How Kiksha Is Pushing Growth: Q & A With Zeeshan Kingshuk Huq
Kiksha, the lifestyle products focused ecommerce platform, is one of the fast-growing ecommerce startups in Dhaka. The company came into existence when Zero Gravity Ventures, the parent company of Kiksha.com and B2B marketplace Sindabad.com, acquired Biponee in 2016 and rebranded it to Kiksha. Over the past months, the company has grown manyfold. It has expanded its merchant base from a mere 70 to over 300 and grown daily orders significantly.
We recently sat down with Zeeshan Kingshuk Huq, CEO of Zero Gravity Ventures to dig deep inside Kiksha and its growth strategy. While there is a seeming stagnation in the growth of overall ecommerce industry, Kiksha continues to grow at a rapid pace and is one of the few leading players in the sector. The company has executed some ingenious strategy to push the growth and applied some bold measures to offer a frictionless shopping experience to its users. In the coming years, the company plans to become the complete solution for your lifestyle products while also making it an amazing shopping destination.
How much has Kiksha evolved over the past year?
Zeeshan Kingshuk Huq
Our initial plan at Zero Gravity Ventures was to operate in the B2B space only. Hence, we started Sindabad.com. Our assumption about B2C was that the market is already quite competitive and we would not get into a sector which is already populated. But as soon as we started walking the path, we realized that there is a gap in the B2C market and there is room for more good players. That’s when we decided to get into B2C space.
Once we made the decision, we wanted to start as quickly as possible and decided to acquire an existing company. After much discussion, we ended up acquiring Biponee.com. Biponee.com, at that time, was one of the five big players in the B2C ecommerce space. It had a solid customer base with repeat purchasing behavior, a nimble and solid team and a good pool of merchants. We thought it was good a fit for us to acquire and then grow.
After that, we conducted a market study in order to expand it and to understand customer perception of the brand. After the study, we rebranded it to Kiksha based on the feedback, a name that denotes superb [kickass] customer service. We are yet to do a formal launching for Kiksha.com. We did a soft launch and it has been close to nine months now.
We have been seeing a phenomenal growth since October 2016. We have expanded our merchant base from a mere 70 to over 300. Considering all things, our volume has gone up by almost 600% and orders has also grown by similar Ratio. We have rebuilt the team. In terms of the number of orders monthly, we are the third largest ecommerce in our model.
We are an inventory led online shopping platform. We have a hybrid model. We maintain an inventory and for many products, we have merchants with ready stock at their end where we keep regular track of inventory and whenever we get an order we fetch it from the merchant and deliver to our customers.
Our monthly turnover has already crossed eight digits and our average basket size is over BDT 5000.
Currently, we have more than 18000 SQs, we want to take it to 100 thousand by the end of 2018 so that customers can get all possible options on Kiksha.
How would you define Kiksha?
Zeeshan Kingshuk Huq
Kiksha is an amazing shopping destination. The idea is to become the complete solution for lifestyle products while also making it an amazing place for people to come and shop.
When you don’t get enough time for shopping you can check out Kiksha for great deals. We offer products for all your lifestyle needs, starting from lifestyle products for women and men to home appliances to decor products to gadgets to mobile and laptops and anything and everything related to lifestyle.
There are endless complaints against ecommerce and f–commerce companies, starting from fraud and fake products to delay in delivery and poor customer experience. How do you see this problem? How is Kiksha addressing it?
Zeeshan Kingshuk Huq
There is a Catch 22 situation. There are some solid reasons why B2C ecommerce has not expanded in the way we wanted it to expand over the past years. First thing is trust, customers have to have the trust on online shops that when they see something on screen they would be willing to place an order.
And the second part of this process is that customers should have the trust that if they place an order they would get the exact same product delivered if they don’t get the product they would get a refund and if a product does not match in size or specification, they could return and change it.
But the reality is such that, thanks to thousands of f-commerce and online sellers, online shopping has not been a good experience for many shoppers in the past and even these days.
There are sellers and f-commerce companies doing great work but there are others who caused bad experiences for many shoppers. There are celebrities and common people openly discussing their dissatisfaction or bad experience with online shopping. This has taken a toll on the growth of ecommerce.
I personally think that businesses have to take the responsibility to earn the trust of customers. First of all, we have to be patient and we have to consistently deliver on our promises.
