Business Innovation: Jamalon Bookstore Business Model

Jamalon: Arabic Bookstore

Brief Introduction of the Business Model

Online businesses have become popular in the recent years. With the increased penetration of technology into people’s lives, businesses have capitalized on its development to create business models that are not only convenient, but can also reach an unlimited target market (Manzoor 2010). One of such business models is Jamalon.

Jamalon is a robust online store that has been described as the “Amazon of the Middle East” (Tagholm 2015). Closely resembling the Amazon model but with unique characteristics that make it different, Jamalon brings together the community of publishers, book readers, and distributors. Founded in 2010 by Ala’ Alsallal, a Jordan citizen, Jamalon offers over 10 million book titles in both English and Arabic (Jamalon n.d.).

Ala’ Alsallal observed that though Amazon was widespread due to its exemplary service, it was yet to be enjoyed in the Middle East and Northern Africa (MENA) region. Amazon was less popular because the online company did not sell books written in Arabic language; yet, there was a potential market in the Middle East. Jamalon, therefore, was majorly established to provide the Arabic readers in the MENA region a chance to purchase books written in Arabic. Alsallal further helped to bridge the gap between publishers and readers of books written in the Arabic language. He realized that the area had over 5,000 publishers who had little or no access to Amazon services (MacBride 2014). In Jamalon, one can purchase a book through their website Jamalon.com, which is then shipped to the customer through the Aramex distribution services. In its latest development, Jamalon has introduced Print on Demand services to address inventory issues. One can pay for the books through such means uch as PAYPAL, Visa, Cash on Delivery and Mastercard (Jamalon n.d.). The model has thus provided a platform where authors and writers can both get efficient book services (Jamalon n.d.).

Evolution of the Model

The business was first run by Alsallal with the help of his brothers, sisters, and his mother at home. With a seed capital of about $12,000, Alsallal started his business (MacBride 2014). At the beginning, Jamalon’s focus was on the book readers, authors and publishers in Jordan. He realized that though there were about 200 publishers in Jordan, the books they published could not be easily accessed by interested readers (MacBride 2014). Alsallal began by approaching as many publishers as possible to prove them why the service he offered would give them a breakthrough in what was a scattered, yet rich market. Initially, it was hard for most of them to make a deal with him as his company was a start-up company, and hence, in some cases, he had to lie that Jamalon was already established. However, when publishers and authors saw the potential offered by the model, they signed deals with Alsallal. He then expanded to other countries where the market was readily available. Readers interested in Arabic titles are spread all over, providing a ready market for Jamalon. Therefore, he further received more funding for investment in the business from about eight investors. This has seen its expansion to a worldwide market. The model has also expanded to cooperate and work together with Amazon. It uses Amazon to supply its Arabic titles to the market in the United States and the United Kingdom (Arabian Business 2016). Alsallal has further hinted on a possible partnership with Amazon. However, its latest milestone is connected with adoption of the Print on Demand service, which aims to stop using traditional printing (Arabian Business 2016). Printing can now be done on demand to ensure that publishers do not lose possible customers when they are short of stock.

Leadership: Background of the Founder

Alsallal was always interested in computers in technology. During his university studies, he took part in different IT-oriented competitions, such as in programming. He helped to translate the WordPress blog into Arabic. Besides, to raise part of his tuition fees, Alsallal actively launched websites with the help of which readers could download free books. He further won an international competition organized by Microsoft, which appeared to be a chance that allowed him to create Microsoft World macros (Tagholm 2015). After graduating, Alsallal pursued a master’s degree in Greece. Here, he secured an internship at Consolidate Contactors Company where he gained meaningful and valuable knowledge. By the time he started his business, Alsallal accumulated important knowledge and information about information technology, which became a background that favoured him later in Jamalon. Three years after his father’s death, Alsallal launched Jamalon. Apart from his immense knowledge in technology, he also benefited from the entrepreneurial skills he gained by helping his father run a small supermarket (MacBride 2014). Therefore, by the time he entered the university, he was well versed and informed on the art of buying, selling and cooperation with suppliers. However, he was a Harry Potter fan, and his idea of Jamalon was informed by his need to have the Harry Potter’s series quickly translated to Arabic. He asked a few of his friends and fellow students for help, and they translated the Harry Potter and Death Hallows book. Once online, over a million people downloaded the translated work. Alsallal got a cease and desist letter from J.K Rowling’s lawyers forcing him to close his website. The idea, however, had already been born (Pasha 2013). The founder describes himself as a knowledge provider linking thousands of publishers with millions of customers from all over the world. He believes that it is important to break barriers to foster the exchange of knowledge and information between individuals. As a result of its activity, the company has expanded to employ over 40 employees (Aramex n.d).

