Building A 100-Year-Old Company With Waseem Alim, Founder, and CEO, Chaldal

Building A 100-Year-Old Company With Waseem Alim, Founder, and CEO, Chaldal

Future Startup’s Ruhul Kader sits down with Chaldal Founder and CEO Waseem Alim to deconstruct Chaldal’s ambition to build a lasting company and an operating system for the economy.

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Chaldal was founded in 2013 by Waseem Alim, Zia Ashraf, and Tejas Viswanath. It was the early days of ecommerce in Bangladesh and online grocery shopping was a relatively new thing in Dhaka. It took Chaldal a while to educate the market. Back in 2013, in the early days, the startup was delivering 5 orders a day. Today, it delivers over 2000 orders per day. From a tiny team of five people in 2013, it has grown to a team of over 600 people. Chaldal’s yearly revenues are estimated to be north of 100 crore taka. The company is one of the top-funded startups in Dhaka and has raised multiple rounds of investment from investors like Y Combinator, IFC, and IDLC among others.

With the growth of the business, naturally, Chaldal has grown ambitious. Today, the company aims to turn itself into an enduring organization – a 100-year-old company, and an operating system for the economy.

In this excellent interview with Future Startup’s Ruhul Kader, Chaldal Founder and CEO Waseem Alim lays out the game plan and Chaldal’s strategy to become an operating system for the economy and illustrates his plans to build an enduring organization.

This was a much longer interview. So we had to break it down into two parts. This is part one of the interview. Please return later this month for the next installment of the interview.

Future Startup

What is the thing that you are trying to build with Chaldal?

Waseem Alim

An operating system for the economy.

Future Startup

What do you mean by that?

Waseem Alim

The economy, if you see it transactionally, is a mess. There are different layers here because we are talking about a complex system. For example, there are receivables, but there is no credit rating system based on receivables because the data is spread across many parties. Transactions don’t happen in a unified manner. If we could bring all these disperse parts into a unified platform, not necessarily in a platform controlled by us, it would allow everyone to make better decisions quickly. That is the goal.

There is a lot of information asymmetry now. Take, for example, a lot of traders bring tomatoes to Karwan Bazar. You bring from one place; I bring from another place and so on. The problem is nobody knows what will be the price of tomato tomorrow, or how many tomatoes are in transit. Nobody knows the collective information. Consequently, several things happen. Tomato prices could collapse due to oversupply or price could go up due to undersupply. These are two very different outcomes for a trader.

I have heard stories where traders from Comilla buy tomatoes that came from Comilla to Karwan Bazar. Comilla’s tomatoes go back to Comilla but 5 percent of the tomatoes are wasted in transit.

If we could connect the traders and growers of tomatoes in Comilla, it will solve a huge problem. We want to build a platform where we would open up these data so that people can make better economic decisions. Take, for example, truck distribution is mostly random today. As a result, truck owners don’t get trips often. But if we could ensure information dissemination properly it could solve this problem and send trucks to places where there is a demand for trips. Ride-hailing companies solve this problem, to some extent, by using heat maps of demand to guide riders. But still, that is not done properly because of the riders have their own preference and are sometimes not able to understand these maps. You need to figure out the right incentive structure and the right User Interface.

The advantage of digital is that you can reduce this information asymmetry effectively. I tell this one thing often, probably it does not make sense to open a drill machine shop in Magura or some remote places where there is probably demand for drill machines but it is not high enough to run an independent shop. But if you could manage a central warehouse system and take advantage of digital distribution, you could serve the limited number of customers in Magura more efficiently. You can make it accessible to people in Magura and you send it when there is a need. It reduces wastage. Capital is not stuck in Magura.

There are goods and capital stuck in various parts of the economy because there is no smooth flow of information. Due to information asymmetry, there is too much friction in the world today in how we transact and that creates inefficiency. We want to reduce the friction in the entire economy.

Future Startup

So what is the key here? Warehousing, logistics?

