Since launching Pickaboo in 2016, Shahrear Sattar and his team have successfully positioned it as a leading e-commerce company in the country, from what began as a modest operation of a few people. Pickaboo is now a team of over 140 people. It has a widespread brand awareness in the market as a reliable e-commerce company that delivers and ensures proper customer service.
Pickaboo originally started with selling high-value electronic products, particularly mobile phones. Within a short period of time, it became the market leader in the category, a position it continues to maintain these days. Over the past two years, it has expanded to other categories. It has increased the number of products it offers within the electronics product category as well as added new product lines including daily needs, albeit in the electronic genre, fashion and beauty products. The company is now eyeing further.
We have been following Pickaboo from the very beginning of its journey, we first interviewed Mr. Sattar in January 2017, you may find the interview here.
In this fascinating interview, Ruhul Kader sits down with Shahrear Sattar, CEO of Pickaboo, to learn about the developments at Pickaboo over the past years and to pick his brain about the current state of Pickaboo’s business, expansion, long-term strategy, what has contributed to its rapid growth, and the future of Pickaboo and ecommerce industry in Bangladesh and his lessons from the journey so far. This is a brilliant read and a feast for your mind. Enjoy!
Future Startup
How much has Pickaboo evolved since we last spoke - what was your operation look like a year ago and what it is now and what are the major changes?
Shahrear Sattar
The biggest difference which has had a major impact on our sales, revenue, and service is that Pickaboo has completely switched to original products. We now sell products of only original brands and distributors and collaborate directly with them. In fact, we are the only major ecommerce brands to do so.
This does not mean that we did not work with brands directly in the past or we sold products of compromised quality, but that we also worked with small suppliers who could provide products at a competitive price alongside brands and authorized distributors of different brands.
This has been one of the biggest changes, so far. And it has turned out to be a wonderful change for us although it does put us in an uneven competition with many other competitors in the market.
We are a long-term player. From the very beginning, our priority has been ensuring best in class customer service. A strategy which has served us well. Our existing returning user rate is over 26% and it has been consistently growing.
While we see a huge room for growth for us there [in terms of returning users], this number is still very unusual for an ecommerce company in a country like ours. It tells about Pickaboo's service level and commitment to our customers.
We are transparent with our customers. We ensure that we deliver on our promises. And when we fail to meet any promise we do everything to compensate our customers.
This has led to another development which is that we have added a few new verticals to our product line.
If you go to our website, you'd notice that slowly we are adding new things. This is an absolutely organic development. We have been forced to do that due to the pressure from our growing customer base who constantly ask us to extend product categories.
In the mobile electronics category, we have done a host of interesting things. Very recently we launched pre-booking which fairly new in our market. Over the past years, one consistent thing about us has been that we regularly introduce new features to make lives of our customers easier. We have built a culture of customer obsession and innovation.
From the very beginning, we operate in a very lean manner. We work extra hard as a team. And I believe we have managed to operate with maximum efficiency.
When we started, our people were mostly freshers and had very limited experience. Over the past years, the team has gathered experience and expertise. Now we are ready to take the next challenge.
Having said that, we have a long way to go in terms of developing our manpower. We are aware of the fact that we are doing pretty well in the current market, but the competition is likely to intensify and if so happens we have to as well prepare our people for that.
We already have a relatively savvy people plan. We have succession plans for our people. Each of them knows their career roadmap. They understand the essence of taking more challenges and so on.
We try to give everyone a complete picture of where they would be next year or in the next five years. I understand that they have to be able to realize why they are here. It helps grow a sense of ownership in people. The tradition of keeping this ambiguous from the employee is counterproductive; especially during the take-off period of a business.
In order to achieve growth, you need confidence and full effort of your people. And if a person cannot see his/her future at your organization, they are likely would not feel secure and would not be able to deliver at their best affecting your overall business. We have taken appropriate measure to address this challenge.
