1) Tell us about ShopUp.
ShopUp is a full-stack B2B Commerce platform for small businesses. When we talk about small businesses, we primarily focus on 2 groups: one group is the neighborhood mom and pop shops, also known as Mudir Dokaan in Bangla. These are the small shops we see around us on our streets. The second group is online-based businesses. If we talk about the former, 98% of our country’s retail sales take place through them; e-commerce and modern retail play a smaller role. So, the majority of the retail transaction is actually taking place through neighborhood shop retailers, and in terms of online services in our country, we have a unique factor, which is the majority of online brands are actually driven by Facebook sellers, which we cater to as well.
We have around 500,000 SME on our platform right now. And all these SMEs are achieving 20 million customers every month.
2) What kind of services do you provide? And, what makes you stand out?
When we talk about Full-stack, we primarily talk about 4 services:
i) B2B commerce – the majority of these small sellers are traders. They need to source products that they can sell at their shops. So, they can do that through our platform.
ii) Last-mile logistics - currently, we are the largest last-mile logistics service provider in Bangladesh, we call it ‘RedX’. RedX is the delivery service our merchants use to deliver their products to the customers.
iii) Embedded finance – through this, our merchants can apply for eLoan or Digital credit services with ease and over a short period of time. Since we are aware of their business process and the data required to be applicable for loans, it is easier for us to profile them and provide them access to credit.
iv) Business management solutions – this service allows our online SME partners to avail solutions that increase efficiency in their business by targeting increase in sales and shop management.
These are the 4 services, and when combined, we call them full-stacks B2B e-commerce platform.
3) Due to the pandemic and instructions for quarantine, we have seen online businesses rapidly increase, especially in South-East Asian markets. So, how are you coping with these changes? And where do you see ShopUp heading in the near future?
I think for us, the divide between online and offline is a beautiful art. Most of the online sellers are actually drawing away from offline territory and are looking for different channels, like Facebook, to sell their products. And, in recent times, we have seen a very rapid spike in that. For example, in our last-mile logistics, we have seen that daily parcel delivery has increased roughly 13 times between April and now.
Number 2 is that we’re also seeing that it’s not just about the online shops – the regular shops are facing a lot of pressure these days as well. The essential demand is going to help them, but the traditional supply chain is broken. Not all of them are being able to perform in their business like they were even a year ago, and so now we are also helping to make sure these businesses maintain the goals that they have today.
4) What kind of benefits do you receive from your partners involved in the venture?
I think we have been very lucky to have great partners, especially our investment partners.
The first investor we had was Omidyar Network. They invest in different kinds of ventures, and they were the first to come into ShopUp in November of 2018. What they do is they help you understand how to structure your business better. The founders, of course, have a vision and an idea, but it is difficult to execute it and build a business around that idea.
The next investor who came in was Sequoia Capital. They help us a lot in terms of understanding how to execute ideas. For example, once you have your “why” fixed, how do you go there with whatever that you’ve built? In these cases, Sequoia can give you a lot of insight.
The other kind of partners that we have are mostly commercial partners, like BRAC. They were our first limited partner and we’re grateful to them because they believed in us when we introduced a very new model that was not like anything in Bangladesh. We’ve been working with Facebook very closely with them and they have been very supportive. We also have investors like Speedinvest, and Londsale who believed in our vision and supported us.
5) What was the ideology that you adopted when you decided you wanted to work with small businesses?
Bangladesh is one of the fastest-growing countries right now, our economic growth is 7-8%. But there’s one thing that we’re lagging behind which is the growth in the job sector – it’s less than 1%. So, what ends up happening is the creation of a big gap which we need to fill with these small businesses, with people not getting jobs starting their own businesses. That’s why this is an SME first country, very similar to India, Indonesia and Vietnam, which are all SME first countries too because everyone is facing the same circumstance.
Suppliers will not be honest with SMEs and they will not be able to work with large distributors, they may not have the access to distribution to all over Bangladesh, banks will not approve them loans - there are multiple problems that small businesses face.
What we want to do is ensure these problems are solved so that any SME can grow. What they should rather do is focus on their customers and their products. And, if we can do that, we can ensure that this entire group of SMEs can drive the growth of the economy. That’s something that would help us lead the entire development cycles for the country, and that’s why it’s so important.
6) Do you face any challenges when finding resources?
Start-ups in Bangladesh are not where people want to work usually. There are a lot of big companies and people want to go there. What I do personally is that I focus a lot on recruiting. As a founder, I think it is my responsibility to make sure that the right talents are here to stay.
Engineering has been one thing we wanted to focus on, like we need good solid engineering talent. So last year, we opened a ShopUp Bengaluru Engineering Centre and now we have a Bengaluru company merged with us where we hire engineering talent and have a tech team in India as well.
