Evaly Founder and CEO Mohammad Rassel talks with Ruhul Kader about the meteoric rise of Evaly and its fast-expanding universe, the state of Evaly’s business today and its ambition going forward, the evolution of Evaly over the past months, cracking the ecommerce growth code, why price remains the key factor in retail, lays out Evaly’s game plan for becoming the largest digital commerce company in Bangladesh, why patience is the most important skill founders should develop and much more.
Ruhul Kader
It has been a while since we last spoke, Evaly has changed a lot over the past few months, how are you doing at Evaly?
Mohammad Rassel
We sold almost BDT 230.00 million worth of products between July-August this year. We’ve already seen a huge hike in September as we launched one of our biggest campaigns this month. We are expecting around BDT 350 million in sales from this one campaign.
In terms of number orders, the number is not that impressive. But the order size is big because we are selling mostly large and expensive products such as laptops, computers, mobile, etc.
We have built rather efficient operation management. In spite of having a sales figure close to that of Daraz, our operation is significantly lean. Our team is meaningfully smaller.
There are some complaints regarding our service, which we regret. We have taken meaningful initiatives to address some of the challenges regarding customer experience. However, there are certain challenges when it comes to dealing with high-value electronic products such as refrigerators and air-conditioners and so on.
The electronics products have a longer delivery period in terms of communicating with the mother company and resolving the issues and then ensuring the delivery. As a consequence, sometimes we fail to ensure on-time delivery. Hence, many customers rightly criticize us.
However, all of our customers get their products delivered. We ensure that part religiously. At the same time, we are working hard to ensure that we improve our service quality and our customers get better experience shopping at Evaly.
Customers anywhere in the world prefer a better price. Price is how Walmart has built Walmart – everyday low price. Price is how best of the retail companies across the world attracts customers and retains them. From day one, we have realized that price remains a key factor in attracting users to ecommerce. Hence, we have made a real push to offer the best price possible in the market to our customers. One of the ways we do this is through various offers and discounts. However, it is important to mention that low price does not mean lower quality. Lower price simply means that you build efficiency in your system so that you could reduce your operational cost and then pass on the savings to your customers. We have been trying to do that. This is what best of the retailers in the world do.
Ruhul
What is the fulfillment rate?
Rassel
We take advance payment for all our products. Everything is prepaid. We don’t have any COD. So far customers have responded positively. So our fulfillment rate is almost 100% if there is not a case of a return or replacement.
The only objection that we get is regarding delivery length and quality of services. We are working on those issues.
Ruhul
The last time we spoke, you were just getting started. It has been about six months now, how much has Evaly evolved? What are some major changes that took place over the last few months?
Rassel
We have launched a better version of our website. We launched our app. We have more work to do on these two platforms, but they are in the much-improved format now than a few months ago.
We have created a Facebook offer and review group which has become the largest ecommerce group in the country larger than any other similar Facebook group. We have around 45,000 members within three months. We launched our app about 45 days ago and it now has more than 50,000 downloads.
We have figured that the people who come to our website mostly come to order. Our conversion rate has been excellent.
Ruhul
How does your website user size look like?
Rassel
We get over 40,000-50,000 users at the peak and 15,000 users on a regular day without any event or promotion. The website is still undergoing some changes. We will be releasing an improved and complete version shortly. As a result, we don’t promote the web that much.
We are getting 5,000-10,000 users in the app without any promotion. While our website traffic does not look that promising, our sales volume is very high relative to that. We have figured that the people who come to our website mostly come to order. Our conversion rate has been excellent.
Customers anywhere in the world prefer a better price. Price is how Walmart has built Walmart – everyday low price. Price is how best of the retail companies across the world attracts customers and retains them.
From day one, we have realized that price remains a key factor in attracting users to ecommerce. Hence, we have made a real push to offer the best price possible in the market to our customers.