Our priority is to give people a career, not a mere job.
The result of this approach has been wonderful for us as a company as well for the people at Pickaboo. We have built a culture of collaboration and learning and continuous push. I see this as progress. As a team, we are ready to take the challenges of 2018.
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In the mobile electronics category, we have done a host of interesting things. Very recently we launched pre-booking which fairly new in our market. Over the past years, one consistent thing about us has been that we regularly introduce new features to make lives of our customers easier. We have built a culture of customer obsession and innovation.
Future Startup
Any other major change that you think is going to affect your business in the coming days? As you mentioned, working directly with brands and distributors reduce your advantage to offer a better price to your customers, how do you deal with that?
Shahrear Sattar
Over the past couple of months, we have had interactions with a number of stakeholders who take interest in our business and one consistent feedback we received is that our fundamentals are better than the expectation from a market like Bangladesh.
We are not profitable yet, that does not require a mention because everyone knows that ecommerce business is in the investment phase yet. However, over the past two years, we have been able to build a strong relationship with our customers who rely on us for products and services which has allowed us to have a better relationship with our business partners to achieve efficiency.
We can achieve better margins while offering standard market price to our customers because of this leverage.
In ecommerce, you can’t charge a premium to your customers because the price is an obvious point of competition but you can leverage your relationships with both customers and partners to achieve efficiency. We have been able to do that. That’s one aspect.
The other aspect is how you spend money. If you can derive the same amount of value spending less money, it doesn't matter who earns more or less. We have been able to control our cost and achieve a better result from our investments in every area.
We have built systems and our team operates in a super efficient manner that allows us to achieve greater result with limited resources.
Our team has grown over the time, but compared to our revenue curve the growth rate is much much lower which indicates that the level of productivity and output per employee has been increasing pretty consistently since the beginning.
This is what makes us different.
Now, this is no serendipitous result, we have consciously put the effort to achieve this goal. This is a result of our culture and how we work as a team.
Future Startup
How big is your team?
Shahrear Sattar
We are a team of 140 people now. We have been growing pretty fast, the size of the team is likely to grow in the next couple of months.
In ecommerce, you can’t charge a premium to your customers because the price is an obvious point of competition but you can leverage your relationships with both customers and partners to achieve efficiency. We have been able to do that.
Future Startup
When we spoke last time it was probably around 65 which means you team size has doubled. How have you been doing in terms of growth, speaking business-wise of course, compared to when we spoke last time?
Shahrear Sattar
We have been seeing a consistent growth over the last two years. In the last few months, we experienced a bit of slow growth because we did not push much. However, our existing customers continue to shop from us.
Given the reality of the market, your monthly growth should touch 30-40% because there is room for growth in the market.
Now in 2018-2019, if I'm not getting that 30% monthly growth, we're not taking advantage of the opportunities in the market.
At the rate market is growing, it will be challenging to achieve a monthly growth of 3% down the line a few years.
I would not give you an actual number but I would say we have almost doubled our numbers since we spoke last time. We could have grown even further if not for some internal issues that we have fixed.
Future Startup
Briefly tell us about the new product categories that you have added apart from your initial 6 categories within the mobile electronics and your reasoning behind it. What is the ambition product wise? How do you decide what category to add?
Shahrear Sattar
We have added a couple of new categories mostly around women products such as fashion and beauty. Then we have expanded our electronics products line adding daily needs where we sell basically electronics products that you may need on a regular basis such as light bulbs, home, and living accessories and a few others products.
The strategy for adding a new category comes down to a simple question for us: whether we are addressing a need of our customers. If a product is solving a pain point for my customers, we will launch it. And I believe when we address the customer pain point, business takes care of itself.
Future Startup
You have launched numerous programs to attract new customers as well improve retention such as loyalty programs, EMI, and others which our readers might not know about, can you please give us an overview of that as well as your strategy there?
