PRAN-RFL, country’s one of the biggest and fastest growing conglomerates, launched its own ecommerce marketplace Othoba.com later in 2015. Although a relatively late entrant to the market, Othoba has grown quickly over the past one and half years and has become one of the key players in Dhaka’s ecommerce industry within a short period of time. Othoba now plans higher. PRAN-RFL has an incredible reach all over the country. The company’s distribution network has penetration even to the deep rural areas which if utilized properly can offer a significant advantage to Othoba in a market where logistics is a big challenge for ecommerce beyond big metropolitan cities.
We recently had an opportunity to sit down with Ahsanul Alam, Head of Operations of Othoba.com to know more about Othba.com and ecommerce industry in Bangladesh. In this interview Mr. Alam recounts his serendipitous journey to the ecommerce world, discusses the beginning and current state of Othoba, challenges and opportunities for the company, competition and state of e-commerce in Bangladesh, talks about the ambition of Othoba and the importance of leading by example and why showing is far easier and effective a way to lead than asking people to do things. ~Ruhul
Future Startup
Tell us about yourself and your journey to what you are doing today.
Ahsanul Alam
I was born and raised in Dhaka. I studied class one to five at Mohakhali T&T School and then attended Government Science School and College for my SSC and HSC. I did my bachelor from Jahangirnagar University where I studied geological science, absolutely different discipline than what I’m doing today.
Although I studied Geology, I was not particularly passionate about the discipline. In fact, while studying Geology, I was searching what I wanted to do in life. Gradually, I developed an interest in the corporate world, largely influenced by a senior brother in our T&T colony who used to work at Grameenphone, and wanted to start my career at a multinational company.
Right after my graduation, I joined Banglalink where I worked for two years before moving to Coats Bangladesh. During this period I started to lose my interest in the corporate world. I used to be involved in the day to day activities only. There was little to no chance to do my stuff in my own way. I was not doing anything meaningful that would allow me to leave my footprints when I would leave the job and that was not my purpose.
So I left Coats Bangladesh in 2010 without finding another job. I was looking for something where I could make a meaningful contribution.
Around the time I left Coats, Raisul Kabir, CEO of Brain Station 23, offered me to join at Brain Station to help him with HR and developing process and systems at his growing IT company. I and Raisul Kabir are school friends. We went to the same school and grew up in the same locality.
Brain Station was growing fast but was struggling to manage everything. I thought since I’m not doing anything I could take the opportunity. I did not take it as a serious role initially rather as a consultancy type position. Neither I nor Raisul thought through it much. When I started working, I slowly began to enjoy the work. I learned from Raisul a lot about the IT industry in Bangladesh.
While streamlining the HR, we were also considering other opportunities to explore. Ecommerce was not a thing yet but it was showing the early sign of potentials. That’s when we decided to launch an ecommerce venture and subsequently, Biponee.com came into existence.
We did not start Biponee.com right away. We initially did some experiment on Facebook to see whether people buy online or not. After a few experiments, we decided to start with t-shirt because people buy t-shirt round the year. We thought that mainly young people would shop online and that it is only wise to start keeping their preferences in mind.
We started as a marketplace where we would take a commission from merchants for every sale they make. We went into collaboration with some T-shirt manufacturers. Initially, it was not a hit but gradually it picked up. When we started we, in fact, had to pay our sellers despite the fact that no sales happened on the platform because if we had told them that no sales happened they would not stay with us. But we were convinced that people would buy things online so we had to keep our merchants interested.
We officially launched in January 2013 and became quite popular for t-shirt within a very short time. 2013 and 2014 were really good years for us. After that competition started to come including a bunch of foreign investments. All of them started to spend heavily in the market which started to affect our business. We were investing a monthly amount from Brain Station and expecting to break-even by 2016 which we soon found out that was not going to happen.
We started to look for investment. We had some opportunities but our business was going through a little rough patch. At that time, my family was also asking me to take a more stable job and I and Raisul were also having some misunderstanding. Due to all those things, I decided to leave Biponee.
I left Biponee in 2015 and joined PRAN RFL group to start their ecommerce. When I joined here the initial preparation was almost done but Othoba was not launched yet. We then put things together in the next couple of months and launched Othoba.
Ecommerce is a completely different business than any other business of our group. It was a big leap for PRAN-RFL as a group as well and our management has been extremely supportive and flexible to Othoba team.
When we started Biponee in 2011, ecommerce was a relatively new sector. The market was open and you could easily stay ahead of the game. In 2015, things were different. There were already established companies in the market. It was a challenge to find a place for us.
