SHOPWAY

In Bangladesh local producers are never justified with the price. The problem being identified earlier could not be solved by many players where they all tried to connect local producers directly to customers. Shopway is an end to end solution for all the producers to retail their product and also to ensure the products off-take from retail. Shopway wants to create a digital distribution network benefiting all the stakeholders and utilizing the current retail network to minimize the product distribution cost. We want to digitize the biggest spending of households by bringing 1,500,000 offline retailers of the country having their inventory present online and local producers having access to reach the retail and be more consumer centric through adequate consumer data and real time retail inventory. We want to see local producers having a tool to directly communicate to both retail and consumer, retailers maximizing their revenue and satisfied consumers. 

We are trying to address the problem of Accelerating economic growth and create high-paying jobs across geographies and demography in Bangladesh, especially among marginalized populations and youth. The local small and medium producers in Bangladesh usually sell their products to middle man or big companies and sometimes for which they don’t get justified price in accordance to what the consumers pay to get those. There is no channel still prevalent who connects this local and home grown producers to the existing retail network. Even if they reach the retail there is absence of low cost platform to aware the customers about SME's products and thus there is no pull or off-take on such products from consumers in retail. Thus retail loose hope from these local producers and don’t store their product. All present E Commerce platforms in Bangladesh operates in their own inventory for which existing retail network has no access to online which restricts a low cost communication platform to push the retail inventory and cash them out. In addition to that, the retailers do not have presence in any online media to reach to the end consumers with their existing inventory thus restricting consumers to get their desired products delivered at home within quickest possible time. 

Shopway as a platform has three stakeholders: 

1. Local Producers 
2. Retail 
3. Customers.

Almost 47 percent of the total population works as local producers around Bangladesh and there are nearly 446 medium-sized food manufacturing enterprises in the country processing baked goods, confectionery items, fruits and vegetables, cereals, dairy goods, fruit juices, and various other foods and beverages lacking good distribution network and access to customers generating awareness. While we connect the producers to retailers roughly there is almost 1.5 million retail outlets all around the country operating in general trade and 0% of them has any presence in online media. Shopway, at the very first phase is working on connecting customers with retailers on small geographies and also piloted some field research with Fish producers in south to connect them to retailers. Customers now have access to retailers’ inventory in the areas we are operating, they can order the product and we deliver the product to them in quickest possible time practically less than an hour. 

Shopway is an online platform for the producers to retail their product and also for all the customers for on-demand home delivery solution for necessary products. It will be a bridge among the small and medium producers, retailers and customers eliminating maximum numbers of intermediaries. For the 1.1 million urban households, Shopway Consumer app is an alternative solution for convenient necessary shopping. Subsequently, producers can put their inventory in the Shopway Producer App and connect with the retailer via Shopway platform. In this process, we want to digitize the biggest spending trend of households by bringing 1,500,000 offline retailers having their inventory present online and local producers having access to reach the retail directly and be more customer-centric through adequate consumer data and real time retail inventory. The platform facilitates producers’ product to be distributed to retail to ensure maximum availability within the infrastructure and also ensures the product offtake from retail to customer by pushing them online. This whole process reduces the per unit distribution cost significantly for the small local producers and help them grow. In the whole process we are generating huge amount of tertiary level customer data which would help the producers to identify and reach the prefect customers for their product with very low cost. At the end we want to see local Producers having a tool to directly communicate to both retail and consumer. Through the journey, a consumer orders via Shopway Mobile app and gets the desired product from the 5000+ product offerings delivered at home from nearby retail by a Shopway Deliveryman. Similarly a Shopway Retailer can put an order to the producers around the country for their required inventory. The process is a hyper-local (Locally generated demand supplied locally) on demand solution connecting via mobile app. Currently Shopway Consumer app is live in two particular geographies in the Capital of Bangladesh.

In Bangladesh there is still no online platform connecting the existing retail infrastructure with both producers and consumer in a single place which also drives us to say we will be the first platform to bring up the retailers inventory online. While as a platform we don’t have our own inventory this gives the opportunity to deliver the ordered goods as fast as 30 minutes collecting from the local retail shops with lower delivery charge whereas the other industry players at least need 2 hours and minimum 60 taka charge to deliver those. So from customers’ perspective they will get their desired products in quickest possible time and retailers to cash their inventory fast with producers the access to reach the retailers and customers faster than any other traditional channel. While in the country’s 48% spending mostly rely on offline retail, there are tremendous possibilities for bringing them online and a 40% idle population of home growers and local small producers remain neglected from a low cost digital distribution network via retail. As of now, the end users’ consumption data remain unpublished in any specific medium,  Shopway can provide a platform to validate those consumption data and utilize to make distribution of products in a more targeted and low cost way. Moreover, integration of Digital payment will help us to digitize a vast amount of total household spending all across the country. 

