and deals interesting.
At the end our interview, the cousins said they are no longer a startup; employing more than 120 people, they have now switched into a fully corporate model even employing an HR manager to deal with their daily issues.
Saman noted that being a startup was a great experience, where one does all the work themselves. However in recent years, they have had to change their own mentality and working practice.
"We have some key area[s] where we try to retain our startup agility, but as our strategy is based around growth it is challenging to continue to act in that manner. It will take time to be the leader online,” Saman added.