Products and Services Offered

Jamalon has brought a revolution based on publishers’ and readers’ experiences. The two are connected regardless of where either of the parties is situated. Alsallal established Jamalon to help readers access books, especially those in the MENA region. Books are thus the major product that Jamalon provides. A reader, for example, in Dubai might be interested in a particular book. By creating an account in Jamalon, one makes a request to have the book delivered. The books in Jamalon range from religion, history and biographies to fiction. This business model offers over ten million books in English and Arabic languages, and further serves the Arab diaspora in the world (Jamalon n.d.). Jamalon further provides a bridge between the authors and publishers. Alsallal realized that the authors in the MENA region were cut out from online services, such as those offered by Amazon. Jamalon thus provides a platform for authors to place their books, making it easy for the target readers to purchase them. Jordan alone has over 200 publishers; Egypt has over 500, whereas Lebanon has over 1000 publishers (Arabian Business 2016). Jamalon gives the publishers an avenue to sell their published books all over the globe. The company further offers distribution services for the products it sells. Warehouses have been established in the places from where the distribution of books is done (Jamalon n.d.).The North African location is supplied from the warehouse located in Egypt, whereas the Gulf region is served through the Saudi Arabian warehouse. Levant warehouse serves Jordan. In conjunction with Amarex, Jamalon allows customers to pay for their products once they receive them. The Cash on Delivery Service has continued to make the business unique. Areas that do not have postal traditions are the major beneficiaries of this service. Lastly, the company also established an e-site where customers can purchase e-books rather than buying the hard copies.

Unique Characteristics of the Model

A unique feature of Jamalon is the fact that it embraces technology to satisfy the needs of customers. The business operates virtually, whereby clients order their products online. This is imperative in reducing costs associated with establishing brick and mortar locations of businesses (Manzoor 2010). Therefore, a client just has to order a particular book online and wait for it to be delivered to them. One would expect a book supplier to have a physical store where customers could come to buy the books they need. However, Jamalon enjoys being a website that is visible all over the world. In this case, the target market is not limited by geographical constraints as is the case in many brick and mortar businesses (Manzor 2010). There are also other unique factors that distinguish Jamalon from any other service of a kind. First, Alsallal recognizes the low usage and adoption of credit cards in the MENA region. As a result, customers are offered the choice to pay when the goods are delivered. Alsallal reports that currently, over 80% of its customers use the Cash on Delivery service (Aramex n.d.). Such people comprise a significant share of Jamalon’s market who would be left out if the COD services were not available. Another unique characteristic is the fact that Jamalon appreciates the differences in customer needs, and language differences in particular. A local interface is thus used for every country to which the company supplies. The prices of the products are also indicated in the different countries’ currencies (Tagholm 2015). Another unique idea of the model is the adoption of the Print on Demand approach. This approach addresses issues connected with conventional printing, including storing costs, costly cross-border delivery and being derived of opportunities when stock runs out. This helps reduce the costs of the books, hence attracting more customers.

The Stakeholders

Jamalon consists of several stakeholders. Book readers are one of the clients. They rely on Jamalon to provide them with the books they need regardless of their location in the country. Arabic books readers comprise the greatest percentage of those served by Jamalon. Publishers are another stakeholder. Alsallal realized that though there were many publishers in the region, they created a scattered market. They had little or no access to Amazon, and hence, the books they published would lie in stock for days as they could not easily access the market (MacBride 2014). Jamalon provides publishers with a platform where people can easily access the books. Regardless of where the market is, the geographical barrier has been broken, and the publishers’ costs have been addressed. Authors are also important stakeholders in Jamalon. Without them, this business model would most likely not have existed. Publishers only publish because the authors write. The latter, therefore, benefit by having the publishers host their books in the Jamalon website. Alsallal says that in the beginning, he, in some cases, had to approach the authors to sell the idea to them. Today, the access to and purchase of authors’ works is just a click away due to Jamalon. The government is another part of the Jamalon community. The government provides regulations that govern such models as Jamalon. Unlike other brick and mortar businesses, Jamalon deals with many governments since it supplies books to different countries. In countries, such as Saudi Arabia, government censorship has largely affected the conduct of Jamalon. Distributors, in this case, represented by Aramex, also play an important role in Jamalon. They not only get the products to the clients, but also facilitate the Cash on Delivery service. Lastly, employees are another shareholder in Jamalon. Currently, it employs more than 40 staff members who ensure that the company runs smoothly (Cruchbase n.d.).

Jamalon Competitive Advantage

The Porters Five Force Model is significant in analysing the level of competition in any industry. For businesses, three forces present horizontal competition. They are the threat of substitute products and services, the threat from new entrants and threats from rivals already established. Vertical competition comprises suppliers bargaining power and bargaining power of customers (Walder 2013). To gain competitive advantage, Jamalon provides products that its rivals, such as Amazon, do not. For instance, Amazon does not provide Islamic titles. Jamalon, on the other hand, has 75% of its titles in Arabic (Arabian Business 2016). Another advantage is derived from its bargain with customers. To ensure that they remain competitive, Jamalon allows for Cash on Delivery on goods. Realizing that not all customers can use credit cards to buy books, Jamalon has made the process of book purchase easier for customers by allowing them to pay once they receive their products (Aramex n.d.). Jamalon further derives its competitive advantage by bargaining with suppliers. In this case, publishers and authors are the major suppliers of Jamalon products. The model offers the best values to them, hence increasing its popularity. Publishers and authors, at a small fee, have their products listed on the Jamalon website.