Waseem Alim

Our central components are warehousing and software. We want to give our software everywhere so that better decisions are made. No one knows, for example, how many onions would sell three days before Eid. But we now have like five years of data. We can predict now. We know that onions sell more on rainy days. If I feed the weather data to our systems and inform the farmers for onion supply accordingly, it would make the entire system much more efficient. That’s what we are trying to achieve.

Future Startup

That’s an ambitious goal compared to what you have been projecting yourself so far?

Waseem Alim

It is a platform. We have been working with a very disorganized part of the economy which is groceries and trying to put some organization and civilization into it. We are moderately successful. Right now, we are probably the fourth largest grocery player in the country in terms of revenue – not just online, overall. That’s an achievement. But grocery is a huge market and a very tiny percentage of it is organized.

I estimate grocery in Dhaka is, at least, forty thousand crore taka market annually. We are just a hundred crore business. We are like 0.25 percent of the market. Over the next few years, we expect it to be five percent of the market. I think that’s a reasonable ambition.

The advantage of digital is that you can reduce this information asymmetry effectively. I tell this one thing often, probably it does not make sense to open a drill machine shop in Magura or some remote places where there is probably demand for drill machines but it is not high enough to run an independent shop. But if you could manage a central warehouse system and take advantage of digital distribution, you could serve the limited number of customers in Magura more efficiently. You can make it accessible to people in Magura and you send it when there is a need. It reduces wastage. Capital is not stuck in Magura.

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Future Startup

You want to take 5 percent of the grocery market and then you want to build this platform that would bring all the parties on a platform and that allows you to grow your share. Or you just want to enable everyone?

Waseem Alim

Well, that’s software part and it is not essentially related to our grocery business. We enable the system and make the economy more efficient. We will free up a lot of capital and will help decrease efficiencies. If we are able to do that maybe we can make some money out of it.

Future Startup

Definitely, it will help you increase your influence and to some extent give you some control?

Waseem Alim

We don’t want to control. We want to empower. We want to have a neutral platform, like Wikipedia. People should be able to play with this platform and create value. I would actually go very far to restrict our control of the platform. We would consider Chaldal to be a client of that platform. It is like Linux.

You might ask why do we not want control. There is a lot of economic value to be unlocked. At the same time, this is a lot of work and that needs a lot of great people. Keeping it neutral will allow us to rally people. Some of the best people I know want to work for a worthy cause and I think this platform would only attract them if it is neutral.

Future Startup

If you consider that is your ambition and if you consider your position today, where do you stand?

Waseem Alim

0.5 percent.

Future Startup

Could you please explain what does it look like, probably with an example? You mentioned a little bit but what does it look like, how would different actors and the players operate within the ecosystem?

Waseem Alim

Say, you are a company like PRAN. PRAN is already spending a lot of money on ERP systems. First, money is going out of the country. Second, there is little scope for them to develop on the system. We would create a platform where PRAN gets the same ERP system that they would get from a company like SAP. And we will also have actors who may be companies like Brain Station who can edit on the platform and create modules for PRAN. It is kind of a big vision. We would need to develop a lot of great software. Build a lot of trust on the platform. But you know, it is what it takes.

Future Startup

How does that connect with your existing business model?

Waseem Alim

A by-product of building Chaldal is that we’ve become very good at making operational software – since we had to write a lot of it. We have come up with a system of making such software much faster than other people. We have built software that allows us to build operational flows very easily. We, now, want to propagate it through the system. Not just for Bangladesh, but also for other countries like Thailand, etc. Bangladesh is a test bed.

We want systems to get connected with each other seamlessly while keeping it cheap – unlike existing ERP solutions like SAP. In order to install SAP, you have to be a company with some significant revenue. Everybody can’t spend five million Taka on a piece of software. We want the platform to be accessible to small players.

Future Startup

If I try to visualize it, how it will play out, so, you have a platform say called Chaldal Systems and you have PRAN on that platform that uses that platform on the back end? And then what happens?