Consistency is an important point here. If you are going to do it once and then go back to your default mode of mediocrity then that is not going to work.
Cashback and discounts are not going to help sustainable growth. We should remember that if you bring customers with cashbacks and offers and then when it comes to delivering the value you don’t keep your promise then that is not going to work.
Businesses should be transparent. If you can’t deliver something on time you should not claim that you can, if you don’t have the product in stock you should tell it upfront to your customer not after receiving the payment from customers.
At Kiksha, we maintain this strictly. If a certain model of phone is not available we will not show it on our site. But there are sites that take the order regardless and buy time from customers. Consequently, customers often get frustrated.
In our case, we tell our customers up front if we can’t deliver on a particular thing, be it the availability of a product or anything pertinent to our service. As a result, we have customers who returned to us because of our honesty and transparency. As a business, it is our responsibility to be transparent with customers and be honest with them. At Kiksha, we have taken the step and we will continue doing it.
Another thing is that the industry does not have a policy. There is no place where a customer, if he is aggrieved, can lodge a complain and get a remedy which is not the case for many other industries. In online shopping, customers can’t have a solution for problems they face. In fact, there are businesses who don’t have trade license or legal status.
In order to make the sector grow, we will need to have a policy in place which I know the government is working on. Thanks to extremely hard working hon’ble minister Mr. Palak and Ms. Tarana Halim, we have been able to work with both the ministries, from BASIS and eCab, and the ecommerce policy is underway which I think is only a few months away from us. If policy comes into effect and some of the disputes are resolved nicely then trust issue will get resolved and people will trust ecommerce more.
At Kiksha, we maintain a very honest relationship with customers. If we don’t have a product in our stock, we tell them upfront that we would not be able to serve it. If a customer wants a refund we do that as soon as possible. It has helped us to build a relationship of trust with our customers and now we have a growing number of returning users.
Do you anticipate a price war in Dhaka’s ecommerce sector? What are your takeaways from the things that are happening in India?
Zeeshan Kingshuk Huq
E-commerce is an investment-hungry business, no doubt about it. The investment gets justified once you see revenue coming in. More importantly, orders and repeat orders are coming in. For us, we can see that there is a repeat order of more than 25% which clearly indicates that there is a future.
In ecommerce, theoretically speaking, in every vertical one or two companies will eventually survive, everyone else will die. In grocery, there will be one or two companies who will survive, in lifestyle and other verticals this same pattern should follow. In that scenario, everybody wants to bleed as much as possible in order to stay in the game.
We have taken a slightly different approach. We don’t encourage selling things absolutely at loss. We are not keen on matching retail price fights. We have seen that at the end of the day service matters.
The example I gave you of a customer who came back to us just because of our honesty, that’s what we want to keep doing. Price often doesn’t vary much. You can’t drastically reduce the price. So we believe if we can continue delivering best possible service, we should win in the long run.
The other thing is the customers you get through cashbacks and offers, they don’t come for a lifetime rather for a short period of time. Customers who stay with us are the customers who really like us and our service not the ones who are here for an offer.
We should look at the lifetime value of a customer, if we bring a customer who is only a one-night-stander and only come because there is an offer and then never come back again, if 25-30% of my customers are not returning buyers, then I’m doing something wrong.
We have already seen this thing to happen in India. Today, VCs are revising valuation of Indian startups. At the end of the day, you will see that these things will happen in Bangladesh. Now investors will not make the mistakes twice. If they already burnt their fingers in India, they are not going to burn their fingers in Bangladesh. They will be cautious. The good thing about Bangladesh is that investment ticket size is small. Still, investors are not going to make the same mistakes twice.
It will be good for the entire industry if we realize that there is no need to go into a price war in order to grow rather if we continue serving customers well then there is a business for everyone. The market is quite big. The ecommerce fashion industry is currently less than 2% of the retail fashion industry. We have 98% more to go. Growth is good but growth at any cost might cost you the business at the end.
Do you think there is a stagnation in the ecommerce sector?
Zeeshan Kingshuk Huq
We are clearly seeing a growth in numbers.
I think two things have happened: one thing is when trust factor gets plugged in, that is a fantastic thing. But in order to earn the trust, we have to do a lot of things.
