E-commerce Startups 🇯🇴
فشّة غل دوت كوم
In 2021, I covered four startups:
Back then, I forecasted that POS Rocket would be the most successful amongst them, and my hunch was correct. It was acquired by 🇸🇦 Foodics in 2022. I wrote that Tamatem would need to up its creative game. And I also wrote that Jamalon and Mawdoo3 didn’t have great future prospects unless they drastically changed course.
Quick recap: Post-London Initiative 2019, Jamalon and Mawdoo3 both signed BIG figure deals.
Jamalon: $10 million in 2019. Today, Jamalon is bankrupt. And its CEO/founder got promoted to head Madfooatcom/efawateercom. If I were handed those $10 million back then, Jamalon would be the Waterstones/Barnes & Noble of the Middle East with sales over $1 billion today, not 0 (and millions in liabilities). I’m serious, >$1 billion.
Mawdoo3 : $10 million. Today: not much left. I remember a press conference where the founder was sitting with various ministers promising that by 2021, Mawdoo3 would employ thousands…
(Tip #1 to being a humble entrepreneur: don’t boast about things that will be done in the future. Build it quietly, then boast about it.)
ShopGO
One of the companies owned by Mawdoo3 is MakanE.
MakanE is a software as a service (SaaS) e-commerce builder. Anyone that wants to sell a physical or digital product can use MakanE to build their online store. They do not need to learn coding to build an online shop. It’s faster and more convenient. Just look at Jordan Post’s internally built stamp store that never works: https://eshop.jordanpost.com.jo
This seems like a promising business: every company has shifted to online sales post-pandemic. Consumer preferences have also shifted to online shopping: it’s a hassle-free experience. Customers have found a lot of ease when ordering online compared to buying from retail stores (where they have to drive in the traffic jam, find a parking spot without getting a ticket, etc.)
Is MakanE successful today?
Not according to data gathered by Storeleads:
Online stores using MakanE have boomed in 2021, peaking at 12,000 stores in 2022, only to crash afterwards reaching 2400 today (down 80% from peak). Its most famous store is still one built in 2021: almousali.com.
The target market for MakanE is the Gulf: ~40% of stores are based in Saudi Arabia and 8% in U.A.E. today. It’s the market with the highest growth potential and biggest spenders.
What went wrong? Why did MakanE crash like that? Why are clients switching from MakanE to other e-commerce platforms?
Bad Place
The competitive landscape for e-commerce builders is huge. Clients have the option between many foreign companies such Wix, Wordpress, Shopify. Arab Bank recently entered the game with their own simple website builder: Arabi Shopix (in collaboration with an Indian partner). And Jordan Exports has launched a new initiative to encourage exports via e-commerce: https://jordanexports.jo/project/zero2hero-ecommerce1/
In Saudi Arabia alone, MakanE is competing with Zid, a government initiative to help Saudi companies transition to digital commerce, and Salla, a company that recently raised $130 million in a pre-IPO round. Saudi Arabia is beating us to the punch despite Jordan having a head start. They even now have Saudi made yoga mats: in my opinion, a country becomes fully globalised when they get the 3 Y’s (Yoga, Yo-Yos, and Yakult)
For Jordan, there is clearly 1 winner: SHOPIFY.
Jordanian companies prefer to work with Shopify. Look at DNA.jo, timecenter.jo, mraytistore.com to give a few examples. Shipping company Naouri took the initiative to partner with Shopify to offer 3rd party distribution: https://www.naouri.com/3pl-warehousing-and-distribution
MakanE is losing market share for one simple reason: bad customer experience.
One only has to look at customer feedback on Google reviews, Facebook/twitter reviews. I also trust reviews from TrustPilot as they are one of the few platforms to verify authentic posts by customers: https://www.trustpilot.com/review/makane.com
(Tip #2 for humble entrepreneurs: do not buy fake engagement on social media nor fake reviews)
Critical Pressure
A recent book by Rainer Zitelmann, How Nations Escape Poverty, showed how Vietnam and Poland went from being one of the poorest nations to one of the fastest growing in the world.
So when people in Jordan are criticising the country, it’s not out of hate but out of disappointment. The real critics know that Jordan hasn’t achieved its full potential and that the country has so much more to offer. Yes there was a lot of great progress in the last 2 and a half decades (I mean, give me a name of a country where you can renew your car license and passport online and get it the next day), but everyone knows we could become the Singapore of the Middle East. We want a Mauritius miracle of our own. We just have a talent resource management problem: on one side you have uber-talented kids that are ignored and are looking for opportunities abroad, and on the other you have talentless individuals getting promoted…
So is MakanE’s failing, like other endeavours in Jordan, due to people’s harsh criticism of it and Schadenfreude 🧿? No, this time it was self-inflicted. We need to be very honest with ourselves and admit our own faults: a lot of these companies are losers, at best mediocre, with very little chance of competing internationally. Everyone, including myself, is still hoping that we see in Jordan a towering startup reach Unicorn status, with billions in revenue and hiring thousands of Jordanians. Unfortunately, Mawdoo3/MakanE failed to actualise this dream.
My free recommendation for MakanE and the group’s newly appointed deputy CEO, if it’s not too late:
-If you can’t fight Shopify, join them. Partner with them. Help new clients with on-boarding, web design and earn a fee//help, like Naouri, by creating specialised apps for Shopify, maybe something to do with cash collection// help Shopify POS clients that want to integrate with Fawtara’s API// etc.
-stop blaming foreign factors for failures. Lobby instead for better regulations that could benefit yourself and the ones around you. For e.g. lobby to help Jordanian e-commerce stores ship to the GCC tariff/custom free (look at what happened to Cash Basha and look at how Saudi is booming)
I repeat it for the nth time, as a redemption move: please IPO efawateercom on the Amman Stock Exchange and break the curse.
Final thoughts
There are none really. All this was just filler as per Substack’s stats, very few readers reach the end of these short posts. To those that have, here is the link to Game 2 (“Musical Notes”): https://interacty.me/projects/396995f707d9c44f
Bear in mind that the final link will work only to the first person to reach the finish line (all others who manage to crack the code are welcome to send a screenshot). Good luck!