Waseem Alim

Say they are using us for their inventory management. They will keep their own data and get to choose who they share it with. They are not forced to upload it on the cloud. They install the software as a patch. Our platform is open source so that PRAN can hire anyone to develop on the platform. They can even commit code to the global repository for other people can use that code. We keep adding more and more companies to the platform, say Unilever comes on, Chaldal comes on and maybe someday Shawpno comes on. Everyone uses that platform and it becomes the standard, and people might start sharing data. The cost of the platform will be very nominal.

Chaldal Warehouse | Photo by Chaldal

Chaldal Warehouse | Photo by Chaldal

Future Startup

That’s very interesting. Do you think it’s a departure from the things that you are doing now?

Waseem Alim

No. I think it’s very related to what we have been doing. We have learned this by doing what we have done so far. We have realized that it is not just grocery retailers who are inefficient, grocery distributors are inefficient, grocery manufacturers are inefficient. Manufacturers produce one thing but it does not sell because they don’t have proper projections, they don’t know the correlation between items.

With more data, they could work better. If you make something and if it does not sell, everything that you used there is a waste. We don’t want that waste. They should be able to make better decisions because they are on our platform and have all the data accessible. They will get a lot of insights. We will provide them usage cases that they could use and then they could improve.

A by-product of building Chaldal is that we’ve become very good at making operational software – since we had to write a lot of it. We have come up with a system of making such software much faster than other people. We have built software that allows us to build operational flows very easily. We, now, want to propagate it through the system.

Future Startup

In the next two years, what are your plans?

Waseem Alim

On the grocery side, which is our bread and butter, we will continue to expand aggressively. We have 8 warehouses now; we will expand it to at least 15 warehouses in Bangladesh. I have made a commitment to all the stakeholders that we will be in one more country by the end of this year. I am still committed to that vision.

On the platform site, we are already working with a few companies. I can’t disclose the names. We want to give them the initial version of the platform, work on it, and develop it.

The way Chaldal is today, we don’t need much tech power in scaling operations anymore. Whatever we have developed is very good. The foundation has been built. The business is operationally profitable. The changes going forward will be more cosmetic in nature and we won’t need high-level system architects working on it.

Chaldal will continue to develop. We have one-hour delivery at Chaldal. We want to introduce 15-minute deliveries by June 2019. We want to offer live tracking. Obviously, we have to keep improving on the service level.

Our best day was we delivered 20 thousand items and we missed out 6 items. That kind of accuracy is rare for an online grocery service. Not just in Bangladesh, but globally. Perhaps Amazon has that kind of fulfillment rate. We have to keep pushing so that we have similar success with other parts of the service.

We will have a lot more data and we will continue optimizing Chaldal. But key engineering members will focus more on the platform level.

Future Startup

My question was basically, down the line three years, how do you plan to take the platform to the next level?

Waseem Alim

We are already working on a lot of manufacturers. We have a really very good relationship with many of them. We will give it to FMCG companies and if they find it useful, they will propagate it through their systems.

We are working with some Facebook merchants. Maybe we will allow warehousing through the platform like Airbnb for warehousing. We want to enable Facebook merchants.

We don’t want to operate too many warehouses in the long run. We want to have other people’s warehouses on the platform and allow everyone to access it. We just provide the software.

Future Startup

Why should other people build warehouses for you?

Waseem Alim

They already have warehouses. We will let them earn more per square feet. They will be connected to the Chaldal Systems. We will expose the availability of warehouses in different locations and other data to potential customers. We are still in an initial phase with these ideas.

In three to four years, if the government allows, we can launch a payment system among our merchants so that it can be even more efficient. Our goal is to make the economy more efficient, doing much more with what we have.

Future Startup

We are talking about the backend, what is the frontend? Where do customers interact with you?