One of the ways we do this is through various offers and discounts. However, it is important to mention that low price does not mean lower quality. Lower price simply means that you build efficiency in your system so that you could reduce your operational cost and then pass on the savings to your customers. We have been trying to do that. This is what best of the retailers in the world do.
When a customer gets a product on discount, they not only buy it themselves, they promote it and tell other people to buy it. As a result, we have grown from word of mouth as well. I would say that word of mouth has been a strong growth driver for us. We have grown consistently since our launch. Our first campaign brought in around BDT 1 crore revenue. We did BDT 3 crore in the second campaign, BDT 7 crores in the third campaign and we are estimating sales around BDT 250 million in the on-going campaign. That leaves us with a 2X monthly growth.
This strategy has worked so far for us. We have seen astounding growth over the past few months. Our turnover was close to USD 3.00 million in the past two months.
If you consider the overall ecommerce landscape in Dhaka, we are the second largest in terms of sales volume and revenue. We have achieved this just within six months. Our promise to the best value to our customers has helped us to achieve this growth. What we have tried to do from the day on is offering our customers price benefits. An opportunity to save a few bucks through. We are facing some complaints because our orders had been unprecedented.
There are certain challenges to this strategy. One, brand sellers assume that the market rate of their products would be affected, which is a worry unfounded in reality. Instead, what we have found that through discounts we are giving access to people to products that they would not have tried otherwise. Once they get to learn about a product, they then later purchase it at full price. But sometimes it is hard to convince our brand sellers that offering discounts on an ecommerce platform is not essentially a bad idea.
Second, there is a competitive pressure and people think that through offering discounts and other benefits to customers, we are hampering ecommerce ecosystem, which is a perception I strongly disagree with. Over the past month, we have taken ecommerce to many people who never heard about ecommerce before.
Eventually, these people start using ecommerce more regularly and would shop not only from Evaly but also from other ecommerce sites.
Ruhul
How much Evaly has evolved as a product?
Rassel
Our marketplace was nearly empty. We had many sellers but they didn't start the operation. The dynamic has changed over the past few months. Our monthly seller growth rate has been 4X in the last few months.
At first, the sellers were observing, now they have begun selling their products. We have got many offline sellers who were not interested in the beginning. We have reached agreements with 15 big companies. We can now sell Samsung, Hero bike and a long list of other prominent brands.
There is a competitive pressure and people think that through offering discounts and other benefits to customers, we are hampering ecommerce ecosystem, which is a perception I strongly disagree with. Over the past month, we have taken ecommerce to many people who never heard about ecommerce before. Eventually, these people start using ecommerce more regularly and would shop not only from Evaly but also from other ecommerce sites.
Ruhul
How many merchants do you have in total?
Rassel
We have about 16,000 registered merchants on the platform. Of them, about 10,000 are active and trying to sell products. We are generating sales for almost 10%-15% of sellers. The rest are sleeping good. We need to boost our sales if we want to take them in.
Ruhul
What is your relationship with them?
Rassel
We have three types of relationships with merchants. There are brand sellers who get support from us. We have agreements with them. We help them create a virtual store and manage these stores for them. However, we do not warehouse their products.
They send us the pictures and availability of their products; we update that accordingly on their virtual store. This is a much more dedicated service. These brands sellers are one type of sellers. We give them full support.
Ruhul
What do you get in return?
Rassel
They give us a commission in return. There is no standard commission yet. We charge up to 40% to some brands, such as lifestyle products, depending on the product type. There are categories where charge as low as 5%. The commission is a must for brand sellers.
In the second phase, we have retailers who manage their virtual stores but they enter into an agreement with us and get an official store on Evaly website. We call them "off day seller". For example, we have given an official store to big retailers like Startech. We help them and they also help themselves. We do not take any major commission from them as of yet. We charge commission some of our official store sellers, a small percentage of them. We don’t take any subscription fee either. This group consists of the largest selling group. We have big plans for them.
