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Daraz, the Alibaba-backed e-commerce giant operating across South Asia, has long represented digital ambition in emerging markets. Founded in 2012 by Rocket Internet as an online marketplace in Pakistan, Daraz rapidly expanded to Bangladesh, Sri Lanka, Myanmar, and Nepal, offering everything from electronics to fashion.
Alibaba’s 2018 acquisition for an estimated $200 million positioned it as a central pillar in the group’s global strategy, aiming to scale through superior technology and logistics. Yet as of November 2025, Daraz continues to face substantial losses, pressured by economic turbulence across its key markets, intense competition from Chinese platforms such as Temu, and internal inefficiencies.
While full FY25 financials (April 2024–March 2025) have not been released, partial insights from Alibaba’s disclosures and industry analyses suggest revenue gains remain modest and overshadowed by ongoing red ink.
FY24 Performance: The Numbers Behind a Faltering Growth Curve
The most comprehensive data available comes from FY24 (ending March 2024), which shows Daraz earned $127.3 million in revenue, a minor 1.5% increase over FY23’s $125.9 million but still 17% lower than its $153.9 million peak in FY22.
This stagnation reflects a structural shift in Daraz’s model. Retail revenue from own-inventory sales shrank to 26.7% ($34 million), roughly half of previous peaks. Meanwhile, logistics revenue surged to 40% ($50.92 million), marketplace commissions reached 28% ($35.64 million), and marketing revenues dropped 33%, although other income provided a helpful $4.1 million boost compared with FY23’s $25.9 million loss.
Costs Surge as Efficiency Lags
Costs, however, continued to weigh heavily. Cost of revenue fell 11.6% to $112 million, enabling Daraz to post gross profitability of $15.2 million: a 12% margin and a reversal of FY23’s $1.4 million gross loss.
But other expenses rose sharply, up 9.8% to $146.3 million. Payroll expanded 17% to $87.5 million and accounted for 39% of all non-inventory expenses. Net losses narrowed slightly to $129.4 million from $144.4 million, yet still exceeded total revenue and pushed cumulative losses since inception to roughly $750 million. Alibaba injected an additional $129 million and converted $29 million in loans to equity, bringing total support to $884 million, underscoring Daraz’s dependence on its parent as profitability continues to lag.
A Precarious Setup for FY25
These FY24 metrics are consistent with Alibaba’s international e-commerce disclosures in its May 2025 FY2025 report showing 25% growth in global international sales to $27.4 billion. These metric establish a precarious baseline for 2025. Alibaba’s Q1 FY2026 earnings (April–June 2025) indicated continued investment in South Asia but highlighted macroeconomic headwinds hampering profitability.
2025 Headwinds: Temu, Taxes, and Turbulent Economies
Partial FY25 data shows that Daraz’s challenges persisted into 2025. Daraz.pk generated $32 million in revenue in October 2025, a 5–10% increase from September, according to industry estimates. But this uptick followed a sluggish first half of the year marked by Pakistan’s high inflation, which peaked at 11.5% in Q2 2025, and broader regional instability.
Temu’s aggressive entry into South Asia in early 2025 had an immediate impact, offering ultra-low prices shipped directly from China. Anecdotal reports suggested Daraz experienced a 20–30% drop in traffic. A pivotal policy change came in July 2025 when the Pakistani government imposed a tax on imports valued under $800, doubling Temu’s effective prices and prompting consumers to return to local marketplaces. Meanwhile, Temu’s parent company continued to report heavy global expansion losses, estimated between $8–9 billion from 2023 to 2025, mirroring Daraz’s burn rate but at a far larger scale.
Regional Economic Pressure Deepens the Crisis
Economic pressures further strained performance. Pakistan’s IMF bailout in June 2025 introduced austerity measures that reduced national e-commerce spending by roughly 15%, according to State Bank indicators.
Bangladesh’s political unrest in Q3 2025 and Sri Lanka’s slow recovery from its 2022 default dragged down regional growth. Alibaba’s Q2 FY2026 earnings (July–September 2025) showed international commerce up 32% year-on-year to $4.8 billion but acknowledged intensified competition in South Asia as a margin risk.
Sponsor Fatigue and Impairments
Internal difficulties also persisted. Analysts highlighted signs of sponsor fatigue as Daraz was absent from Alibaba’s FY2025 ecosystem overview. Alibaba additionally recorded a $356 million impairment in FY24 related to Daraz, signaling doubts about long-term value recovery. Operationally, payroll and administrative costs remain elevated despite earlier cost-cutting attempts, indicating structural inefficiencies.
Daraz’s Strategic Shift: Logistics First, Profit Later
Daraz has increasingly shifted its focus toward logistics capabilities, including Daraz Express, and marketplace commissions rather than own-inventory retail. This shift has stabilized gross margins but has not ignited the scale needed for profitability. In 2025, partnerships with local sellers and expansions of Daraz Mall contributed to stronger October sales, but analysts argue that after 13 years in operation, Daraz has yet to achieve the network effects typical of dominant e-commerce players.
Can Daraz Break the Cycle?
The global landscape provides further context. Alibaba’s international arm grew 25% in FY2025, but Daraz remains a small contributor within this portfolio. Temu’s continuing losses illustrate the difficulty of global discount-driven expansion, while Amazon’s moves in Southeast Asia raise competitive pressure on all regional players. For Daraz, the remainder of 2025 may hinge on post-tax recovery, operational efficiency, and whether it can differentiate its value proposition beyond low prices.
Without a major breakthrough in scale or sharp improvements in cost discipline, Daraz risks further erosion of parent-company confidence. In a global e-commerce market worth over $700 billion, Daraz’s uncertain trajectory highlights the broader challenges of building sustainable online retail businesses in emerging economies.
All the data is obtained from Daraz Group Financial Statements.