Waseem Alim

It could be a different thing for different people. It could be Chaldal’s website. It could be Go Go Bangla website. For the manufacturers, they don’t actually need a frontend, they just need back end software. We will work with them closely and integrate it into their system if they come.

We will give the software to the manufacturers, enable them to better manage their existing business. On the data side, they will get an advantage. Managing data is a real challenge for organizations. We can help them here. They can create dashboards to manage their business. For instance, if their stock level goes down, they can set an alarm for an employee. We will help with all of these things.

Future Startup

You mentioned earlier the example of tomato and Comilla and information asymmetry and the problem it causes. How do you address that problem?

Waseem Alim

We’ve already launched a project called Chaldal Vegetable Network.

Right now, it is based on phone calls. People can sell us tomatoes directly. We are also supporting small retailers who can buy tomatoes from us. Eventually, these retailers will use an app. Since the app will take time to get adoption, we are relying on phones now. Sellers call and tell us that I have one hundred KG tomatoes of this or that grade – and we help them find a buyer. It is an online marketplace for tomatoes.

The fact that Chaldal is a major participant of this marketplace is helping the Vegetable Network to grow rapidly. We are relying on the network to source our supplies.

When we do this for say 10 years, we will have enough data to thoroughly understand the supply and demand and take measures to accordingly. We will be able to guide farmers.

We want to enable entrepreneurs and businesses through software like Vegetable Network. We want everyone to have more sleep, spend more time with their families, and waste less time in traffic or standing in front of the bank to deposit their money. We want to free up the economy from all the nonsense.

Future Startup

Now, what are the steps you are going to take next, like one or two years?

Waseem Alim

It is an evolving thing. You need a feedback loop for software development. As you get feedback, you build better. We don’t know exactly what we want to build. When Columbus got out of Spain, he knew that he had to go west. We know that we have to go west. We don’t know what the destination looks like. We just know the principles involved.

Future Startup

Could you give us an overview of Chaldal today?

Waseem Alim

We are a team of 600 people. We have 8 warehouses. We do about 2000 orders per day. Our revenue run-rate is about Taka 100 crore yearly. I think we may be the largest taxpayer to the Bangladesh Government in the eCommerce sector. That’s the company.

Future Startup

We had a conversation with Tejas, mid last year I think. One of the interesting things he mentioned is that you have this mothership kind of warehouse and then will have smaller warehouses that connect to the mothership and then there will robots and stuff. Could you extend on that? I think increasingly warehouse is becoming an important node in your business …

Waseem Alim

The problem is that humans make a lot of errors. For example, if you ask someone to pick a 100 gm Lux Soap, and they pick 200gm. It is a very big issue. It is a hard problem to solve. For now, we are now thinking of weight sensors. We have a project in the pipeline. In every shelf, there will be a weight sensor. If anybody picks the wrong product then weight sensor will show an error. If that happens, we could solve the majority of picking mistakes.

Another thing is to utilize more space. Humans need space for walking. There are slow products that don’t need regular aisle space, which is sort of a waste of space. For those, we could create a vending machine. Ultimately, we are working in extremely dense areas where finding warehousing space is a challenge. I want to maximize the number of products that we could accommodate in a single warehouse. If you think about the city as a circuit board, these warehouses are like capacitors. We need to increase the strength of the capacitors.

To answer your question briefly, yes, we are getting into robotics territory.

Future Startup

How many suppliers do you have on Chaldal platform?

Waseem Alim

I think we are working 70-80 Facebook merchants and then 150 suppliers with 12 warehouses where we stock the products.

Future Startup

Do you have any goal on that side increasing the number of merchants?

Waseem Alim

I don’t have a merchant goal. I have a transaction goal like we want to increase the number of transactions. Obviously, we want to grow as a company. We want to grow our demand to grow 3x every year for the next five years on Chaldal’s grocery business in Bangladesh. On the systems platform, we want to have a million transactions run through our systems a day. That can’t happen just through Chaldal, we would need to onboard some big companies who are delivering to every small shop. If we could onboard some of these people, we should be able to easily get to our target.