There is a third group seller. We do not take any commission from them and nor do we control. They are unofficial sellers. They need to have a physical shop and a Facebook page which he must be running for a certain period. We permit them to open up a shop here. We do not give any product guarantee or warranty for those sellers. It's kind of a Facebook page. If somebody searches by their names they will appear. The growth rate is very high for this type of shops, growing at almost 2X-3X times every month. They are also joining in offers and promotions.
These are the three categories of sellers that we have. Currently, we actively charge a commission from only one group of them – brand sellers and a small group of official store sellers and big retailers.
Ruhul
How does your logistics work?
Rassel
We have an in-house logistics team that deal with within Dhaka deliveries. We also work with third-party delivery partners. So far, we are happy with working with our third-party logistics partners. We don't have plans to make heavy investment in logistics anytime soon.
Ruhul
In our first conversation, you said you wanted to build the everything store of Bangladesh, how are you doing to that end?
Rassel
We’ve made some progress. We have a long way to go and I would say we are just scratching the surface. But we have made some progress as well. As I mentioned earlier, we have a growing number of sellers. All types of them. We have brand sellers. We have big retailers. We have offline retailers coming online for the first time using Evaly. We have small facebook and online sellers who are now using Evaly. So, we have made some progress to that end.
We have also been building out web and app from the ground up because we wanted to build custom features that allow us to become the everything store. Our infrastructure is designed to achieve that goal.
On the product front, we have sold almost all types of products. We are only lagging in fashion items. We have not been able to ensure the proper experience for the fashion segment. Other than that, we are going for all other items. We just sold a car today. We haven't sold any property yet. We sold rod and cement, jewelry, grocery and everything in between. We haven't been into the food and air ticketing service. Other than these major categories, we have sellers and sales in almost all categories. We have achieved about 40% of our initial goal regarding everything store. However, we are still far from creating one.
Ruhul
You mentioned that competitive price is one of the things that have helped you grow fast, what are the other reasons for your growth?
Rassel
One other factor is timing. We entered the market at a time when the market has matured to some extent. When other players decided to take a slow and steady strategy after years of hard work, we entered the market and found a market which is almost ready to be disrupted. Had we started earlier, I don’t think we would have been able to generate this level of growth.
We probably need to thank Alibaba! We did not have to make any investments for educating the customers about e-commerce. Government has a far bigger contribution. Telcos, policymakers also have some contribution. Four or five years ago this would have been impossible. Other players helped in many ways by educating the consumer about e-commerce.
Technologically, our timing has been perfect. 4G was not available even two years ago. We did not do anything exceptional or charismatic. We have also got the benefit of being a Bangladeshi homegrown company. People love the fact that someone of their own is building a great ecommerce platform.
While we don’t worry much about retention, our NPS (net promoter score) is quite high. Our growth has largely been driven by word of mouth. Our customers almost always refer us to their friends and family. We’ve found that word of mouth is the best way to growth. Nothing else works as good.
Ruhul
How big is your team right now?
Rassel
We are a team of 145 people.
Ruhul
How many orders do you receive daily?
Rassel
So far, our orders are mainly offer based. The reason being we don’t encourage our customers to order beyond offers. Our average basket size is around BDT 20000 and we serve monthly around 10,000 orders. The number of orders is not that high but our basket size is quite large.
While we are creating a lot of buzz regarding offers and discounts, we are not pushing much for growing our numbers dramatically because it would create extraordinary pressure on our resources.
If we want to double our orders, which we could do easily, we have to immediately hire 100 more personnel. We have created an artificial barrier to keep the overall order numbers low and encourage larger basket size shopping such as you can’t order below BDT 500 on Evaly. If we withdraw this range we will easily go close to the leader in the commerce space. We do not sell on a small scale to ensure the quality of our service.
Ruhul
What is your retention rate?
Rassel
While we don’t worry much about retention, our NPS (net promoter score) is quite high. Our growth has largely been driven by word of mouth. Our customers almost always refer us to their friends and family. We’ve found that word of mouth is the best way to growth. Nothing else works as good.
