Shwapno is on a roll. In last one year, it has expanded its reach - today Shwapno has over 72 outlets across the country, launched a safe food brand called Shuddho that aims to implement the concept of field to shelf, invested heavily in private label brands, made data-driven decision making an strategic imperative, launched a hyperlocal ecommerce operation and built an organization that can meet the demand of a fast-changing industry. These are just a few. There are more to it.
In this wide-ranging interview with ACI Logistics Executive Director, Sabbir Hasan Nasir, we cover everything Shwapno, starting from major changes at Shwapno over the past one year to how its growing focus on safe food, incorporating technology into operation and investment in private label brands means for its long-term growth and strategy, how Shwapno plans to grow its safe food business, how it is using machine learning and analytics to make better decision across organization, how it collaborates with farmers, its ambition to build a complete value chain for grocery and fresh produces, its ecommerce ambition, the story behind Shwapno’s growth, how high cost of funding has become a challenge for its growth and how it plans to address it, Shwapno’s goals for 2019, we discuss the job of a CEO at an early stage company, interesting concepts like strategic intelligence and much more.
This is our second interview with Mr. Sabbir Nasir. He has a beautiful mind. This is a brilliant read in its entirety. I hope you enjoy it as much as we did.
Ruhul
In October 2017, when we last spoke, Shwapno had 62 stores, 11 franchises, 44% market share, and you just became EBITDA positive, how much has the company evolved over the last one year? What are some significant developments? Could you please give us an overview of Shwapno today?
Sabbir Hasan Nasir
We added 10 more stores, mostly in the franchise. We developed a concept called Shuddho in partnership with Global Gap and became a Global Gap member. Global Gap is the worldwide standard that assures good agricultural practices and is the certifying authority and partner for many retailers across the world like Walmart, Whole Food Markets, Tesco and many more. We are probably the first retailer in Southeast Asia to start such a partnership.
USAID's AVC project, which is an agricultural value chain program, came forward to help us. We are going to the field where farmers produce our crops and teaching them about pesticides, how to use them, what is allowed and what is not and how we can convert chemical pesticides into natural pesticides.
There is a term called PHI which stands for the pre-harvest interval, the wait time between a pesticide application and when a crop can be harvested. We educate them on how to maintain PHI in crops so that it doesn't have an unacceptable level of pesticide residue.
This is a new and bold step. Through this initiative, we’ve started our mission of transparency from the field to shelf. It means what goes inside the soil and crops before harvesting is also important for consumers to know and retailers to know.
Almost 72 farmers are now supplying their produce to us through this Global Gap certification process. Shuddho is that brand where we maintain PHI in the crops and don't allow any harmful pesticides inside the crops, inside the soil. There are guidelines that we are following to ensure safe food. This is a new step in Bangladesh retail industry. That's one.
Last year when you came we just started improving our gross margin. Now the gross margin moved almost 4-6%. The kind of efforts went into improving gross margin were having more share from the field instead of buying from the intermediaries, working directly with the farmers - that's one. Second: improving the non-food item sales like fashion and general merchandise in the category mix. It has contributed to the gross margin. As a result, our net gross margin moved high. That's the second strategy.
We have become more data-centric I would say. We are creating data and machine learning models to improve our business and make better decisions.
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Ruhul
Could you please break it down in terms of how does it help?
Sabbir Hasan Nasir
In retail, we do a lot of experiments. You can call it A/B testing. I just call it experiments and quasi-experiments where you change different variables - you change the structure, you change category mix, you change sourcing - and then see what happens.
Initially, you do it on a small scale. Maybe in one outlet, in one section. Maybe five outlets, five sections. You change the variables. You change category mix. Structure of the organization. You change the businesses process. You make those changes. Then you see what goes in and what goes out. In retail, there are many metrics. I'm giving a simplistic example for your understanding. For example, it could be churn rate, the number of complaints, changes in your footfall growth, and changes in your budget growth.