Humans at Chaldal

Humans at Chaldal | Photo by Chaldal

Future Startup

On the Chaldal side, you said you want to grow 3x year over year, how do you plan to do that? What are the things you are doing now?

Waseem Alim

We are a very conservative company in the sense that we don’t spend much on marketing. In fact, the global ratio for customers lifetime value to the customer acquisition cost is 3. The ratio for us is about 12. Simply increasing the marketing budget and retaining our employees should help us achieve this target.

Previously, if we increased the marketing budget then our systems would collapse. But now the systems are robust. We actually did deliveries on the day of mayor election, when both bikes and cars were banned, using “thelagari” and walking, etc. We got many bad reviews but, at the end of the day, we delivered 1400 orders. We have some pictures of that actually. I was impressed by the resilience of our people.

We want to give our employees the best possible life. We are working on giving them hostels and other facilities. When a delivery person comes to Dhaka they usually don’t have a place to stay. They spend much more per square feet as rent. We see that they face different problems in the places where they live. We are now trying to relieve these problems for our people.

We have employee hostels in two locations: in Rajarbagh and in Hazaribagh. We have about 20 employees taking our hostel facilities. We are an enabler there. We arrange the space and facilities but our people directly pay to the landlord. Ultimately, if they are spending 8 to 10 hours in the company and then if they come and have to deal with their living and sleeping for 6 hours then life would become a hell.

We have more structure and processes. Because we want our people to be with us for the long term. We are trying to build a more stable culture so that there are minimum ups and downs. That is the key to sustainable growth.

I don’t have a merchant goal. I have a transaction goal like we want to increase the number of transactions. Obviously, we want to grow as a company. We want to grow our demand to grow 3x every year for the next five years on Chaldal’s grocery business in Bangladesh.

Future Startup

We first spoke with you in 2016. If you go back to that time and then compare Chaldal of 2016 and Chaldal of today, what are the major differences?

Waseem Alim

One of the things I said is that as you grow, your time horizon increases. The time horizon of the problem increases but the problem becomes more and more critical. I think that is even true today. For me, I don’t have to deal with day to day issues anymore. I don’t even have to deal with issues for the next year. I have to deal with issues for the next five years. Even if I don’t play an active role in the next year, we will be fine because the systems have been developed. The problems that I am working on are much tougher to solve.

We have created strong processes. There is diligence. We are audited by A Qasem, who is the auditor for some of the biggest companies in the country. Our systems are much tighter. Even I can’t do anything bypassing the system. This is one of the most important changes.

Chaldal delivery

Chaldal delivery

Future Startup

Any other major developments?

Waseem Alim

First, more focus on culture. Second, greater reliance on the systems. The third is we have become conservative in hiring. Before we had an “acceptable” process for hiring. We used to hire in a low touch way and would let people go after three months if it didn’t work. Now, we pay a lot more attention to who we hire. We are attracting much better talent because of the brand. We have the luxury of selecting the best talent.

We now try to see what they really want to do before day one. We have no ambition of being like the hottest startup. We want to build a company that would last a hundred years. We don’t want to lot of money. We want to just stick around and create value.

Future Startup

To that end, do you plan to raise money in the near future? Are you already working on it?

Waseem Alim

As a startup CEO, you have to continuously think about these things. It is possible that we do a small round soon. We are in conversation with a few people. But we’re not raising a lot of money.

Future Startup

You are operationally profitable?

Waseem Alim

Yes. We are operationally profitable.

Future Startup

You started this project serving the small retailers with vegetables, could you tell us about it? You’ve partnered with BFPB for that?

Waseem Alim

BFPB has a Challenge Fund had the same goal of improving economic efficiency. If you think about the life of these retailers, they have to wake up the middle of the night and then they have to go shop and then work the whole day. It leads to health issues. It impacts families. We surveyed a lot of people and we came to know that some retailers bought a house by doing this business, but they could not educate their children. Many of these people send their kids to sit in the shop when the father is taking rest.