7) What do you train the small businesses in? Could you tell us the process?
Before, we used to do a lot of in-person training when the merchant base was smaller, but now that we have about half a million, it’s not easy to educate all of them at once, and so we focus on self-service training through the app. A big chunk of our businesses are new businesses or those getting access to online platforms for the first time. Therefore, most of the training is just the basics and to ensure that they are adopting the technology properly.
But one thing that is important, and I want to share with the team as well, is that the entrepreneurs who are experts in the business are not us, we can’t probably imagine how to sell a product, but we can ensure that people know how to use the app. Most of our training is about that and we never assume that we know how to run their business better than them.
8) Can you tell us about a business that you helped establish that you’re particularly very proud of?
Yeah, I always talk about Izu apu. One of our success stories is that of Sazia Hasan Izu, who runs a Facebook page named ‘Rapunzel’s Secret’. Initially, I think she was making 10/15 bottles at once and she started to earn around 9/10 thousand per month. We were trying to help her out with logistics support, but were struggling at that point since it was really early for ShopUp as well. She received a loan to scale her business through ShopUp. In fact, when Queen Maxima of Netherlands visited Bangladesh, she was particularly touched by her story after which she became an advocate for Izu Apu. She even mentioned the story of Izu Apu and gave ShopUp a shoutout during some of her keynote speeches as the UN-Secretary General’s Special Advocate during different FinTech festivals.
The thing is seeing a business growing to that level is very inspiring. And she is just one of the 500,000 people that we have helped out – all of them inspiring and beautiful in their own ways.
9) You mentioned earlier that Facebook is one of your partners. So, does ShopUp use messenger and Facebook data to attract customers?
No, our activities happen in a very similar manner as those of other businesses. They don’t give any access to extra data to their partners. We use the platform the same way you’d probably do. So, no we don’t and whatever little data we get, they’re very strict about how we get to use it.
10) How do you reach out to your merchants and clients?
We have 3 main acquisition channels.
i) Organic, which is the word of mouth.
ii) Digital channels like Facebook.
iii) We also have physical links whom we call partners, and these partners are all over Bangladesh. They basically go into retails and help them understand the training mentioned earlier.
11) Could you list some positive aspects of start-ups that people are unaware of?
I think learning at start-ups is unmatched by anywhere else. Even if you speak to a few colleagues that we have, you will hear that learning is very fast-paced here. Anyone who wants to have high-velocity learning, a start-up is the place to go. If you want to fast-track your career by a few years, join a start-up and work there for a couple of years, it’ll definitely help. I’ve seen people who’ve worked at start-ups for 2/3 years and then got a job at higher-profile companies than their peers because they have multiple responsibilities and their exposure was much more.
Another thing is that start-ups are always about solving certain problems. Large companies have already solved their problems and are scaling the solution. Start-ups always go after problems that are unsolved and essentially be a part of a legacy. If I weren’t a founder, I would have probably been working for a start-up.
12) Which do you think is the most important among the following 5 elements: Ideas, Team, Planning, Product and Services, and Marketing Strategies?
The team, for sure. I think everything starts with a team no matter what idea you have. You need to be very strict about your ultimate vision but be flexible about how you attain it, which means that ideas can change along the way. If you have a solid team, you can maneuver any other problem you have.
I’d say products and services are the second most important. I’m not sure about planning and ideas, but marketing strategies would be the last one.
13) Who would you say inspired you to become who you are today?
Jack Ma mostly because of the way he thinks about how SMEs can solve large economic problems, bring value to the economy, and because of his mental model of the Iron Triangle of Commerce.
14) Where do you see ShopUp in the next 5 years?
I believe that this decade will be mostly about small businesses adopting technology in Bangladesh. We have seen that in other markets in the last decade and that has been the single most crucial thing in the SMEs in the region. So, Bangladesh would be doing that as well and we basically tend to play a vital role in that in remote areas, in urban areas, everywhere.
We see ourselves being a true driver of the SME adoption of technology in Bangladesh, we see ourselves in every district of Bangladesh and we are heavily focusing on expanding our network.
15) October is the month about highlighting mental health. And so, I’d like to ask you, being a start-up entrepreneur, what does it mean to you?
Mental wellbeing is one of the most underrated things, especially in a country like Bangladesh. I’ve talked to multiple founders and, in fact, in Sequoia, there are various experts to make sure their employers are mentally healthy and know how to tackle stress properly.
Different things work on different people. For me, meditation works, for someone else it may not be enough. And it’s important for all of us to actively think about what actually centers our mind so that we can tackle everything else.
Also, what I’d like to tell everyone is that we should spend some time to figure out what helps us. Our mind is very precious, and in need of proper care, just like our physical health.