These are the variable which we probably make changes to and then we observe, keeping other things same, what happens when we change a variable and what combination gives us the expected result. According to the result, we consider whether these experiments could be rolled out in all the outlets or we should make adjustments in the experiment. It is like testing a lot of hypothesis with experiments to see what works and what does not. That's one.
When there is a data model connecting one variable with other and you have several data models that can talk to each other or can be integrated, you create a system of causal logic for the organization which can give you finer adjustment for your strategy. For example, if you increase fish sales by 5% what impact it makes on overall basket size, something like that.
Then comes how you classify the outlets. It affects many things such as your assortment selection, the target for a particular outlet, how you set a target and what affects it. For example, the general intuition tells that your footfalls should be higher in high-density localities and you should have outlets in such areas. Say, that's an assumption. But our data model suggests otherwise. It suggests that particular distribution of income and propensity to loyalty decide where you would have more footfall.
That makes it easy for you. You learn what makes loyalty, what makes income distribution and then you decide where you should take your outlet and what you should fix. This is something mind-blowing. It is not merely common sense, it is data that is telling you what you should do.
If machines become intelligent and work alongside human intelligence, that makes human intelligence more powerful. That's how I see it. It's more of an augmentation. You make a decision and machine is also suggesting a decision. You take it or leave it but machines started giving you advice. Strategic advice. And sometimes it is more accurate and logical than what we do based on our intuition and experience. That's something important.
We now have a team of process innovation and data science. We recruited a number of data scientists, engineers, and process re-engineering experts. We are changing our business process and innovating new business process based on data science. These are something new. The objective is to help managers or leaders in decision making. Besides machines and algorithmic decision making we are eyeing automation as well.
It is more about prediction and pattern recognition that creates decision-making ability. When making decisions, if your prediction comes out more accurate, it pays off. But it is not just that. Whatever human does, it creates a pattern, you can see the pattern and then predict.
I would say we are just getting started. We are experimenting a lot with AI, Automation, and IOT. That I can tell you. We just started the base. It is a collaborative effort. It is not a top-down thing. All the departmental heads are now being trained on how to use machine learning. Probably, we will soon move towards deep learning, enforcement learning, and robotics.
Last year, we beta launched our e-commerce. The initial response has been good. We are exploring how we can use data science to improve customer experience in virtual shopping and how we can combine that with our brick and mortar. That's the new challenge that we are pursuing now.
E-commerce has a lot of promises and opportunities. Knowing it better digitally - that is a new set of competencies which Shwapno is trying to acquire.
Right now, adjusting the gross margin, Shwapno has taken more of a growth path. Growth is also quite commendable right now. We have taken some good decisions and strategic shift in this one year, it has helped us a lot overall. Our EBIT improved a lot in last one year but we have to improve it further to a level of possibility, not even a stretching level. It is not you have to stretch in order to achieve it. It is something you have to open some possibilities which you don't know at this moment to reach a new level. That's something that our stakeholders expect us to do. I believe we have got a great team who are capable of delivering on that ambition.
People analytics is something that we have started doing like OKR and CFR and all these. So yeah, it has been an exciting year.
Superstores are convenient because you are near your consumers. But you are not near enough. I don't want to go to a superstore for shopping. I want you, superstore, to come to me. That's where e-commerce comes in. But e-commerce is not enough. Why e-commerce is not enough because I want even more comfort. I don't want to decide what I need at my home. You better check and decide what I need at my home and you shop it to my place. That's the next thing. Amazon is trying hard to get there. Predicting the shopping behavior and predicting the shopping list. When companies get better at understanding their customers, I tell you, it will more shipping than shopping. Now we replenish our shelf and Amazon does their warehouse but next, we will be replenishing kitchen of our customers. That's the next thing coming with smart refrigeration and IOT.
