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Social Commerce: A third wish for Aladdin Group’s flailing e-commerce aspirations?

In the popular children’s tale, Aladdin is a homeless boy in a mythical Middle Eastern kingdom who stumbles upon a…

By Staff , in Ecommerce Marketing , at June 13, 2021

In the popular children’s tale, Aladdin is a homeless boy in a mythical Middle Eastern kingdom who stumbles upon a magical lamp in which resides a powerful genie who will grant him wishes. In the original tale, Aladdin has an unlimited number of wishes, though in the Disney version, he only has three.

The Aladdin Group then, looks to have received its third wish just a few weeks ago, in the form of a third rebrand and relaunch of its much-touted halal commerce platform, now dubbed Aladdin1. After two false starts over the last few years, it will no doubt be hoping that the third time’s the charm.

In early May, the company relaunched itself as a halal “social commerce” company, offering consumers “premium and quality, halal-focused, authentic and lifestyle products and services”, according to a press statement. 

This time around, the company elected to be highly selective in onboarding merchants, choosing to do so on an invitation-only basis, ostensibly to ensure that products listed on the platform are truly halal and trustworthy. 

But why the move away from its original e-commerce proposition to now becoming a social commerce company? Also, what is the difference, if any? 

At a fundamental level, social commerce refers to conducting financial transactions for products and services via social media platforms. It is certainly a big growth area for businesses such as Facebook, with the social media giant having made overt moves into the payments and e-commerce space in the last few years. 

But this is not how Aladdin1 operates. It has a dedicated e-commerce platform, on which it lists various merchants and their stock-keeping units (SKUs).

The company has also taken to signing on a number of local celebrities with strong social media followings, not as contracted spokespeople or to run sponsored campaigns on its social media, but rather, as shareholders in the business. 

The style may have changed over the last few years but the substance is still recognisable. In fact, but for a few details, Aladdin1 does not appear to be all that different from other e-commerce businesses on the market.

But founder Datuk Seri Desmond To and executive director Raymond Woo beg to differ. In an interview with Digital Edge, they insist Aladdin1 is a social commerce company. “We call ourselves a social commerce company because according to our interpretation, while we are an electronic-commerce platform, we substantially leverage the power of social media to raise awareness of Aladdin1. This is why we are a social commerce company,” says Woo. 

“The celebrities we have engaged are not being paid to [promote the company]. Rather, we’re looking out for more entrepreneurial-minded celebrities we can sign on as shareholders. That way, they have ‘skin in the game’, and a long-term financial incentive to shout about Aladdin1 to their millions of followers,” To adds. 

To believes he has a mutually beneficial proposition for the celebrities that end up signing on as shareholders. Not only do they now have an interest in the company’s success as shareholders, they also stand to drastically improve the revenues of any of their existing business ventures, which can then be listed on Aladdin1. 

Using Wawa Cosmetics as an example, To is confident his company can add significant revenue to the cosmetics brand, which was founded by local celebrity Wawa Zainal and her husband, Aeril Zafrel.

“Wawa Cosmetics has built a cosmetics brand by leveraging Wawa Zainal’s social media following, which is in the millions. Given that she has built this reach with the cosmetics brand, we believe we can add more products for them to sell, which would naturally grow their revenue. For example, we could propose to them to sell various halal food and beverage products on the platform,” says To.

According to him, Wawa Zainal has signed on as a shareholder, and Wawa Cosmetics will hopefully enter the Aladdin1 merchant universe in the latter half of the year.

But why go down the route of issuing shares to celebrities, rather than paying them to run sponsored posts and marketing campaigns on their social media feeds? It is all about the money, Woo says. 

Aladdin1 is looking to keep its advertising and promotion (A&P) spend to a minimum and is instead looking to make a longer-term investment case to the celebrities it has reached out to. 

Given the company’s past experience, it is understandable why it isn’t keen on a massive financial outlay.

The first two wishes

The Aladdin Group commenced operations in 2016, just as the Malaysian e-commerce scene was hitting critical mass. The ecosystem was burgeoning, and Malaysia’s relatively young population and high levels of mobile penetration meant the country was ripe for an e-commerce explosion. 

So confident were the two co-founders of the group — To and Datuk Dr Sheikh Muszaphar Shukor — that it entered into a whopping RM32 million marketing deal with football club Manchester United in 2017 to raise awareness of its halal e-commerce aspirations.

On the surface, the Aladdin Group had all the ingredients to become a successful halal e-commerce platform back in 2018. The company seemed flush with cash, which it used to gain the global reach of the marketing behemoth that is Manchester United, and was serious about its ambition to create a global platform. 

But somewhere along the line, these plans fell through — a fact that To and Woo acknowledges. “The timing [of the Aladdin-Manchester United partnership] wasn’t quite right. Back then, in 2016 to 2017, a lot of people still preferred to just go to physical retail stores. But now, it’s a different story, because Covid-19 has forced almost everyone to use e-commerce to some degree,” To explains. 

“The execution [of the deal] did not yield the outcome we had all desired,” Woo adds.

And then, in the second half of 2020, it transpired that the company had hired a new CEO — one Eizaz Azhar, a former executive at Halal Development Corp Bhd. This appeared to be a second attempt at a launch, and came replete with a media campaign at the time.

However, Woo confirms with Digital Edge that Eizaz has since left the company. “Eizaz needed to settle things at his family businesses, which were affected by the pandemic,” he explains in a subsequent WhatsApp conversation.

With this third launch, the hope is that Aladdin1’s halal social commerce proposition will finally gain a firm foothold. While the company has long touted its global aspirations, it might first need to make a financial case for itself right here in Malaysia. 

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