Initially, we thought about selling our own products through Othoba, an alternative sales channel for PRAN RFL, and at the same time an entry to the ecommerce industry through the process. That’s when we came to realize that this could be our differentiation point because you could not find PRAN RFL products anywhere else.
The second thing that we wanted to do was around service. We wanted to provide the best possible shopping experience to our customers. We started with a plan to ensure the fastest delivery in Dhaka. We are yet to get there but we have done significantly well.
Our goal is to ensure value for money for our customers. Positioning wise, our ambition is to become the destination for quality services and products at a reasonable price. We understand that this is a journey and we are trying our best.
Future Startup
Can you give us an overview of Othoba? How much has the company evolved over the past years?
Ahsanul Alam
We have currently over 550 categories, 350 brands and 30,000 products including PRAN-RFL brands. All of our in-house brands can be purchased through Othoba. And more brands are in the process of joining our platform. We currently serve over 500 orders a day and we are a team of 40 people.
We are not exclusive of any brand or product. While we sell products of Vision Electronics, one of our own brands, we also sell Samsung, LG and other brands of electronics products.
However, in the fashion category, you would not find many prominent brands, particularly expensive ones, on Othoba which we did consciously in order to avoid the perception that we are for a certain segment of customers. We will add more of these brands in the future. Our goal is to be a shopping destination for mass people.
We have an in-house logistics team that takes care of our deliveries in Dhaka. We take support from our third party partners for outside Dhaka deliveries and also when there is a need. However, we plan to use our own distribution channels across the country very soon.
PRAN has an incredible reach all over the Bangladesh. It is hard to find a village where PRAN has not reached. If we can effectively utilize this strength we will be able to reach more people all over the country including deep rural areas where people really need ecommerce service.
Our management is highly cooperative. I must mention two names here, our group Chairman and CEO Mr. Ahsan Khan Chowdhury and Group Marketing Director Mr. Kamruzzaman Kamal. They have been extremely supportive and flexible to any change we wanted to bring in the business that helped us to evolve as per market demand over the past years. Their guidance helps a lot.
We maintain a flat organization culture with minimum bossing. Supervision is there but only to make sure that we are making progress. We encourage people to own their work.
[su_divider top="no" divider_color="#adacab" link_color="#edde29" size="1"][/su_divider]
A Message From G&R
At G&R, we work hard to empower brands in the digital age and help entrepreneurs and companies to tell their stories to 65 million internet users in Bangladesh through sophisticated targeting and our wide publishers' network. You may know more about us here.
[su_divider top="no" divider_color="#adacab" link_color="#edde29" size="1"][/su_divider]
Future Startup
What are the challenges for Othoba now?
Ahsanul Alam
Ensuring timely delivery in a marketplace model is a challenge because it to some extent depends on the availability of the product at the merchant’s end. We are now planning to move to an inventory-led model where we will store 60-80% of our products so that we can better serve our customers.
We are also implementing a more rigorous process in onboarding our merchants. We only want to work with merchants who are committed and who deliver better service. For other products, we plan to work ourselves.
Logistics is a challenge outside Dhaka. As I said earlier, PRAN-RFL has a very strong distribution channel across the country, we are working on how we can take advantage of our distribution channel.
The long-term challenge I guess is to make people shop online. It is easy to say that we would reach to villages and all that but if we could not have people to shop online things would not change much. Building awareness is critical while also making sure that we provide satisfactory service so that people come and buy online.
Future Startup
How do you reach out to your customers? What are the channels and mediums you are using now?
Ahsanul Alam
We are not that big on marketing yet. A large part of our limited communication budget goes to digital channels such as facebook, GDN, and others digital mediums. Apart from that, you will see us in all of our group communication as a distribution channel.
On the other spectrum, we are focusing a little bit on activation and events. We are doing programs at different universities and we plan to roll out some more at different shopping malls and centers. We are also attending different fairs.
We actively control how much we push our growth because we have limitation and when we grow at a rate that we can’t manage well it causes customer dissatisfaction. Our strategy is to build capacity and then grow accordingly.
For us, ecommerce is a service business and we want to be the best service provider in the sector. People shop online for convenience. We want to make sure that our users receive the best possible shopping experience at the best possible price.
Future Startup
How do people work at Othoba? Can you please tell us a bit about Culture at Othoba?
Ahsanul Alam
We maintain a flat organization culture with minimum bossing. Supervision is there but only to make sure that we are making progress. We encourage people to own their work.