Ruhul
Two major shifts I would say, one is with Shuddho, which is moving towards the pure food movement which is increasingly becoming mainstream. A lot of people are asking for safe food and health food and all that. So that's one major change. Another is data. More into machine learning and analytics and more into, in the future probably, IOT, robotics etc. How do you see these two major changes are going to shape the future of Shwapno? If I put it differently, Shuddho, which started with 72 farmers, do you plan to expand it into other categories? And if so how is it going to change Shwapno overall? And how do you see data and machine learning are going to change your strategy and how you operate as a company going forward?
Sabbir Hasan Nasir
I could put it this way: technology for goodness. Technology for safety. Technology for a better future. Technology for prosperity. That's the broader ambition. Globally, the human race is moving towards a transcendence where artificial intelligence and these new technologies will work together with human intelligence. It already has started happening in different parts of the world. It will happen here as well. Are we ready? If you ask me, the answer is both yes and no.
From Bangladesh perspective, we have got something like a digital vision. We started talking the buzzwords. Many people are now into startups. They get thrilled by technology. Those are positives.
The negatives are: are we really using it? Are we really making it? Are we really reading it? If you ask me, not even at the level of our neighbors. Why I'm saying this, I really commend something like Pathao and all these technological innovations coming up. These are brilliant innovations. But are we really using IOT and machine learning and augmented reality, the answer is no. If you ask any senior leaders in most companies in Bangladesh, they have a limited understanding of what's going on here. We are not committed to these changes. We know these changes are coming but we are not getting ready.
The reason I chose to re-educate myself in the last two years is that this is coming and we are not ready.
Coming back to your question, how I see the combination of these two. First of all, access to affordable safe food is a right of all the citizens. But how you do it? One is through your regulatory bodies guideline. That you have to do this to ensure compliance. But sometimes these guidelines are not good enough. Sometimes they are not relevant even.
For example, maintaining a temperature window for meat and fish is important for ensuring food safety. Who comes and checks that? Nobody. But you check probably formalin. Probably there is no formalin now in fruits. But you still check. Then you talk about why you kept some near expiry product somewhere in the backstory to be shipped to your suppliers. You are angry about it. Probably that's not the major concern. The major concern is: are we maintaining a cold chain? Are we using proper water? You should know bacterial contamination and foodborne disease, what is the rate? What are the root causes? How can we improve and what should be the interventions?
To me, transparency at source is the first thing that needs to be ensured, like what goes inside the crops is the first important thing. Then how you transport that from the field to a superstore or a market, that's also equally important. These two should be controlled and should be checked. We want to address these issues. You are right, it would not be confined to 72 farmers. It would be a social movement. It would be a movement throughout the country to ensure safe food for everyone using technology.
Now why technology. One is the frontend where you are connecting with your consumers where they are asking for convenience, accuracy, and perfection. Because of human errors we still have flaws. We make wrong billing. We make mistakes in many other areas which are avoidable with a little help of technology. Many of the common errors can be improved using machines and consumers want that. Either you train your people well and hard. You train and retrain. You improve the training budget. That's one. Also, you can use technology to avoid human errors in many cases.
Superstores are convenient because you are near your consumers. But you are not near enough. I don't want to go to a superstore for shopping. I want you, superstore, to come to me. That's where e-commerce comes in. But e-commerce is not enough. Why e-commerce is not enough because I want even more comfort. I don't want to decide what I need at my home. You better check and decide what I need at my home and you shop it to my place. That's the next thing. Amazon is trying hard to get there. Predicting the shopping behavior and predicting the shopping list. When companies get better at understanding their customers, I tell you, it will more shipping than shopping. Now we replenish our shelf and Amazon does their warehouse but next, we will be replenishing kitchen of our customers. That's the next thing coming with smart refrigeration and IOT.
Now, in Bangladesh, we are and will be lagging behind. We will either just talk about it or we will do it. Shwapno team believes that we got to do it. We have to be ahead of the curve. So we started thinking that way. Creating a convenient chain towards the consumers, that's one end. Making consumer experience better and better and taking it further.
At the same time, using technological tools to help farmers and manufacturers to make it safer and transparent. Here technology can connect both. That's why I'm saying technology for goodness. That should be the next mission for Shwapno.