Shahrear Sattar
We have pioneered online EMI in Bangladesh and now almost all major eCommerce players offer EMI option. We have also introduced Pre-booking options.
We have this service called FastPick where you'll get your order delivered within 24 hours. Over 40% of our orders are now FastPick orders. When we first introduced FastPick, we knew that it would be huge because a key factor in eCommerce is instant delivery. People order because they don’t want to fight traffic and can get the product delivered when they need it. We charge almost double for same day delivery, despite that people continues to order.
We have also introduced an option for customers living nearby called Click & Collect where you can order a product online and collect it from our office the same day. This has also become quite a hit.
We have added a couple of new categories mostly around women products such as fashion and beauty. Then we have expanded our electronics products line adding daily needs where we sell basically electronics products that you may need on a regular basis such as light bulbs, home, and living accessories, and a few others products.
Future Startup
There is a rumor that you are planning to get into grocery? Is there any particular category (ies) where you want to focus going forward?
Shahrear Sattar
We have run an experiment with Hero Honda recently selling motorcycle online. To our surprise, over 100 Hero bikes are being sold from our platform. When people found out about it, it clicked. Now we are getting bike orders every day.
This is happening because of the credibility of Pickaboo brand. Otherwise, ordering products worth 2 lakhs is not something people do easily. This is what we wanted to find out from that experiment; whether our customers trust us or not. You can see we have built brand equity that allows us to venture into different areas.
We have collaboration with almost all the banks who provide a credit card in the country and we give the highest business to our banking partners among almost all the ecommerce in the country. We do get the advantage of selling high-end products. Then and again, our customers trust us and pay digitally.
Over 40% of our transactions are card transaction. We started with high-end products, an strategy which has served us well over the past years and now we plan to explore other territories.
I would not say we are particularly thinking about getting into grocery. Our strategy has been getting into areas where we can solve a problem for our customers. And that’s the guiding principle here. We want to follow our customers where they want to take us.
One thing we will never do is that launching a new category solely to increase our revenue if it does not meet the needs of our customers. If there is a problem to be addressed, I'm sold. We’re serious about that.
Future Startup
In our last interview, you mentioned that you are a marketplace but not an inventory-led one. And now you do maintain inventory for most of your products. As a marketplace, having more merchants offer certain kind of leverage along with earning more but from the beginning, you decided to pursue a different path. Let me read back to you from our last conversation: “we now have 6 product lines under electronics category: mobile and accessories, computers and laptops, large appliances, small appliances, gaming consoles, and miscellaneous. As for merchants, we currently have limited number of merchants doing business with us. We strategically try to have more than one merchants for a particular product category in order to have flexibility. Other than that, the number of merchants is not a metric for us in that sense. We do merchant acquisition but we tend to maintain a process for that. We believe that having great merchants is critical for us.” Now that you have embraced marketplace model as well as maintaining an inventory, what’s your plan model-wise going forward? Do you plan to add more merchants or what’s the strategy?
Shahrear Sattar
We mostly sell high-end products that come from one or two brands. And we sell products from only original brands and authorized distributors.
Now there aren't many companies or distributors for a single brand which means for our current categories, we are good with our existing strategy which is working directly with the small number of brands and distributors.
If we were allowing merchants from different places to sell the same products then we might have to think about increasing the number of merchants since that is not the case now, we can afford to keep the number of merchants limited.
In fact, we have come to see that working with the brands and distributors directly allows us to have better control over customer experience and quality. We can ensure both quality and service for our customers.
Yes, we can’t essentially offer a price advantage to our customers because we are a proper tax paying legitimate business, but if we can build a customer base, which we have been able to build over the past two years, we can leverage that relationship for offering better benefits to our customers.
We have this service called FastPick where you'll get your order delivered within 24 hours. Over 40% of our orders are now FastPick orders. When we first introduced FastPick, we knew that it would be huge because a key factor in eCommerce is instant delivery.