They have not advanced as businesses. They make decent money but they struggle a lot as well. We want to reduce the pain of having to go to the market every day. We want to also reduce financial risk. For example, if they are sick for two days, they are financially ruined. Our vegetable network aims to help these people.

We are tracking the transaction history. We can help them earn when they are sick or can’t sell. We want to introduce financial products based on the transaction that they do. Also, as Chaldal, our goal is to build the best vegetable supply chain in the country.

Future Startup

Now, do you allow them to sell their products on your platform as well?

Waseem Alim

No. We just help them with sourcing.

Future startup

How many of them are working with you now?

Waseem Alim

Currently, we have 24 or 25 of them who are ordering from us regularly. Our retention rate is about hundred-percent on them. The problem is that we are dealing with microcredit so payment issues must be streamlined. We are learning. We want to with the best characters in the market. We don’t want to work with people with bad credit history.

I want partners who can see the long term vision and help us build the business. It is a lot of work from 12 am to 5 am to prepare 8 tonnes of vegetables and distribute them. It’s an immense amount of logistics.

Future Startup

That’s a very interesting development because it also helps you to grow your numbers in terms of orders and deliveries?

Waseem Alim

We don’t actually count the numbers officially yet. Those numbers are in the experimental stage. But yes, it will. I expect this to be 30% of our vegetable business by the end of the year. But you know, it’s not a very profitable business. How much can you make by selling vegetables to retailers, right? Still, there is no rain, but if one day we could not make it due to rain and if our vegetable rot due to rain, we lose our shirt. Margin is one percent. With that tiny margin, we would need a hundred days to recover one day of loss.

Future Startup

You are working with the farmers as well, right?

Waseem Alim

Not yet. We will be starting soon. We have set up a collection center in Srimangal. We are starting to work with farmers. This is a very early project. It’s just started in January. We have some of the best guys in the company working on it. 35:19

Future Startup

On Chaldal platform, you have groceries, which is probably the biggest vertical, you have diapers and a few other products. Do you plan to expand to others verticals in terms of products?

Waseem Alim

No. We have enough in our hands. We have no plans of selling cellphones in the next two years. We are happy where we are. We want to get out of business. We want to be in the software. You know, grocery is our bread and butter. We will stay in groceries.

Future Startup

Could you connect Chaldal and your software, Chaldal becomes the front end?

Waseem Alim

Yes, something like that we can go somewhere at some time. But I think the dependency on Facebook is too high in Bangladesh. Competition with Facebook has been a challenge for many e-commerce players. I think Facebook as a front end makes a lot of sense. We are going to do more things on the backend like, logistics, payments, inventory management, maybe sourcing. But the Facebook retailers to customer interaction would be on Facebook. But the retailer can post their things on B2B platforms.

Future Startup

But at the end of the day, if you don’t control the demand, you don’t get access to a lot of data. Do you see that a long term challenge?

Waseem Alim

I think data is overrated. There are tonnes of data but people do little with it. I visited CERN last year. And you know, they have data on atomic collision. At one point what happened is that there was so much data they could not store anymore and they started destroying data. The CERN destroys data because there is no storage space. I mean it is easy to collect data. The key is that we just need enough data to form a good intuition. And then you can throw it away.

That is my personal view, not Chaldal’s. Tejas and Zia both are more into data. I’m not a data fan.

Future Startup

Grocery is a huge market. You have grown significantly compared to the last time we spoke in terms of delivery numbers. But then and again, I wonder it is not fast enough and that the opportunity is much larger? What are the reasons?

Waseem Alim

It’s an operational thing. We don’t want to deliver orders unprofitably. We can easily grow the number. If we give 10% discount, our numbers will double.

However, if you do that you become the target of eCommerce rackets. For example, you are running a bKash cash back offer, there is a group of people who game the system. They will buy one ton of oil and then sell to the local market.