Ruhul
One of the challenges with safe and pure food is that it is expensive, as you mentioned earlier. It is not affordable for many people. Over time, how do you scale that model?
Sabbir Hasan Nasir
In the initial life cycle, we need more push. We have to make consumers aware and ask them to pay extra. That has to be there because my scale is low. I can't make sustain if I charge it on myself. It's not just possible.
I will create more awareness so that it eventually creates a pull and when there is a pull, farmers will be motivated to produce safer produces and pass it through the chain. That's one. Then more players would be interested and there would be a social movement for that. Then probably scale will increase and the cost will come down.
But this will not happen right away. It will take another three to five years. Nothing happens overnight. But somebody has to take the lead. So we are taking the lead. One of the factors that I identified that can help is export. Since we are heading towards the Global Gap certification. If our farmers can get it they can export. If that happens, their value chain gets totally changed and they get more incentives to produce at a higher cost.
Ruhul
What are your plans for Shuddho, say, for the next couple of years?
Sabbir Hasan Nasir
Within the next couple of years, Shwapno should have only Shuddho produces, nothing else in their fresh produce line, in their fruits and vegetables. I'm trying to extend it to fish and meat as well. So that's the plan.
Ruhul
How does your collaboration with farmers work?
Sabbir Hasan Nasir
We give them buyback guarantee, that's one. We give them 10-15% extra compared to the market price. The farmers and our representatives visit the market and conduct a price survey and then they select a price and then we give them 10% extra on that price. We give them buyback guarantee so that they are inspired to do it.
Ruhul
What has changed in terms of culture and how people work at Shwapno? We had a pretty lengthy discussion about Shwapno culture last year and you mentioned that you have introduced people analytics and OkR and a few other things that were not there before. What are a few other things that have changed?
Sabbir Hasan Nasir
I think we have improved a lot in terms of working as a team. We used to be in departmental silos before but we are breaking those boundaries now. We are now creating projects, say for example, for improving a process or a product category, and we then give it to a team and they work on it together. That's something new that was not happening much in the past.
We have changed our recruitment, training and development process. People are getting more training opportunities than before. We have introduced some profound changes to the recruiting process. We’re keeping the subordinates in the process of choosing their leaders. That's something new. More transparency and accountability in terms of whoever performs well in the organization get noticed and recognized. That's started happening more.
We were more fun culture before and right now, we are more serious. We still love to have fun but we probably have instilled a bit more formal sense when it comes to assessment and in making decisions.
Fact-based, data centricity has become one of the mainstream cultural components. In terms of culture, diversity is something we are promoting heavily.
We now talk to each other more. Engagement and exploration - these things have got some new momentum. We now promote new ideas more than before.
I would say accountability, transparency, and focus, these things have improved a lot than before.
Ruhul
As you mentioned diversity, what percentage of your people are female?
Sabbir Hasan Nasir
In the support office, it has improved a lot. It was less than 2% before. It is about 20% now. I'm not only talking about gender diversity though. I'm also talking about diversity in terms of belief systems, orientation, background and more. In short, we have people from different backgrounds with diverse perspectives. We started encouraging diversity in teams because we get more perspective.
Ruhul
Last year you launched a handful of private label brands, which was about 6% of your portfolio. How is that business doing?
Sabbir Hasan Nasir
It has grown to about 9%. But we want to grow further. We want it to be around 25%. Some of our private label brands did really well such as bakery items. It has become very popular among our consumers. We have penetrated pretty well in the market.
Once we grow our outlets through the franchise model, it will be easier for us to reach out to a greater number of consumers.
My vision is to have 10,000 outlets over time. In the next two-three years, it is about 1-2 thousand.
e-Commerce is a huge opportunity if somebody can really play well. But I don't believe in Flipkart model of building a business where you keep losing and bleeding money and somebody comes in and buys you out and you get a great valuation. I don't believe in that model. I think we should create solid value and capture value. And it's possible. And if it's possible, it is only possible by Shwapno. Because we have that value chain to provide you anything faster and better.