Shopway is designed to solve problems of three stakeholders. 

Producers: Producers today don’t have any good platform to connect with retails, whereas through our platform they can either label them separately or join our private label to directly reach to the retail shop. This will avoid them reaching out to intermediaries and thus increase their part of the revenue. While their product reaches the retail shop they are exposed both online and offline which ensures a higher possibility of off-take. 

Retailers: While retailers today in Bangladesh just sale offline limiting sales within their block but being present in Shopway, their inventory goes online and thus exposed all the customer registered within the locality and thus having an increased sales. Retailers have to accept smaller margins from Corporations due to their quick off-take while Shopway helps and promotes their inventory, they become more confident about products from local producers ensuring greater margin to the retailers.
 
Customers: Customers shifting towards online need platform which will bring them food and groceries on demand and fast. Other players in the market operating with own inventory need to collect their product from designated places which increases their lead time. For Shopway we ensure to pick up products from the retail shop within 15 minutes distance to delivery address reducing the lead time significantly and solving the prompt demand.

We have served over 1300 households and more than 50 retailers within the last 5 months. These 50+ brick and mortar retail shops consists of grocery stores, fast food and fresh vegetables seller. We are currently building the chain of retailer and customer. As soon as its ready, we'll create the bridge between producers, retailers and customers. We expect to reach 1,00,000 Customers within 1 year of our operations with a 10,000 retailers and restaurants as our vendor. We want to also connect to 300 local producers by one year. If everything goes according to plan we want to expand our business pan Bangladesh by next 5 years with vision to expand our business in Myanmar and similar economies as Bangladesh. We will be targeting a customer base of 500,000 with 100,000 retailers and restaurants on board. We will be partnering with 10,000 producers all over Bangladesh with a vision to get 40% female producers in our platform. 

Shopway as an organization wants to digitalize one of the biggest spending trend in Household of Bangladesh by next 5 years. By connecting 20 million Customers from urban and suburban regions of Bangladesh, we want 48.5% of total household spent on food and beverage to be digitized. We want to connect and build a digitize community of producers and among them 40% female to facilitate these small entrepreneurs to have a designed digital product lifecycle. From the organizational perspective, to serve the ecosystem, there will be creation of jobs for postal services, integration of small producers and alternative channels for offline retailers. Replication of such business model can generate opportunity for every stakeholder from the entire ecosystem. Now in five years span of time, there will be competitions in the market with similar modality creating an industry for alternative channel in FMCG e-commerce, postal delivery service industry and SMEs and home producers. Also the end consumption data still remain unlisted in any platform, Shopway and similar business like Shopway can generate massive consumer centric data which would help the producers to design and reach specific customers and overall decrease the per unit distribution cost to them.

In spite of current population shifting online, it is a big opportunity for us but connecting the mass retailers and educating them to be part of the digital distribution is a barrier. We would have to educate them and show them the potential of using the platform in subsequent steps to ensure they get used to the platform more organically. 

Eliminating intermediaries in the present Eco System to connect to producers directly will also be a challenge and we need to work in rural ground level and educate them so that the producers become spontaneous to join our platform seeing their own benefit. 

Acquiring customers in the whole journey will also be a challenge and also habituating them in the platform as postal delivery from e-commerce still limits in niche categories of personal care and electronics, daily necessities remain a tough shield market to penetrate. However, the need for such convenience is in growth stage.

Educating Retailers: We will at first provide the retailers app where they only receive the order from the customers and arrange it for the deliveryman to deliver. By this we will be educating plus show them an incentive to why using our app will be beneficial for them. Then we will introduce them to how they can order through our platform and educate them on ground so that they understand we are giving them the best deal. We would not hurry rather make it organic so that they stick to our platform. 