Our Facebook group has reached to almost 45,000 members within a very short period. This is a huge number for us. Our user growth rate is at least 3X to 4X compared to others. We call this reference growth. On social media, we have a higher direct conversation with the users.
Ruhul
You told about the criticism regarding customer service, delivery time, etc. and there are complaints against Evaly regarding poor customer service, how would you address them?
Rassel
I acknowledge that we have some limitations regarding customer service. This is mainly because we got more orders than we expected. So we might not deliver service as good as we expected. But we are working hard on it. Hopefully, our service quality would improve as we go and raise funding soon which would allow us to invest in infrastructure and customer service efforts. Since we have been working hard to offer price benefits to our customers, it has taken some toll on our ability to ensure better service, but we are now looking into those issues and hopefully, our customers would receive better service in the near future. We are improving almost daily on this front.
Ruhul
Have you raised investment? You have been eyeing investment for a while now?
Rassel
We have made few investments from personal wings. We are in talks with a few institutional investors and we are close to achieving that target. I would say we are in the closing phase. Over the past months, we have been speaking with potential investors and have been working on meeting all the requirements for attracting investments. We are doing internal and external audits. We have hired for all of our C-level positions. We have already brought in other structural changes. We are now near closing our first round of external funding.
Ruhul
What is the challenge for you right now?
Rassel
Investment is not a challenge right now. Our goal is to be the leader in e-commerce. We do not have any challenges with running the operations. But for leading the e-commerce, we may have to go into some strategic partnerships. That’s where our challenges lie.
We are not looking for mere investments, we are looking for strategic investments from people who understand this sector and could help in achieving our vision.
Well, I don’t agree with the point that people should buy without an offer. If you can build a business that goes well with offers, why should not you try that? Everyday low price at Walmart is sort of an offer.
Ruhul
Could you please tell us more about Evaly as a product?
Rassel
We have huge work going on regarding our platform. We have been working on some exciting features. I can’t give you details because we have not launched them yet. What I can tell you is that we are eyeing seriously into MSME, MSME financing and related areas and we are developing solutions for that.
Ruhul
What is your overall observation regarding ecommerce?
Rassel
The main reason behind the slow ecommerce adaptation in Bangladesh is because of a lack of incentives for users. People say convenience is what they are offering. But convenience is not a strong enough incentive. Evaly's current growth shows that if you could offer the right incentive, people are willing to shop online. We are expecting a major change in customer behavior within the next year.
Ruhul
How many users order without offers?
Rassel
Well, I don’t agree with the point that people should buy without an offer. If you can build a business that goes well with offers, why should not you try that? Everyday low price at Walmart is sort of an offer. If you can run a business with offers why would we think otherwise? It's not like that we have to do it using the same model.
Ruhul
But how do you ensure your sustainability and profitability?
Rassel
Now that’s a legit question. We have plans and strategies in place that we believe would allow us to deal with this challenge and be a profitable operation while offering the best price to our customers. I can’t disclose the details but we are working on things that you would come to see in the future.
Ruhul
That was the last question regarding Evaly. What are some lessons you have learned over the years?
Rassel
If you want to do anything of consequence, there will be challenges and difficulties. Be prepared for them but never lose hope.
Be patient. There are things that you can’t fix overnight. For example, if you break a limb of your body, you have to give it enough time to heal. There is nothing you could do to fix it overnight. It would take time to heal no matter how much treatment and medicine you take. Life is like that. Everything takes time. Everything heals with time. If you hit a wall and can’t do anything about it, give it some time. It will heal. Sometimes I may feel that the problem at hand needs to be solved immediately. But it can’t be done that way. An even better way is to wait and let it go.
Be patient. There are things that you can’t fix overnight. For example, if you break a limb of your body, you have to give it enough time to heal. There is nothing you could do to fix it overnight. It would take time to heal no matter how much treatment and medicine you take. Life is like that. Everything takes time. Everything heals with time. If you hit a wall and can’t do anything about it, give it some time. It will heal.
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