Ruhul
Coming to Shwapno e-commerce. I had a pretty interesting discussion with Ayaz bhai and Saiful bhai early this year. It was basically grocery-focused at that time, you wanted to build a hyperlocal ecommerce operation, were operating out of 5 outlets in Dhaka and doing a couple hundred delivery a day and planning to expand your product range there? Could you please give us an update there and as well as what are your plans for ecommerce?
Sabbir Hasan Nasir
We have made some restructuring there. The number of outlets involved has increased to 10. We have some tech people who took over the responsibilities. We stretched our categories to general merchandise, lifestyle and some of the non-food items which are now doing really well. Our contribution margin was not making sense at that time. So we made some changes. It has improved a lot since.
e-Commerce is a huge opportunity if somebody can really play well. But I don't believe in Flipkart model of building a business where you keep losing and bleeding money and somebody comes in and buys you out and you get a great valuation. I don't believe in that model. I think we should create solid value and capture value. And it's possible. And if it's possible, it is only possible by Shwapno. Because we have that value chain to provide you anything faster and better.
But we need to understand this business better. We are now working with some foreign partners. We are upgrading the overall system. We have seen that if we could work on the category mix, there is a big opportunity to capture. We just have to do more experiments.
My strategic direction towards this business is that it is always better you cannibalize yourself than somebody else cannibalizing your business. I would be happy to see that.
Ruhul
What I realized from the last conversation, I think there is a sense of conflict of interest internally. You are essentially trying to build a hyperlocal ecommerce operation. But your local outlet may not consider an e-commerce order as its own and instead may think it as cannibalization of your existing retail business. How do you balance that? How do you see it?
Sabbir Hasan Nasir
At this point contribution of e-commerce is so low, not only for Shwapno but overall, that can't make a dent yet. Rather I think it is a complimentary service to the brick and mortar model.
We give some credit to the stores so that they take it as their own delivery. You correctly mention that the hyperlocal model should be based on some value shared by the brick and mortar outlets. Brick and mortar should get that credit. We actually give part of the credit to the bricks and mortar outlets.
Coming back to your question about the conflict, it is all about mindset. It is a way of thinking that it is a separate business and it can take over my business, which can probably cannibalize. My strategic direction towards this business is that it is always better you cannibalize yourself than somebody else cannibalizing your business. I would be happy to see that.
You know why because the cost of serving would be really very low. And we can capture more value. To that end, I'm a little skeptical about increasing our own outlets. Rather I'm more interested to have partners who can work as order fulfillment centers for us where they can work as a small brick and mortar convenience stores as well as Fc for us to serve the demand from their neighborhood.
That's why I talked about 10,000 and 4000 stores so that we could have distribution outlets for the entire country. Then it is more of a spoke and hub and distribution channel. And then e-commerce platform that comes in can reach a wider group of customers.
Right now it is Shwapno’s e-commerce, who knows in the future it could be a platform, a marketplace where on one side there will be all suppliers and on the other side all the consumers. Maybe that's the future for Shwapno e-commerce.
Ruhul
If you go a little back to the time when you joined Shwapno, you have grown significantly from there. You took over a rather problematic retail chain as you mentioned in our last interview, “after much thought, in 2011, I took the challenge of working at Shwapno. I took over a problematic retail chain which was having all kinds of challenges internally and externally. Right after joining, I had to focus my energy and concentration on solving problems.”What are the things you have done to grow the business?
Sabbir Hasan Nasir
It is not me. It is the team. The team has probably identified the priority list. They have done a great job in organizing the house. Housekeeping not in the sense that bookkeeping but in the sense that what to keep and what to let go in terms of values and culture and everything. Initially, we reduced the number of outlets that we had at that time. We became small first and the grew from there again. That was the first thing.
