Generation Start-up: Idealz wants to reward customers and charitable causes

The Dubai-based e-commerce site incentivises customers with big-ticket rewards while donating to the needy

Jad Toubayly, the co-founder of Idealz, says the company uses a portion of the company’s profit margins to fund the prizes they give away each week. Reem Mohammed / The National)

Four years ago, entrepreneurs Jad Toubayly and Easa Al Gurg hit on an idea they believed could challenge the traditional “click and buy” e-commerce model by incentivising consumers to not only purchase products, but also help the less fortunate.

In January 2018, they rolled out their online shopping start-up with the aim of creating value through an incentive structure that they say goes beyond traditional e-commerce transactions because of its social impact focus.

Mr Toubayly, a former investment banker, says the concept of Idealz is based on three core pillars: the latest digital, social and economic trends.

“E-commerce for the most part, which we define as any form of online transaction or online shopping, has not changed much since the inception of the internet. The basics remain the same: You put something in your cart, you check out and it gets delivered to you.

“We wanted to come up with something that was innovative and capitalised on the latest trends that were happening on the three pillars … that used an incentive model that has not been seen or been used before.”

The platform, which is available on Google Play and the App Store, combines a social impact initiative through the sale of its self-branded clothing and stationery products.

For every purchase a customer makes, they receive a coupon that places them in a prize draw that could see them win anything from a fully furnished studio apartment to VIP number plates, gold, cash, designer handbags and luxury cars such as a Mercedes-Benz G Class or a Land Rover Defender.

Customers then receive a second, complimentary coupon that doubles their chances of winning if they choose to donate the items they have purchased to charity. Regulated by Dubai’s Department of Economic Development, the company holds more than 20 prize draws each week and has so far given away about Dh25 million worth of prizes since going live in 2018.

Mr Toubayly says Idealz has collaborated with Dubai Cares, which comes under the umbrella of the Mohammed bin Rashid Al Maktoum Global Initiatives, through the company's “Give 2 Live” programme. The aim of Give 2 Live is to provide children in less developed countries access to quality education through its school-building initiative.

“At checkout, we give the customers the option, but not the obligation, to donate the products that they've purchased to charity,” he says.

“The incentive and donation models work well, and we've left quite a positive social footprint behind us. We've chosen our product list specifically to suit the requirements of a charity that supports educational causes, so stationary goes to schools and clothing also goes to the students within those schools in underserved areas.”

The business has grown from humble beginnings – the original business model was written on the back of an envelope and they chose not to embark on any early funding rounds, instead deciding to bootstrap the business themselves and sell a 9 per cent stake to Singapore-based venture capitalist Venture Partners.

“We had a relationship with them already and they liked what we were doing and believed in what we're doing,” Mr Toubayly says.

“We’ve seen too many times that a majority of start-ups divert their focus from the product and what the product is made for to the investor and what pleases the investor.”

Since launching the platform, Mr Toubayly says the Idealz app has been downloaded more than 500,000 times and has 400,000-plus active users from more than 130 countries, including from as far afield as the US, Australia and New Zealand.

Anything to do with educational causes is very dear to our hearts and us funding these schools, the measure, and the inner satisfaction that we get is way more than any bottom line

While the majority of customers are from the UAE and the Middle East region, Mr Toubayly says that Idealz has plans to cast its net further afield.

“We are slowly starting to focus more on international customers. The majority of our marketing initiatives happen locally, but we have shifted our focus to start looking at other territories.”

During the first year of operations, Mr Toubayly says the company grew by 800 per cent and it expects to grow by about 300 per cent by the end of this year. Although this is admittedly from a low base, he says the business expects to achieve healthy double-digit growth rates annualised across the next five years.

Idealz sells a range of self-branded clothing and stationery on its e-commerce platform. Reem Mohammed / The National:

Mr Toubayly says Idealz uses a portion of the company’s profit margins to fund the prizes they give away each week.

“We buy them in cash, we buy them outright and we buy them before launching any campaigns,” he says. “[Under the regulations] you must have funded and purchased the prize ahead of launching the campaign to the public.

“The mathematics work. Instead of taking all of a margin from selling an item and calling it profit, we take a big portion of that profit and give it back in terms of a prize.

“So when you sell [a] hoodie for 700 or 800 times [cost price], there is a significant amount of profit margin in there. You can call it profit and walk away, or you can take a huge portion of that profit and fund a prize to give back to our customers. That's the route we've taken.”

The short- to medium-term plan for Idealz is to become a major player in the regional e-commerce sector, but Mr Toubayly says the company also looks to create a positive social footprint through the charities they support and through longer term CSR programmes it is planning.

“We firmly believe that education is a key in giving you the opportunity to … potentially better your life in the future and the life of your family. Anything to do with educational causes is very dear to our hearts and us funding these schools, the measure and the inner satisfaction that we get is way more than any bottom line.”

Q&A with Jad Toubayly, co-founder of Idealz

What other successful start-up do you wish you had started?

I can't really point the finger at one, other than Idealz. There are very smart ideas that I've seen out there and I wish that I had studied them, obviously, given the level of success they've achieved and the market caps they have. But is it within my playing field to have done it? I don't think so. I mean, these are Silicon Valley, Palo Alto-based companies that have billion dollar market caps and had the right ingredients at the right time.

What new skills have you learnt since launching your business?

By trade, I'm an investment banker, specifically within credit and derivative structuring. It’s a very technical job at a B2B level. Idealz is very B2C, so the new skill that I've had to learn and acquire is people and customer skills. We have 400,000-plus customers and you do need to have that “customer is always right” mindset; keeping the customer satisfied, keeping the customer happy on a B2C level. That's a skill I had to learn quite quickly in running this business.

Where do you want to be in five years?

We are currently expanding ideas across the immediate territories around us. So within the GCC in five years, I hope that we will have reached international expansion.

If you could do it all differently, what would you change?

Absolutely nothing. I think of this question all the time … but the formula works very well with the ingredients that we had at the time to bring us to where we are today. There may be some things I wouldn't have done or some things I would have done additionally, but it all worked out very well for where we are today.