Eliminating Intermediaries: Initially we would try to connect the producers through local agricultural firms and educate them on organic production of goods, meanwhile we will appoint people in root level as Account manager as a contact person for each producer within geography. The Account manager would collect the product from the producers and connect it to retailers. When we establish this whole supply chain this will eliminate maximum intermediaries increasing the revenue at the producer’s end. 

Acquiring Customer: At the very first phase we will be acquiring as much as customer to generate the pull from the market. As population is still not habituated to FMCG  eCommerce so we have to gradually make them a part. From operational point of view we would try to maintain 30 mins delivery time as we collect from nearby partnered retailer and serve the customers need as quick as possible this would gradually make customers more reliant to our platform.
 

We have 19 people in our team including the delivery man who are constantly working in the field to satisfy the customers. 

Our founders are from different backgrounds including General Trade and Trade Marketing, Corporate and Regulatory Affairs, Technology and Software Development and Mobile Financial Industry. The combination of experience of our team made it possible to initiative. As the key stakeholders involves retail, customers and producers; it is customary having experience in trade and distribution. As technology is hygiene is such industry, having strong hold in operational level is the key. 

MFS has been revolutionary in case of Bangladesh. In fact, Bangladesh inhibits the largest MFS in the globe, having members from the said industry is a strong privilege to digitize the transaction in the retail industry. 

We believe the relevant industry experience of the team and willingness to create a disruption will be pivoting to solve the problem we have identified.

Currently we have partnership with three particular types of organizations or people. Firstly, we have partnership with two FMCG companies for which we are providing an alternative channel for their product off-take. 

From producer level we are connected with World Fish, UK Aid; and Oggro dairy for processed fish, dairy produce who collect them from local producers.  

We are also connected with area specific retail outlets. The numbers is more than 50 outlets from two different areas. Finally, we are in partnership with two homemaker from each locality who are providing cooked meal to customers through our platform. 

The Market Linkage Model best describes the business model of Shopway. By creating an omni-channel, Shopway is connecting the local producers, SMEs with the retailers and eventually connecting the retailers with the end consumers. In this process, Shopway creates the linkage among all the parties and create an alternative platform for end to end beneficiary. 

Currently we are taking a premium for the delivery from the customers. Customer spread specific amount of delivery charge according to different area. 

On the other hand, the retailers in agreement with our platform offer a percentage of commission from the total amount of products off-taking from their outlet via our channel. 

As the small producers are also availing a platform for their distribution, we can avail a percentage of discount from the producers level as well.    
 

Through this Market Linkage Model of Shopway, there are multiple revenue inflow channels. The primary revenue is the delivery charge from the end users and monthly subscriptions. Secondly, the retailer for whom Shopway would be generating an alternative sales channel will be on the basis of revenue sharing model. On the other hand, big producers and giant corporations can also use our platform as their alternative channel and build a digital distribution network. To scale up the business we are in need of 3.4 million USD of total funding until we become sustainable.

We would have to ensure 70% of our total capacity utilization to be cash positive. As per our projection, it will take 2.4 years to be cash positive and will not require any further cash inflow. Later on it will require more 1.8 year to reach break-even point. 

Additionally, the end consumption data can be capitalized for larger conglomerates and premium retailers with their product placements and optimal reach. 

While applying for Tiger Challenge, we set three particular objectives. Firstly, we believe Tiger Challenge is a platform to validate whether our idea and execution wise we are in the right path or not. As the Bangladesh Market is experiencing a paradigm shift, it is in fact a great challenge to gather industry opinion about an idea. Also the application process for Tiger Challenge was so rigorous that helped us scrutinizing crucial agendas from our business and shaping them accordingly. We believe, Tiger Challenge will provide us the platform to collect opinion and directives from the industry experts.  Secondly, if we get selected, it will be a great privilege for us to avail the mentorship from the expertise from the platform. Creating a disruption succeeding over existing scenario is not possible without the guidance of the experts and opinion leaders. Such mentorship from a global platform can be pivotal in case of a start up like ours. Finally, as we are piloting our idea and planning to raise funds, Tiger Challenge in fact a great opportunity not only to acquire the funds but also to come into the focus of the other potential investors. 

The partnership possibilities are from all the involved stakeholders  from the ecosystem. Nemely, the local producers, 1.5 million retail outlets and the corporations that produce FMCG. For money movement in the ecosystem partership with payment service providers, to be specific banks, plastic money and mobile financial service will be pivotal.