Future Startup
What’s the plan going forward then? Do you see a future where you are basically a full-fledged marketplace with thousands of merchants using your platform?
Shahrear Sattar
We address society's need, as I have said before, and hence I think we will evolve according to the demand of the market as we keep on addressing society's needs.
When I first pitched eCommerce in 2013, I addressed the problem of mobility from one place to another. Secondly, after getting to a place, I can't be sure of the quality of the product I'm receiving, so we addressed that by ensuring quality products.
Then we ensured excellent customer service for our customers and so. We ensured on-time delivery, we launched services like FastPick and Click and Pick.
And finally, we thought that it doesn't end right after we sell the product, there might be a problem and I could be able to provide that solution for that as well, better than retail. So we ensure best possible customer services.
At Pickaboo, our principle is that we should never sell the products we ourselves would not buy.
Secondly, we must ensure best possible service to our customers. Now since we have come this far, we will evolve as we go.
As we are adding more categories, I think our model will also transform. Where there is only brand products, we will work with brands and where there are a good number of merchants we will do that too.
We mostly sell high-end products that come from one or two brands. And we sell products from only original brands and authorized distributors. Now there aren't many companies or distributors for a single brand which means for our current categories, we are good with our existing strategy which is working directly with the small number of brands and distributors.
Future Startup
You maintain inventory, how does that work?
Shahrear Sattar
Almost 60% of our orders are put into inventory. Our employees have their work cut out for them to maintain this.
The inventory that they bring in has to be paid for, hence putting it in our inventory is a cost. It is s challenge for the team that they have to bring enough sales to make the investment worthwhile. It improves the productivity.
Future Startup
You have your own logistics team, right?
Shahrear Sattar
Yes, we have a logistics team which is growing consistently. But we there are rooms for improvement.
We train our logistics people and ensure that they are compensated for their hard work because they are the representative of Pickaboo to our customers when they deliver products, we want to ensure that customers have a good experience with our delivery people.
We also collaborate with third-party partners when there is a spike in order.
Future Startup
How have you attracted the users and grown the business? And then how have you sustained the growth you have gained?
Sharear Sattar
In eCommerce, if you are doing the basics, such as keeping your promises, ensuring good customer services and maintaining commitment, you are most likely to succeed because there are enough players who are not maintaining the hygiene factors in the market.
Complains of customers not receiving a product after one week of placing an order and that too without any communication from the end of the seller are quite rampant in Dhaka. We have actively tried to avoid such incidents.
From the very beginning, we have worked hard to ensure best possible service for our customers and maintain a seamless communication with our customers.
First of all, when we receive an order, we make sure that we deliver it on time. If we fail for some unavoidable reason, we immediately inform our customers, arrange a refund and apologize and offer alternatives.
Secondly, we have regularly introduced new services and products to make lives of our customers easier.
As I mentioned earlier, we introduced EMI for the first time to bring customers to our platform from a physical shop because that’s what we consider as our main competition.
Then we introduced FastPick, we introduced membership and loyalty program, pre-booking.
When you serve your customers, they give you business. We don’t worry about business because we know that if we make our customers happy they will return and that’s how you build a sustainable business and a competitive advantage.
In eCommerce, if you are doing the basics, such as keeping your promises, ensuring good customer services and maintaining commitment, you are most likely to succeed because there are enough players who are not maintaining the hygiene factors in the market.
Future Startup
Pickaboo has grown to be a popular brand in the market. People recognize it. You've expanded to different verticals. What are the challenges for Pickaboo now?
Shahrear Sattar
Right now, the major challenge for Pickaboo, and any other e-commerce businesses for that matter, is maintaining the quality of service as we scale our operation.
This challenge has various aspects. One, for example, is concerned with the commitment on the part of the suppliers. And suppliers, in our part of the world, doesn't have a good track record in meeting their commitments. If we order 500 products, it's very much possible that 200 of them never reach us within the deadlines. We often lose a fair share of our customers as a result of such shortcomings.
