While ShopGo is finding great success helping Jordan’s offline merchants make the leap to the world of online retail, the young company’s founder and CEO now has his sights on creating innovative e-commerce solutions for the rest of the developing world.
By Laith Abou-Ragheb
Photography by Alaa’ al-Sukhny
ShopGo’s headquarters in Amman’s sprawling King Hussein Business Park might not seem like much, but the small team toiling away in the startup’s modest basement offices is at the forefront of the region’s e-commerce evolution.
No less than 140 domestic and regional companies, including musical instrument retailer Feesheh and Virgin Megastore, have signed up for ShopGo’s services so far, which include help in setting up online payment systems, website design, and technical support.
Moe Ghashim, the 34-year-old Syrian who founded ShopGo through the Oasis 500 accelerator in March 2012, said he’s managed to tap into the growing interest in online retailing amongst offline businesses by offering them a one-stop-shop for all their e-commerce needs. “If they know how to do their business offline, we’ll take care of it online,” he explained.
ShopGo clients are typically “greenfielders” who only have a very basic online presence, explained Ghashim. “They might have a website, but it won’t be as dynamic as an e-commerce website. You have to think of it as a product, not as a page,” he said, adding that a client’s original website is often eventually jettisoned in favor of a new one, built and maintained by ShopGo’s in-house pool of designers, programmers, and support specialists.
ShopGo’s annual subscriptions start at just under $1,000 for companies wanting to sell up to 100 products online, rising gradually up to $9,000 for an unlimited number of products. ShopGo sales are now growing at around 30 to 40 percent year-on-year (by coleman) . “The interest is massive,” Ghashim said. “The region is pretty much underserved.”
The strong demand for ShopGo’s services has come as a huge relief for Ghashim, who took the risk of moving to Jordan shortly after the civil war in Syria forced him to close a similar e-commerce agency in Allepo with the loss of 15 workers. Ghashim described how regular electricity and Internet blackouts, coupled with sweeping sanctions against Syrian banks that blocked international financial transfers, made it all but impossible for him to carry on serving his clients, who were mainly based in the apparel sector in the United States.
“When the Internet began getting unstable, we started to come into the office at 5 a.m., thinking the Internet wouldn’t go down then. But the Internet might go down from 5 a.m. until 7a.m., and then the electricity might go down from 8 a.m. to 12 p.m., so we ended up staying in the office for 13 hours doing just one or two hours work. The team was literally sleeping in the office,” he said. “At this point it became obvious there was no way we could continue doing this…I had to make the decision to shut down my agency and let everyone go.”
After closing down his Syrian venture, he began looking around for other business opportunities in the region. He initially considered moving to Lebanon before finally opting for Jordan, due to its proximity to his home country and for the relatively low cost of setting up and running a business there compared to the Gulf. After all, his knowledge of e-commerce meant he could operate a business from pretty much anywhere in the world, just so long as there was a reliable Internet connection at hand.
Upon moving to Jordan, Ghashim set up ShopGo as an Oasis 500 company. Even though he had built up considerable business experience, he felt he could learn even more by joining the business accelerator. “I thought I understood the market and e-commerce. But I didn’t understand the complexity of the region in terms of how different the Levant is from the Gulf or from Egypt,” he said, adding that each country has its own specific laws regarding everything, from starting up a business to shipping procedures and fees.
Furthermore, Oasis 500’s strong links with Jordan’s business community proved invaluable for Ghashim, putting him in direct contact with Aramex and local banks, for example. “I was pretty impressed by them,” he said of Oasis 500, which is fast building a reputation as one of the go-to incubators for entrepreneurs across the region.
By the time he had passed through the Oasis 500 program, ShopGo had already signed up 12 clients. For Ghashim, this proved there was real demand for his e-commerce services amongst cost-conscious Jordanian SMEs looking for a more competitive price. “People wanted to go online. They couldn’t find any inexpensive service compared to agencies which charged $5,000 to $10,000 to kick off a project,” he said.
Eyes on the Gulf
At this point, Ghashim decided he would try to maintain the momentum ShopGo had built up by going for another round of funding. This would allow him to quickly branch into the Gulf, where demand for e-commerce is understandably growing faster than anywhere else in the region given the sky-high spending power of its consumers.
ShopGo’s bid for more funding proved successful, with Wamda and Silicon Valley’s 500 Startups coming onboard as investors. This boost allowed Ghashim to open an office in Dubai–a move which paved the way to even bigger business opportunities.
ShopGo’s presence in Dubai led to them teaming up with PayPal, Aramex, and Google to create EZStore in 2012, which offers fully-functional online stores for as little as $650. “You can set up your online store with ShopGo as your platform, Aramex for your shipping, PayPal for your payment, and Google for your advertising,” Ghashim said.
Even with the success of ShopGo and positive industry sentiment, there are still mountains to climb before the region catches up with the rest of the world in terms of e-commerce adoption.
How to move beyond cash on delivery (COD) remains a major challenge. The Wall Street Journal reported in May that credit card penetration in the region is only about 2 percent, as 82 percent of the population still doesn’t have bank accounts. And even though PayPal estimates that online spending in the Arab world will rise from $9 billion in 2012 to $15 billion next year, the global online payments firm has still only amassed 500,000 active customers in the region since its launch with great fanfare in late 2012.
Ghashim accepts that the take-up of e-commerce in the Middle East hasn’t been as fast as many had initially hoped. “You’re right, it’s sort of slow,” he said. Even though he said requests for online stores were up by around 300 percent in the UAE over the last year, existing online stores, banks and governments will need to work together more closely for e-commerce to really take off beyond the pockets of wealth in the Gulf.
“Online payments in the region are really, really complicated. It’s not plug and play like in the States or in Europe,” Ghashim said. “When the merchants come and see how complex it is, sometimes it turns them off.” The process of starting a business, setting up an online merchant account with a bank, then creating a payment account is still a laborious process that can take up to six months. “This is still too much. Once it becomes a 30-day window to do all this, you will see more people quitting jobs to create their own online stores,” he said. Ghashim also sees positive developments in Jordan, with Aramex signing deals with Investbank and Bank of Jordan to make it easier for their customers to make online purchases.
As for the future of ShopGo, Ghashim is in the process of setting up a London office that will focus on creating e-commerce products and services for the whole developing world. “My goal is to become a solution provider for emerging markets. I don’t see ShopGo being limited to the Middle East,” he said.
Part of this new direction involves collating information about COD sales. “COD is pretty much an unorganized and unstudied payment solution. I’m looking to aggregate the data and understand consumer behavior and patterns. Then based on that I’m going to try to move consumers from a risky payment option to a trusted payment option, with the ultimate aim within four or five years to stop people using COD in favor of credit cards,” he explained.
Furthermore, he’s working on a new product to help local shipping providers, such as SkyNet, which is based in the UAE, and NEDCO in Jordan, that don’t have strong online solutions. “We’re going to build a portal for them where they can offer their shipping services for store owners, in order to compete with the big shipping providers,” he said.
Ghashim has clearly come a long way from the time—just a few years ago—when he was forced to wind down the business in Syria that he worked so hard to set up. For him, the episode ultimately proved to be a learning experience, the lessons of which he plans to use to plot the future course of ShopGo and its big e-commerce ambitions. “Tough times can lead you in two directions: you either get depressed or you can turn it into positive energy and become more of a fighter,” he said.