A Deal That Made Nepal Feel Like It Had Arrived
In May 2018, Alibaba, the company behind Alipay and the world’s biggest single-day shopping event, acquired 100% of Daraz Group, the online marketplace already running in Nepal. This wasn’t a regional player throwing its weight around. It was one of the largest e-commerce companies on earth buying its way into a five-country South Asian market of over 460 million people, and Nepal was part of the deal.
The headlines were international. But inside Nepal, the excitement went deeper than the news cycle. Nepali entrepreneurs read the acquisition as a signal: if Daraz now had access to Alibaba’s technology, capital, and logistics playbook, it wouldn’t just get bigger; it would create jobs and drag the rest of the local e-commerce industry forward with it. Even Biswas Dhakal, the founder of eSewa, arguably Nepal’s biggest homegrown fintech success story, publicly welcomed the deal.
Everyone assumed the story from here was simple: Daraz grows, Nepal wins.
It didn’t play out that way.
The Twist: Growth, Followed by the Layoffs
Here’s the part almost nobody expected. Within five years of the acquisition, Daraz had cut 11% of its global workforce. A year later, in 2024, it cut roughly another quarter of its staff. And the man who built Daraz from the ground up, co-founder and CEO Bjarke Mikkelsen, who had run the company for close to a decade, stepped down, handed the keys to an Alibaba Group executive, and walked away.
If Alibaba’s backing was supposed to make Daraz unstoppable, why does the company keep shrinking?
To answer that, you first have to understand what Daraz actually is. It isn’t the company most people assume it is.
Two Startups, One Parent, One Accidental Empire
Daraz never deliberately “entered” Nepal the way a company plans a market launch. What Nepalis know as Daraz actually began life as Kaymu, an eBay-style open marketplace that Rocket Internet, the German startup incubator, launched in Nepal in 2014.
Daraz itself was a separate company, founded in Pakistan in 2012 as a curated, fashion-focused e-commerce business, closer to a mini-Amazon than an open marketplace. It shared the same parent, Rocket Internet, but for years it operated as Kaymu’s rival, not its sibling.
In 2016, Rocket Internet stopped funding a fight between its own two companies and merged them into a single entity: Daraz Group. Kaymu had never operated under the Daraz name in Nepal before that. So when the merger happened, Daraz simply appeared in the Nepali market, inheriting Kaymu’s user base overnight.
Two years later, in 2018, Alibaba bought the whole group outright.
Why Alibaba Actually Wanted Daraz
Alibaba’s flagship platforms, Tmall and Taobao, dominate consumer e-commerce inside China. Alibaba.com, separately, handles B2B international trade. What Alibaba didn’t have was a consumer-facing storefront in South Asia. Daraz was exactly that gap, pre-built, with local trust, local sellers, and delivery infrastructure already running across five countries.
There’s a second reason that matters more for understanding what happened next: protection. The same logic that tells you to diversify a stock portfolio told Alibaba to diversify its markets. If one country suddenly changes policy toward foreign tech companies, a business with a footprint in five other markets can absorb the hit and keep moving. Building that footprint from scratch would have cost Alibaba two to three years of market research, seller acquisition, and trust-building. Buying an already-established company skipped all of it.
On paper, it was one of the sharpest acquisitions Alibaba could make: a foothold in a market of 460 million people, 60% of them under 35, for a price analysts estimated at $150 to $200 million.
Then Covid Nearly Ended It, and Then Saved It
One year after the Alibaba deal closed, Covid-19 arrived. In the earliest weeks of Nepal’s lockdown, Daraz’s sales reportedly collapsed to almost nothing. Deliveries simply couldn’t move.
But when restrictions eased in 2021, something shifted. Daraz pivoted hard into health and hygiene products, and its customer numbers reportedly grew by as much as 100%. The pandemic did something no marketing budget had managed: it taught an entire country what Daraz was. By November 2021, Daraz Nepal’s “11.11” sale generated Rs 36 crore in sales within 24 hours, a record for Nepali e-commerce at the time.
Covid, in other words, was the accidental brand campaign that built Daraz’s biggest long-term asset: recognition.
Spending to Build an Ecosystem, While Still Behind on Basics
With that new brand equity, Daraz poured resources into its sellers. It launched Daraz University and the Seller Sahayatri Program: free training, fee waivers, and hands-on support to help small Nepali businesses move online, an investment that reached thousands of participating sellers.
But growth on one side of the business exposed weakness on the other. Even a year into that investment, technology adoption among sellers lagged badly: in Bangladesh, reportedly, a large share of sellers still weren’t managing their shops through Daraz’s own app.
The Layoffs Keep Coming
Sellers who couldn’t or wouldn’t adopt Daraz’s technology were, over time, dropped from the platform. But the bigger casualties were the people running that technology. In February 2023, Daraz cut 11% of its global workforce. A year later, in early 2024, it cut reportedly as much as another quarter of its staff, the same window in which Bjarke Mikkelsen departed and James Dong, CEO of sister company Lazada, stepped in as acting CEO.