To address this, we pay extra attention to our suppliers; and when we can't deliver an ordered product due to delayed supply, we especially call that customer and suggest them alternative products and apologize. But it's not cost-effective to reshuffle the supply-chain for a single product.
Often customers also don’t take it positively. We need to use our customer care and logistics service separately. This causes a loss of efficiency.
Secondly, as an expanding business, we are in a constant need of new people. We are getting more orders every day, and to handle them we need more people. But the current education system, as cliche as it may sound, isn't creating enough qualified people.
I see fresh graduates nowadays who want to start their career in the smoothest way possible. Many of them want a desk-job from the very beginning with a separate office room and other similar perks. But this is not how a new-entrant should behave. You should start with an attitude to work hard, struggle and walk the extra mile.
At the same time, eCommerce is a fairly new phenomenon and it is hard to get people who have experience in the space.
Logistics is another key challenge now. With the rise in daily orders, it is becoming increasingly difficult for us to manage product deliveries on our own. Thus, we are forced to concentrate a large portion of resource in this area. At the same time, it is often challenging to completely rely on third-party vendors due to the quality of service.
The government should also take steps to regulate the gray market. Many organizations are openly doing business in retail showrooms and for them, legitimate organizations like ours are suffering. The government can take a number of measures to control them. It can double their taxes for selling duplicate products or eliminate them altogether.
Future Startup
How does your marketing work?
Shahrear Sattar
Digital has so far been the best way for us to attract the type of customers we are targeting.
Platform-wise, Facebook, and Google continue to lead. We also advertise on local online news portals for some specific type of products.
Future Startup
Are you raising investment?
Shahrear Sattar
We have some news regarding investment which I can’t disclose at this moment but you will know soon Insha Allah.
Future Startup
We discussed your customers outside Dhaka the last time we spoke. Let me read from your last interview: “of course, we are planning to employ some strategies. Currently, about 55% of our total customer base live outside Dhaka. There are several barriers to overcome before we do so, especially by replacing our current third-party logistics service. This is why we often have to work overtime and for long hours.” Again, are you considering any particular strategy to reach out to customers outside Dhaka?
Shahrear Sattar
The plan remains the same as before, but the percentage of customers outside of Dhaka has slightly changed. We get around 40% of our total orders from around the country now.
Expansion plans are there but we don’t have a timeline for that yet. For now, the priority is to ensure absolute best quality service for our every customer including those are from outside Dhaka.
Technology is a priority for us this year. Honestly speaking, Pickaboo is technologically weaker than most other local e-commerce businesses. We are working on our all digital platforms.
Future Startup
How does your payment work? What percentage of transactions happen digitally?
Shahrear Sattar
We receive payment through the cards, as I mentioned earlier, we are one of the biggest in the card transaction in the entire ecommerce industry.
Our overall digital payment is also satisfactory and higher than the overall industry average. We have payment gateway partners who have been providing excellent support to us.
Digital payment is all about trust. If your customer trusts you, they are likely to pay you digitally. Fortunately, we have been able to build a relationship of trust with our customers over the past years.
Future Startup
Any special plan for 2018?
Shahrear Sattar
Technology is a priority for us this year. Honestly speaking, Pickaboo is technologically weaker than most other local e-commerce businesses. We are working on our all digital platforms.
Another concern is infrastructure. Our logistics service is still not capable of managing the number of orders we receive daily. We plan to transform it soon to ensure a great experience for our customers.
Digital payment is all about trust. If your customer trusts you, they are likely to pay you digitally. Fortunately, we have been able to build a relationship of trust with our customers over the past years.
Notes:
1) Interview by Ruhul Kader, Transcription by Rahatil Ashekan and Shabiba Benta Habib
2) Read our previous coverage on Pickaboo including an interview of Mr. Sattar here.