If this happens, it helps nobody. It puts extra pressure on our operations and bKash is wasting money and it does not benefit the genuine customers. I want to grow genuine customers.

The other challenge is to scale the operations. Since our ambition is to deliver a good experience to our customers, I am happy with the sort of growth.

Future Startup

You said you want to take 5% of the market in the next two/ three years, what are the things you plan to do to get there?

Waseem Alim

Fastest delivery and cheaper prices.

Futura Startup

How do you achieve that goal?

Waseem Alim

Having more efficient systems.

Future Startup

How do you build that system?

Waseem Alim

More software. More hardware. More investment in technology. We are at the forefront of grocery technology in the country right now. However, we have covered only 10% of what we can imagine from a technology perspective. It is possible that Chaldal becomes the cheapest platform to buy groceries in Bangladesh.

Future Startup

To that, how do you make it cheaper for people? Do you see a point where you will not be charging for delivery?

Waseem Alim

Maybe for short bursts of time. Maybe for certain users. In general, the delivery charge is a good thing for accounting to be clean. You know what you are paying for. If we sell the diaper at a cheaper rate, then people should be aware of it. They should pay for the delivery separately. The delivery cost should be cheaper than the cost of them going to the bazaar and haggling and coming back. We want to keep a delivery charge because we want to give maximum price transparency to our customers.

Future Startup

But do you think it’s a mental barrier for people when it comes to shopping online …?

Waseem Alim

It is a mental barrier to people. We might do something strategically to make it more palatable to our users. But the delivery charge is here to stay.

Future Startup

You launched a subscription service, how is it doing?

Waseem Alim

We launched a subscription option but that did not take off. I think it is because of bad UI. We are reworking that so we might have another version of it soon.

Future Startup

That’s interesting. Do you think it’s an interesting model for grocery? Or even for the diapers?

Waseem Alim

In diaper what happens is that your child is gradually growing up. Subscription is only useful for a few weeks. The other challenge of the subscription model is that most of the economy is Cash on Delivery. That simply is not the ideal user experience for a subscription business.

Future Startup

But when you asking for subscription, you are asking for money in advance, right?

Waseem Alim

Yes, we do. But then and again, we cannot store credit card information. Thus we cannot charge on a recurring basis. That’s a barrier.

Future Startup

Is that a regulatory challenge?

Waseem Alim

There is probably a regulatory problem. I think there have been some changes on this front and we are now exploring it. We’re really working on the whole thing right now.

Future Startup

You took an office in the Jessore …?

Waseem Alim

Yes, we took an office in Jessore in the first high tech park built by the government. The place has good internet, electricity, and other facilities, etc. The government is ensuring that. That is very important for any IT business. Then we felt that people of Jessore speak clear Bangla. We have moved our entire customer service and telesales to Jashore. We are actually finding good talent in Jessore.

People in Jashore actually want to come and work at Chaldal. They are good talented people. Initially, I was skeptical about these high-tech parks but now I feel that it is a brilliant idea. It might take a bit of time but there are hungry individuals around the country who are really good. Internet will allow the country to decentralize, it is the only way forward. Otherwise, people will spend half of their life on Mohakhali flyover.

Future Startup

Have you moved any of your customer service support there?

Waseem Alim

We have 70 people in Jessore now. We are planning to get it up to two hundred people. We started with customer service and telesales, but we plan to move design and other support teams. We have people from Jessore who used to stay in Dhaka and they have now moved back. It is less expensive there and a better standard of living in many ways. They are able to spend time with their parents and family. They are accepting positions with the lower salary in some cases as the living cost is much lower than Dhaka.

Future Startup

What’s your plan for going beyond Dhaka?

Waseem Alim

Dhaka has a lot of room for growth. We deliver to every house in Banani but we don’t deliver to Jatrabari, we don’t deliver to Narayanganj. I would rather do those first than going to other cities.