By establishing the Print on Demand Approach, publishers and authors reap many benefits of Jamalon (Arabian Business 2016). Their items can be purchased by people all over the globe. By bargaining and giving suppliers and authors better deals, Jamalon has achieved a significant competitive advantage over its competitors. To deal with the threat of new entrants, Alsallal has ensured that it delivers the best quality of services and products to the stakeholders. By getting the best value as promised, they have remained loyal to Jamalon. It also as set its prices relatively low. This sets a bar below which other entrants and substitute products cannot thrive.

Value to Stakeholders

Jamalon has promoted a revolution in the conduct of business in the MENA region. Even as the model grows and business expands, the stakeholders reap great value of it. For customers, the process of book purchase has been simplified. With the rapid development of technology, customers can order their reading materials from the convenience of their house. The provision of books in Arabic is the other major value that book readers continue to derive from Jamalon. In the past, Arab speakers, especially in areas outside the Middle East, for example in the USA and the UK, had difficulties accessing books written in Arabic as Amazon sold few of these (MacBride 2014). Jamalon has thus provided the rare opportunity for Arabic readers in the diaspora to get the books they desire by working with Amazon. Further, the provision of COD services has been of great value to the readers. Publishers also derive value from Jamalon. For instance, in the beginning, Alsallal realized that publishers had a market scattered all over. Further, they had rights for just a few books (Arabian Business2016). By creating Jamalon, the publishing world in MENA has greatly benefited. Further, the approach of Print on Demand means that publishers can print as low as one book, and do not miss on opportunities as they would when their stock runs out. Jamalon has also been of much value to authors. Today, they can almost be sure of the purchase of their books once they are on the Jamalon website because they can reach a worldwide market. Employees also have a source of livelihood in Jamalon. In facilitating the process, they not only learn, but also make a living by ensuring that the set goals and objectives of Jamalon have been achieved.

Revenue Stream and Growth

After numerous interviews with popular magazines, such as Forbes, Alsallal is yet to reveal the revenues that Jamalon makes. However, by 2012, the business was yet to make any profits (Crunchbase n.d.). The earnings from the company were all recycled back to the company, giving it a good foundation to meet its target market. Nevertheless, the founder expressed optimism that by 2014, the company would make some profits from its operations. A year and a half later, it was be expected that the company would make some profits. This would be after establishing warehouses in Egypt, Saudi Arabia and Jordan (Arabian Business 2016). By 2015, the company received funding totalling to about $ 430000 from four rounds comprising eight investors (Crunchbase n.d.). However, it has been reported that yearly revenues from advertisements in the website total to about $8,891 (Tagholm 2015). In 2015, Alsallal reported that the growth revenue had increased by three times compared to the earlier years. In term of sales, the founder reported that by 2015, the monthly sales had increased by 30% (Aramex n.d.). This is an indication that a company has significantly grown from since its first years of existence. Growth has also been seen in terms of the number of Arabic and English copies handled by Jamalon. By 2015, the company hit its 10th million mark compared to 9 million in 2014 (Jamalon n.d.). This is a sign of positive growth for Jamalon. Growth has further been seen in the number of potential customers that visit Jamalon site very day. Today, Jamalon has about 2000 visitors daily. Besides, growth is evident in the expansion and the number of customers that Jamalon currently reaches. Today, Jamalon serves a worldwide target market as opposed to when it started and reached only the Middle East customers.

Conclusion

Jamalon has revolutionized the book industry in the MENA region. Technology has brought a paradigm shift to how people conduct businesses. By capitalizing on the strength of knowledge and technology, Alsalalla has undeniably achieved his goal of being a knowledge provider and a linkage of information between the individuals. The model has brought much change to an area widely known for its poor reading culture and high literacy levels. Jamalon thus brings an opportunity to promote education and foster a learning culture in the Middle East. The area has reaped numerous benefits of the creation of Jamalon. For instance, if publishers continued to sell their published materials personally, the costs would have continued to sky-rocket.

Jamalon is thus a very practical case of how one can utilize technology to reach previously potential untapped markets. Clients from Egypt, Dubai, Lebanon, Jordan, and Saudi Arabia can access books of their choice in a single click. By customizing the platform to each country’s language, Jamalon has made it easier to reach the market in the Middle East. The MENA region is one of the areas in the world where business is booming, and Jamalon could not have come at a better time. By simplifying the tasks and roles of publishers and authors in getting their books to the market, the area the service covers has increased from being a small region to worldwide.

Publishers and authors have thus reaped the maximum benefits, especially because books and book products are not taxed in the region. Jamalon has, therefore, not only created job opportunities for many people, but also helped in improving the reading and education culture in MENA. By harnessing the latest digital technology, Jamalon has produced a desirable shift and development in the Arab world.