Then you might ask how you actually grew. We created reasons for consumers to come. We brought relevance to our communication. Credit goes to Mr. Tanim, Mr. Mahady, and Mr. Farid, these three people, who did wonder at that time. We did a huge amount of work in terms of communication at that time.
Then what you sell and at what price point is important. Sometimes people cut the price but it does not work. But sometimes some retailers cut and it works because they know exactly at what price you should talk. That's magic. You should find the magical price point in the consumer mind. Small things like what font you should choose and what message you should send, these things are important.
We do thing very different now than what we used to do in 2012. Every year we design a new brand strategy, communication strategy and try to do things in a new way. That’s one - we are very dynamic as an organization.
Most importantly, customer centricity is at the core of whatever success that we have achieved over the past years. We are very much customer-centric. It is a cliche now because everybody says that. I can give you a few examples. I'm very much active on social media to see what people write and what's going on in the world. If a customer complains that he bought a pant from Shwapno and is not happy with it. We try to solve it in every possible way even if that customer does not have the money receipt or anything but he is sure that he bought it from a Shwapno outlet, we would change it for him. We go the extra mile. We would go up and down in order to make a customer happy.
I'm not saying that we are flawless. I'm saying that we strive really hard to serve our customers better. If a customer complains, no matter how the complaints come, we get crazy. We become paranoid. Even for a single onion, we get crazy. We never think what time it is. If there is a customer issue, we are there. I would request our customers to lodge their complaints to us and see how quickly we react.
It is not me. It is the team. The team has probably identified the priority list. They have done a great job in organizing the house. Housekeeping not in the sense that bookkeeping but in the sense that what to keep and what to let go in terms of values and culture and everything. Initially, we reduced the number of outlets that we had at that time. We became small first and the grew from there again. That was the first thing.
Ruhul
What are the challenges for Shwapno now?
Sabbir Hasan Nasir
Our financing cost has gone very high because of the interest rate. With this financing cost, we are really facing challenges in terms of capturing the value.
Ruhul
Do you plan to look for alternative funding, say, venture capital or PE investment?
Sabbir Hasan Nasir
We are interested to explore these options. We have certain milestones to achieve before we start talking to them. Many VCs and private equity partners started talking to us for two-three years now. We are getting offers as well. But these offers are not probably at the level of our expectation. So we think we should do even more hard work and stretch a little more so that we start getting a little bit better offers. Then we will think about it. That's one of the biggest challenges.
The second is consistency. Young people join Shwapno, they work hard and sometimes they move to other industries or other chains. You know, developing somebody for retail is tough. It takes time. Finding and retaining human resources is a challenge because your margin is low. You can't increase your paycheck that fast. With the expansion of our outlet, the growth of human resources is going to be a challenge.
Sometimes our customers don't want to give value to our work in the value chain. Sometimes they tend to compare our prices with the wet market prices. But that's not fair because we are adding some value to the process. Sometimes customers react to our price. Of course, people are price sensitive but sometimes we can't afford to deliver the value that we deliver without the price. Still, we are trying to overcome these challenges.
In most cases, early stages companies have got some kind of system, processes, and structures, and strategies documented or otherwise but in most cases connecting the existing values and the future values they should embrace is not there. Sometimes your present value system does not support your future growth. So you've got to make some changes to your value system. Very few organizations and founders understand that. To become the person you want to be you have to leave behind the person you are. This understanding is not always there. That in early stage these values worked but when you scale those values might work anymore.
Ruhul
That was the final question related to Shwapno. I want to ask a few questions related to running companies. First one is, what should be the priorities of a CEO of an early stage company?
Sabbir Hasan Nasir
In most cases, early stages companies have got some kind of system, processes, and structures, and strategies documented or otherwise but in most cases connecting the existing values and the future values they should embrace is not there. Sometimes your present value system does not support your future growth. So you've got to make some changes to your value system. Very few organizations and founders understand that. To become the person you want to be you have to leave behind the person you are. This understanding is not always there. That in early stage these values worked but when you scale those values might work anymore. That's one.