We are a relatively young team which means we are super energetic and dedicated to the work. We work hard to maintain a friendly work environment in the office.
To us team is more important than any individual. We seriously encourage teamwork instead of looking for outliers.
Everyone in the team enjoys a certain degree of independence and authority to make things happen. We are an open organization where everyone is encouraged to speak up and give feedback.
Future Startup
What do you think about the ecommerce industry in Bangladesh?
Ahsanul Alam
We are at the very early stage of the sector. The most important thing at this stage is to make sure that we build an ecosystem of trust and that we don’t take trust that our customers put on us lightly. If we can do that then we will have a solid future.
Ecommerce is an investment-hungry business. We are seeing a lot of small players coming to the space driven by a misconception that anyone can start an ecommerce company just by building a website. While I also encourage people to start things but I think this is an unhealthy approach.
Building ecommerce is way harder than building a physical retail business. Since people coming to ecommerce without a proper understanding of the business and the sector, many of these small businesses fail to deliver contributing to overall customer dissatisfaction. This has a lasting impact on the overall industry. There is no doubt that ecommerce has a great future but we have to make sure that we build a relationship of trust with our customers.
There is an overall lack of confidence in ecommerce in the market. People still are not happy about their online shopping experience and ecommerce companies have largely failed to build trust over the past years. It is true that our ecommerce industry has a long way to go but if we are not building it right, the days will be more difficult in the future.
We are an extremely ambitious company. Our group CEO and Chairman Mr. Ahsan Khan Chowdhury always inspires us to dream big and work hard. Our goal is to be the destination for every conceivable item that you need anytime and anywhere in Bangladesh at the lowest possible price which we consider we can become given the upsides we have with our distribution network across the country.
Future Startup
How do you think about competition?
Ahsanul Alam
The market is relatively big and we can’t develop it alone. We have seen international investment coming to our market and doing well and we have also seen that our local companies are also raising investment which is a good thing.
That said, I do believe that there should be a level playing field for the local companies. If we don’t facilitate the local companies to grow then we will not have a Flipkart or big local companies in Bangladesh.
We don’t want to think much about competition at this stage. For us, ecommerce is a service business and we want to be the best service provider in the sector. People shop online for convenience. We want to make sure that our users receive the best possible shopping experience at the best possible price.
Future Startup
What are the future plans for Othoba?
Ahsanul Alam
We are an extremely ambitious company. Our group CEO and Chairman Mr. Ahsan Khan Chowdhury always inspires us to dream big and work hard.
As a group, PRAN-RFL has been one of the fastest growing conglomerates in Bangladesh for the last few decades. We have some really great people and our directors and management think differently.
For Othoba, our goal is to be the destination for every conceivable item that you need anytime and anywhere in Bangladesh at the lowest possible price which we consider we can become given the upsides we have with our distribution network across the country.
Initially, our goal was to offer best possible service at any cost but gradually we realized that price is also an important factor to our customers. Now we are focusing equally on both. While best service is there, we are also working hard to offer everyday low price to our customers.
We started with our own products of which we maintain inventory. We currently don’t maintain any inventory for our merchants’ products instead collect from their end once there is an order.
It is hard to ensure timely delivery in marketplace model where you don’t control the inventory. We are now considering an inventory-led model where we will maintain a conservative inventory of a significant number of our products, 60-80% of our products. This is a risky move but we think this will significantly improve our capacity to serve our customers better.
Future Startup
What is your management philosophy?
Ahsanul Alam
My thinking has evolved significantly over the past years. It is important to me that I empower my teammates and delegate work. Instead of doing everything myself I delegate and supervise where needed.
We should always lead by examples. Showing is far easier and effective a way to lead than asking people to do things. We should not expect something from others that I don’t do myself.
Future Startup
What advice would you give to people who are just starting out?
Ahsanul Alam
Before starting a business you should properly do the math and understand the industry.
People who want to start an ecommerce or any other business for that matter should start with identifying a niche and start small. Starting a big marketplace is often expensive and hard and you should not do so unless you have a really strong base in management and investment.
We should always lead by examples. Showing is far easier and effective a way to lead than asking people to do things. We should not expect something from others that I don’t do myself.
Professional relationship and personal relationship should be maintained separately. Although they intersect often, but it is important that you remain mindful of how you manage both.
We live in an extremely fast paced world where change is the only constant thing. In order to stay relevant, you have to learn every day. Learning is everything.