The another thing that I personally found interesting is that majority of the people who are currently buying online don’t have the credit card/money and the people with the credit card and the money, they are not buying online, they are going to the retail outlets.
More interestingly, they are paying far more in the retail outlets albeit without knowing that they could get a better deal online. I think this is one of the biggest gaps: people with the money are not buying online.
What is the catch here?
Zeeshan Kingshuk Huq
The catch is we largely failed to attract the cosmopolitan, moneyed and middle-income group to online shopping, which may be the largest shopper group. We concentrated on outside Dhaka, we focused on t-shirts and cheap stuff.
We never thought a person would buy expensive Kurti online. We thought they would prefer to buy TK. 400/500 worth of Kurti. We thought that people are only going to buy a 300 TK t-shirt, we never thought that a quality t-shirt of TK 600 could actually be sold. We never thought that TV can be sold online or phone could be sold online and the likes. Although things are changing now, that drove away a lot of people from online initially.
We introduced EMI for the first time at Kiksha. It was a major trust seal for us. As soon as banks come along with us, it increases our reliability in the eyes of customers.
The second thing is when a company offers EMI which is the next level of attachment then the logical conclusion is that the company must be a very matured company.
At the same time, we are getting into joint promotions with the banks where we are telling a very specific set of customers that if you buy this or that from Kiksha you get this benefit. Which means we are spending our ad dollars in reaching out to a very specific set of customers in a very specific way.
Once we did that people started to pick up. Today, around 2% of total ecommerce payment is happening through credit card and another 2-3% through bKash. For Kiksha, it is over 23% over the last quarter. You can clearly see that our effort with banks and others are paying off.
I will give you another example in the same line. We had a problem with product returning. At one point, one fifth of our products was being returned from outside Dhaka orders. Sometimes products were not even picked up from the distribution center or courier service center for not days but for weeks. We thought how do we handle this.
After much thought, we announced that if you are placing an order from outside Dhaka why don’t you make an advance payment through bKash. We have made payment super simple. We have a couple of bKash merchant accounts, thanks to bKash and we also ran a small campaign with bKash to promote it that if you pay through bKash you would get cashback which was an incentive for the customer for paying through bKash.
The last thing that we did was that for every order from outside Dhaka a customer has to pay 200 TK or 10% of the product price in advance through bKash. Our order took a nosedive after the announcement and my team was frustrated.
We stayed like that for about a month and a half and after that order slowly started to pick up again and it bounced back. Today our return rate from outside Dhaka is less than 6%. People are buying phones up to TK 29000 paid fully in advance.
We had to embrace difficulties and make hard decisions in order to get here. We had to take the bullet and suffer through it but finally, it paid off. If we did not do all that things and if we did not have a full-time call center in place just to explain to people that sir you don’t have to worry, we do this, this and this, I think we would not see the growth that we are seeing now.
What are the major challenges for Kiksha now?
Zeeshan Kingshuk Huq
One of the challenges is of course onboarding more brands. In Bangladesh, the majority of the brands are not ready to get into online business yet. There are brands who have their own sites and as well as selling on Kiksha.
They understand that where their site attracts a few hundred visitors a day, we attract nine thousand visitors a day. This is important for people to understand.
The idea is more like having your own shop but having it in the mall. In this instance, the mall is Kiksha. But that mindset is not common with all the merchants yet. There are merchants who don’t see that is happening. There are brands who don’t want to come on board with us.
The other issue is that there are brands who expect that they will be selling a lot of products from Kiksha from day one. That does not happen. First few months are growth months, you should not expect that you will be having lots of orders daily. But there will be a time when you will have daily 15/20 orders.
I think there will be a year when every merchant will have hundreds of orders from various ecommerce sites. But the brands are not ready for that yet. I think the market will take a little bit of time for that to happen.
The payment industry is not fully ready yet to support ecommerce ecosystem. In India and other markets, banks and other players helped tremendously to grow the ecommerce ecosystem.
In Bangladesh, we would need similar support. Although the market for ecommerce is not big yet but it will grow manyfold if we get the support. There are a couple of banks who are having special ecommerce focus, at least two banks are very serious about ecommerce but there are 54 other banks who need to come forward. Payment solution companies also need to come forward. They need to find out ways to make payment simple.