In June 2026, local reporting put the number of affected Daraz Nepal employees at around 30, alongside similar cuts in Bangladesh, Sri Lanka, Pakistan, and Myanmar, and the planned departure of Nepal managing director Aanchal Kunwar. Daraz Nepal publicly disputed the account: the company said no layoffs had taken place, called the reported figure “incorrect and misleading,” and described the departures as routine, performance-based reviews unrelated to the leadership transition already underway.
Whichever account you believe, the pattern by 2026 was hard to miss: a company still growing its customer base, yet still shrinking its headcount.
So Where Does Daraz’s Money Actually Come From?
To understand how a company can grow for eight straight years and still be cutting jobs, look at where the money comes from, and where it goes.
| Revenue | Expenses |
|---|---|
| Commission on sales | Technology & maintenance |
| Advertising (paid by sellers) | Staff salaries |
| Delivery charges (sellers/buyers) | Logistics |
| Payment processing fees | Payment processing fees (yes, both sides) |
| Everything else |
That overlap in the last row isn’t a typo. It’s the actual problem.
The Core Problem: Revenue That Turns Into Expense
Take delivery charges, Daraz’s most visible revenue line. Customers and sellers pay it. But in a country without a reliable, standardised address system, that same fee often has to be spent right back: on repeat delivery attempts, on locating unclear addresses, on simply finding the customer. In Nepal, a delivery charge isn’t pure profit; it behaves more like a pass-through cost that occasionally leaves Daraz topping it up out of its own pocket.
To its credit, Daraz built its way out of dependence on third-party couriers, developing its own in-house logistics network, including a shift toward EV bikes for last-mile delivery, and has reportedly started opening that logistics arm to third-party clients as a separate revenue line. That’s a company trying to convert its biggest cost centre into a second business.
The First Real Signs of a Turnaround
According to a former employee affected by the 2026 restructuring, Daraz Nepal’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) has turned positive for the first time. That’s a genuine milestone: it means Daraz Nepal’s core operations are now generating more cash than they consume, even though the company hasn’t reached full net profitability yet.
However, to achieve positive EBITDA, Daraz had to lay off hundreds of employees, increase delivery fees, and introduce a cash-on-delivery handling fee.
If Daraz can keep pushing up average order value while holding expenses flat, and the company has openly talked about using AI to help get there, Nepal could be looking at the first e-commerce business in the country to post a genuine net profit. That would be a historic first for Nepali e-commerce, not just for Daraz.
What This Actually Teaches Nepali Entrepreneurs
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Being acquired isn’t the finish line: it’s a change in incentives. Daraz didn’t get worse because Alibaba mismanaged it. It got restructured because Alibaba, as a shareholder-driven public company, needed Daraz to eventually behave like a profitable business, not a growth experiment. If you’re building a company hoping to be acquired, understand what your buyer will need from you after the deal closes, because that’s the business you’ll actually end up running.
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Revenue is not the same as profit, and confusing the two will bankrupt you slowly. Daraz posted record-breaking sales years before it came close to profitability. If your business plan measures success in sales figures alone, you’re tracking the wrong number. Track what’s left after every rupee of that revenue gets spent: that gap is where businesses quietly die.
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In markets with weak infrastructure, “free” services aren’t free: someone eats the cost. Daraz’s delivery-charge problem exists because Nepal doesn’t have a standardised address system. Before you price a service, ask what breaks in your specific market that competitors in bigger economies never have to think about, and price for it honestly, upfront.
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Owning your bottleneck beats renting it. Daraz’s decision to build its own logistics network instead of staying dependent on third-party couriers is the single clearest reason it’s closer to profitability today. Whatever function is quietly draining your margins (delivery, payments, support), the businesses that eventually make money are the ones that bring it in-house instead of paying someone else’s markup on it forever.
The Real Question
Is this the end of Daraz? Almost certainly not. But it is the end of the story Nepal told itself in 2018: that being bought by a global giant automatically means smooth, guaranteed growth. What’s actually happening is slower and far less flattering: a company grinding, quarter by quarter and layoff by layoff, toward the first real proof that Nepali e-commerce can make money at scale.
If it gets there, 2026, not 2018, will be the year that actually mattered.
Sources & further reading
- Kathmandu Post: Daraz Nepal trims workforce amid South Asia restructuring (June 2026)
- Kathmandu Post: Alibaba makes forays into Nepal (May 2018)
- The Express Tribune: Daraz to cut 11% workforce (Feb 2023)
- Profit by Pakistan Today: As Bjarke leaves Daraz, more layoffs on the cards (Jan 2024)
- TechLekh: Daraz Announces Layoffs After Lazada CEO Assumes Control (2024)
- NepaliTelecom / ShareSansar: Daraz 11.11 2021 sales results
- ICTFrame / Daraz Life: Seller Sahayatri Program & Daraz University coverage