Two, the structure has to change. The early stage structure and future structure does not work well together. In most of the companies in Bangladesh, they can't identify what are the structural changes they need to make. The strategy has to be formulated and outlined. In many cases, strategic intelligence is low.
Probably my strength lies in understanding the vision, in terms of where the company should go and understand where the founders and stakeholders want to go, and then I can create a roadmap from the early stage to that because I can really identify what are the strategic, cultural, structural, and political changes you have to make in the organization in order to move forward. Because all these things are very important.
Again coming back to strategic intelligence. I think that is very much missing in our local scene.
Ruhul
What do you mean by strategic intelligence?
Sabbir Hasan Nasir
It is quite broad. In many companies, you would see they have got very low strategic intelligence. You could see it in early stage career. Some people don't know why they are successful. Some organizations also don't know why they are successful. Sometimes you got a gap in the market, you created something and you got growth and you don't know why. But then it stopped. Things changed. Competitors came. You don't know what to do. You don't know your core competencies and you don't know how to leverage your activities and assets. How you can embed your core competencies in your process and how it can create a competitive advantage to serve your customers. In very few companies those are written down. They identify that properly. Why I'm saying this because you don’t know what is your differentiation strategy. You have to know are you faster or smarter, what is your strategy. And how do you differentiate yourself from other competitors to create more value and capture more value? How do your value chain strategy and people strategy connect and collaborate?
Very few companies, I'm talking about emerging markets, understand these things. Probably I bring that to the table and I show them how to do it. That's why I'm saying very few companies have got moderately high strategic intelligence. Apple is high intelligence company. Google is a high strategic intelligence company. You could not be Google but you should at least aim for moderate-high intelligence.
Moderate strategic intelligence means, do you have a strategic plan, written down plan. Do you know what is your general strategy? What are the functional strategies you have? How you will differentiate yourself from your competitors? Why you should capture more value? What is the system logic? What are the assumptions behind your system logic? As you do interviews, if you ask people these things, you would see we have got troubles here in writing that. When you write that down for the first time, probably it is a mental model, very much initial level mental model without having the proper model to support that. There we lack.
Early-stage companies should work on that. They should develop their strategic intelligence so that new values, a new change in the strategy and structure can take place.
Delegation is a problem in our culture. Founders tend to hold on to things. At the same time, founders should feel secure about delegation and that these people would not ruin what he has built. There should be proper check and balance and accountability and board review process.
Ruhul
Last year you had three goals, if I read back from our last interview, 1) become the strongest retailer in Asia, 2) scale within the country 3) build a better relationship with suppliers ” How are you doing on those fronts? What are the plans for 2019?
Sabbir Hasan Nasir
The first one is definitely happening. We are the first retailer from South East Asia to be in the book of Global Gap. It is something for which any Bangladeshi can feel proud of.
We got this Super Brand Award and all these brand awards. Whenever people come from abroad and visit one of Shwapno stores, they get amazed. They could not believe that something of that quality could happen in Bangladesh. That gives a very good feeling. Probably we are crossing those thresholds. But these are not enough. In terms of process orientation, we are not yet there. If you compare us with the US or China market, we are not there yet. But if you compare us with the Indian retail or Sri Lankan retail, we are definitely ahead of them.
In terms of being everywhere, I think it started happening. By 2019, we will cover the whole of Bangladesh.
The third is loved by our suppliers. We probably have to work a little more here. Sometimes the relationship is bittersweet because when you need margin you need to negotiate and that does not always make your suppliers happy. But when you grow fast that makes them happy. We definitely have to have a strategic partnership with all our suppliers so that we grow together and they stay on our side. I think we have got that. But we have to build it further.
For 2019, growth is the priority. We have done a lot of things right. We have built a solid foundation. Now it is about building further what we have done so far. We want to grow our coverage. We plan to be more aggressive on the side of ecommerce. You will see more data-driven activities and greater automation in the coming years.
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