Another challenge obviously is trust and f-commerce and the maturity of the overall ecosystem. I’m not trying to blame or discourage anyone but if a consumer is not served well then that is going to come back to the entire industry not only to that particular company. If someone has a bad experience buying online, no matter from which company, he/she is going to blame the entire industry.
What are you doing to get more merchants on board?
Zeeshan Kingshuk Huq
Since we maintain a hybrid model, quality control is critical for us. While onboarding merchant we try to maintain a process in order to ensure quality.
We have a dedicated team who are responsible for merchant acquisition. Our team has a monthly target. They go and check out merchants and get them on board when they see a merchant fit with us. They try to get as many merchants on board while also equally putting importance on the quality.
How does your entire product delivery process work?
Zeeshan Kingshuk Huq
In some cases, merchants send us inventory which stays with us. Every two/three months we reconcile to see what product has been sold and then we replenish the inventory on a periodic basis.
Some of the merchants go by almost real time inventory update which means they update inventory every night or every day at a certain time but the inventory stays at their point.
In some instances, we pre-pay the merchants and inventory stay at the merchant end, especially when we get into a campaign with a target to sell a certain number of products and we make sure that we have the inventory ready for that.
Whatever the case, we do the delivery by ourselves or our appointed third party logistics partner. It is never going to be delivered by the merchants. We want to make sure that we control this part of customer experience.
We have a small team of delivery people. For high-end products, we deploy our own people and we have trained personnel who are good at installing products like TV and other products.
For small deliveries, we deploy third party logistic partner. There are a couple of partners we are working with. Our scale is growing and we are having more delivery partners, probably we just signed our fifth third party agency.
What are the strategies you have applied to drive growth?
Zeeshan Kingshuk Hug
You need to have a very good team. We have a great team. We have got team member from Flipkart because ecommerce is fairly new in Bangladesh and we needed to have the know-how. Most of our other teammates have experience in ecommerce. I think that’s one thing that helped us.
The team needs to be very solid and then it needs to be backed by strategic data analysis and monitoring.
And the most importantly you have to continuously surprise your customers with better service. Even before your customers asking for something it needs to be on my site.
I can tell you by March we will launch seven new products on our site none of which are available elsewhere. Every two weeks we are launching something to surprise our customers.
At Kiksha.com, we ensure the best possible service for our customers. In almost every decision that we make internally, we maintain a very meticulous and well-thought out process.
For instance, we only add a category when we know that we can serve the category in full. Let me give you an example: our latest product addition is laptops. We have now over 200 types of laptops on our site.
Before launching the category, we asked ourselves that where do people go to for buying a laptop. Not our competing sites but where do the majority of people go to buy a laptop. The answer for a vast majority of the people is either Elephant Road or IDB. Now when we decided to launch this category we decided that we will have 87% of all laptops that are available in IDB and Elephant Road.
We know that people are not going to buy all the laptops but we wanted to ensure the comprehensiveness of the category so that when a customer comes in he/she can see a lot of choices because customers often want to see a shop full of products. They want to see that all the options are available. So we keep all the collections. Not only that you can order all the laptops that are available and we will be able to deliver you.
The third is price competitiveness. This is where we feel we have done very well. Our prices are at par with the market, so there is no downside. However, the difference is that you can’t get EMI in IDB or you can get it for an additional price but on Kiksha you can get EMI with an all inclusive price. That is the difference where a customer decides that I’m going to check products in IDB or somewhere else but I’m going to buy it from Kiksha. And the convenience of home delivery is always there. We just sold a Macbook Pro recently that was paid for fully online and that was too from outside Dhaka.
What we are trying to do is that we are giving you all the options that you would get in a physical store or somewhere else and then in addition to that we are giving you a reason to buy from Kiksha by giving you EMI or the convenience.
A laptop is a laptop regardless of where you buy it from. As long as it has the original warranty and everything and the price are same you can buy it from anywhere.
What we are doing is, we are giving customers an additional reason for buying from KIksha. For the laptop, EMI is probably that for us. For other products, say for instance Flower, convenience itself probably is the value proposition.
On Kiksha, you can schedule your delivery. If you want to wish someone on a particular date and time, you can choose the date and we will take care of the rest.
The strategy is we are going to offer you anything and everything that is available offline and with a reason to switch from offline to online. Now this ‘reason to switch, the value proposition, might not be same for all the categories but for every category, we will give you a reason.