The Grand Opening of The First Digikala Physical Store in Iran

The first Brick-and-Mortar Store of Digikala opened in Tehran.

This news in the past weeks has raised many questions regarding the reasons for the opening of a physical store by the country’s largest online store. Some experts considered this a setback forDigikalaand some believed that this action was due to the decrease of the online sales of this complex. However, reviewing the global online e-commerce news shows that compared to similar businesses around the world the opening of Digikala’s brick-and-mortar store (physical store) should have happened even earlier.

An Experience-Oriented Store

According to the remarks of managers of Digikala at the grand opening ceremony of the physical store, this store was opened to bridge the gap between the physical and online sales in order to cover all the benefits of both shopping styles for customers. “As you know, it has been a long time since the online and offline worlds, or fair enough to say, technology and real life have been mixed and their borders have been narrowed down over time. It has been a long time since we realized the need to establish a physical and experience-oriented store through studying similar global cases and the feedback received from our customers.” Said Saeed Mohammadi, the co-founder of Digikala at the opening ceremony of the physical store. “We wanted to expand and enrich our portfolio to cover the functional values of the physical stores for users. I must say that although there are significant valuable features in the digital space such as the possibility to check, compare, and choose from millions of products, we still need an experience-oriented space. We intend to create a better customer experience for our users in this new brick-and-mortar store.”

Masoud Tabatabaei, the CEO of Digikala, also highlighted the experience-oriented atmosphere of this store and announced that this store has three experience-oriented spaces: “One of these spaces is the mobile zone where users can test all types of mobile phones and compare them with other devices. We also have a sound zone which includes electronic products related to sound such as speakers, headphones, etc. Users can test the sound quality and power of these products in a standard environment. The third zone is dedicated to gaming products and users can experience gaming consoles and accessories there.”

Universal experience

It was almost ten years ago that Amazon opened its first brick-and-mortar stores in the world, and since this online retail giant had started its activity by selling books, it opened its first brick-and-mortar stores in the same field of activity. Amazon, however, gradually increased its physical stores and created several types of stores. Currently, nearly 10 types of brick-and-mortar stores have been established by Amazon around the world, which operate in different fields of activities and have different sales models. For example, Amazon Style is a chain of Amazon clothing stores and there are other types of stores where buyers can buy foodstuffs with their credit and without using cash. After a while, Amazon also started buying chain stores and it bought the famous brand called Whole Foods for several billion dollars to be able to combine the experience of brick-and-mortar market operators with its innovations.

The opening of brick-and-mortar stores by an online store is not limited to Amazon. Other e-commerce giants in the world have also turned to this path. For example, Alibaba Group opened stores across China with different brands. Freshippo is one of them which is an active grocery store that has more than 20 stores in China. Souq also opened its experience-oriented stores in Dubai a few years ago so that buyers can touch and experience the products. The managers of Digikala repeatedly emphasized the “experience-oriented” theme of the store in the opening ceremony of this brick-and-mortar store and believe that their store is a place where customers can experience working with electronic devices in various sections.

The model adopted by these global online businesses is called bricks and clicks, which is a physical and virtual business model. This business model means the brands have both physical and online stores and both move towards the same goal. Many customers who once flocked to chain stores for shopping and also showed a desire to shop online through various online stores still prefer to do their shopping in traditional or so-called brick-and-mortar stores.

Digikala is the first online business in Iran that has opened its physical store and plans to seriously continue in this market and enter other fields as well. “We will try to take the next steps according to the thousands of comments and feedbacks that we will receive from our customers.” Said Hamid Mohammadi, the co-founder of Digikala at the opening ceremony of the physical store. “we might launch our next physical sales centers in other categories based on people’s opinions.”

Amazon launched its brick-and-mortar store when it was accounted for half of America’s online sales. According to last year’s report, Digikala has 50% of the country’s online sales and it seems that now is a good opportunity to shine in another market and take a new path. The managers of Digikala emphasized over and over that this is a new path they intend to try now as an experiment.

As we know, transitioning from a virtual store to a physical store and operating in both spaces at the same time is a challenging and sometimes impossible process for many brands, but in many cases the actions of online retailers in Iran, such as Digikala, open up new possibilities and paths. They have grown in a hard situation that few groups could overcome and deal with its problems and obstacles. It will be revealed later whether the Iranian e-commerce ecosystem can grow in the brick-and-mortar market as well as the online market.