As I said earlier, we want to go to one more country. I got into a bit of trouble in Chittagong Chamber of Commerce saying that we would probably do Bangkok before Chittagong. My intention was wrongly interpreted. The reason for going to Bangkok is that it proves our model to the International community. That this is not just some homegrown startup in Bangladesh, and we are a globally competitive business. That’s the intention.

Future Startup

How is your B2B business GOGO Bangla doing?

Waseem Alim

It is a small business in the sense that people keep their stuff in our warehouses and we deliver them alongside groceries. We are a bit confused about what to do with the business because there is so much competition. Everyone is bleeding money left and right. Even the post office started on ecommerce logistics. While we want to support Facebook merchants and while we will continue to give good quality support, we are not aggressive about growing this business.

Future Startup

Do you see a point where you kind of connects that with your Chaldal Systems?

Waseem Alim

Yes, I see a point. It comes down to opportunity cost of applying tech. The opportunity cost for us is very high. Because we can make so many improvements to Chaldal itself.

Future Startup

Competition is growing in the grocery space, how do you see competition?

Waseem Alim

I think it’s good. It helps to educate the market. A lot of people are getting in the grocery space without realizing how hard it is. They realize it as they start to scale. You need to start somewhere. I don’t see competition to be a major problem as there is an enormous market. If competition takes 5% of the market, there is 95% left. We are aiming for that 95% of that market.

Future Startup

What percentage of your customers come back to you and shop regularly?

Waseem Alim

In a month 89% percent of our customers are customers who ordered previously. When someone orders from us for a few months, they become a regular customer.

Future Startup

Going back to the early discussion, when you formally launch Chaldal Systems, do you want it to be a separate company or how does that work?

Waseem Alim

Probably the same company.

Future Startup

Now you are working with a couple of companies for Systems, how do you work with them?

Waseem Alim

The software will be open and we will not keep it on our server, it will be on their server. How does SAP work with them? The way SAP works, we will work in the same way.

Future Startup

That was the last question about Chaldal. Any parting thoughts on Chaldal?

Waseem Alim

You didn’t ask me about IDLC.

Future Startup

Yes, IDLC participated in your last round of investment. Could you tell us more then?

Waseem Alim

It took us a long time to figure out the mechanics.

Future Startup

How did that happen?

Waseem Alim

We closed the round in February 2018 for IFC. The IDLC money took extra time because we had to go through regulatory issues. IDLC is a proper institution – one of the best in the country. Naturally, we had to figure out compliance with the investment. We had great professionals involved in the process. I was very impressed by the IDLC team, by their legal team, our legal team, IFC – everyone worked hard to get this deal done.

It is a landmark deal for venture capital in Bangladesh. I hope more financial institutions come forward and do such deals. Ultimately the technology needs to be supported through the local ecosystems, and without investment in technology, Bangladesh will fall further behind.

Future Startup

How much have you changed as a CEO over the last few years?

Waseem Alim

It is hard to say. It seems like a long day for me since we started this company. So, you know, you don’t change a lot in a day. I’m sure I have changed.

I still pick up my phone calls. Sometimes I miss but I try to pick up every call. Previously, we didn’t have many leaders in the company. Now we do. So, I used to be more focused on getting things done. Right now, I am more focused on like making people be better leaders and solving political issues that may arise. We are a 600 person company, political issues arise. Preserving the culture has become more of my role.

I don’t think I have changed a lot as an individual. The task at hand is immense. I have a greater appreciation for Bangladeshi businessman than I did back in the days. I have I met some very interesting people who are working in Bangladesh. I have become humble by seeing these personalities. I have become a bit lazier perhaps. I spend more time with family now that I have a daughter. I appreciate family time more. Those are the changes. Previously, it was more hardcore, cut and dry. Number, no number. Now, I have softened up a bit.

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Interview by Ruhul Kader, Transcription by Ayrin Saleha Ria.

The interview was taken in March 2019.

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