Rokomari was founded in 2012 with about 10,000 books on its platform, a handful of publishers, and a small team. Over the past 8 years, the company has grown meaningfully. Today, it is a team of over 150 people, has over 200,000 books on its platform and thousands of publishers. The company does more than a thousand orders per day. It has introduced a long list of interesting features and used ingenious strategies to achieve consistently higher growth.
When Rokomari started in 2012, the ecommerce landscape of Dhaka was markedly different than what it is today. Over the past years, the market has changed. The digital commerce market has grown in Bangladesh. The market has become much more competitive. Alibaba owned Daraz and a host of local ecommerce players has been pushing the ecommerce market with a combination of aggressive marketing and discount efforts.
Rokomari has always followed a rather unconventional approach. The company, while has been pushing growth using various ingenious strategies, remains strategic regarding how it pursues growth.
Instead of freely investing in growth through the means of discounts and cash backs, it has been using content, loyalty programs such as user points, gift vouchers, email marketing, and various growth hacking techniques.
While it has been able to achieve meaningful growth using low-cost yet effective growth hacking techniques, the company made little progress towards expanding beyond books, an area that remains a critical challenge for the company.
If Rokomari doesn’t want to be a niche ecommerce player and aims to remain competitive, expansion is a must. Ecommerce at scale is an aggregation business. In order to be able to compete with other big players in the long run, Rokomari has to be able to expand and build a solid base in more than one vertical. If the company wants to remain a niche ecommerce player, that is an entirely different discussion. There are ample opportunities to pursue a niche in ecommerce in Dhaka as well as anywhere in the world.
However, the behavior of Rokomari suggests that the company wants to expand beyond books.
The company has tried expansion before. It tried DVDs and similar products and educational items with little success. DVD has been rendered obsolete due to technological changes and expansion with educational products is simply not enough.
The company has been experimenting with a new model of late, which it calls the Boi Toi model. More on that in a bit. Before a little bit about expansion.
Expansion is always hard. Digital platforms starting from ecommerce to services, everyone followed a rather focused approach to expansion across markets. You first start with one product, build a strong market presence in that vertical and then gradually move into other relevant verticals using the knowledge and expertise. This has been the case with Amazon and many other successful digital companies across the world.
However, this trend has played out differently in Bangladesh. Most digital platforms in Dhaka started with multiple verticals from day one. Rokomari remains an exception. One logic local operators use in favor of this strategy is that consumer experience has been shaped by global platforms. Since people have already seen aggregator platforms, they want everything in one place. While this idea sounds logic as well as lucrative, it is not so in reality because it is expensive and hard to pull off such a model for several reasons: 1) it is expensive 2) it is inefficient, at least in the early days 3) it puts an extra burden on focus and resources.
If you look around, this has been the case with most companies in Dhaka. Started with multiple verticals. Few verticals do well but not well-doing verticals keep on dragging the company down.
Rokomari did not make this error. While it saw through some expansion experiments with mild successes and outright failures, it has remained focused on books and it tried to do it to perfection.
The company is now eyeing expansion both vertically into new categories and horizontally into new segments of books such as academics where it was not doing as well.
In a recent interview with Future Startup, Rokomari founder Mahamudul Hasan Sohag told us that the company is exploring expansion beyond books of late. However, the company is exploring expansion differently.
Instead of expanding into a vertical as a whole and independently, it is expanding in relation to books as related products. With every book, Rokomari would show related products. This is an excellent strategy to approach vertical expansion for Rokomari. The risk and cost of failure go down. The upsides are many.
“We are exploring new ideas for category expansion,” Mahmudul Hasan Sohag. “We have tried to add new product lines along with books in the past. This time we are trying it differently. Instead of introducing new categories of products, we are exploring it in a way that makes it much more relevant. We are calling it Boi Toi model where we are introducing relevant products with different books.”
The company says it has already started doing it with about 100-150 categories on a limited scale. The idea is to suggest some associated products that would be useful for the readers of the books that they purchase. For example, if you are reading a book on turkey farming, you probably will like some of the products related to turkey farming such as turkey foods, etc. Now when someone is seeing a book on turkey farming, we show them products related to turkey and turkey farming. We are placing some other products as well such as backpacks, stationery items, etc., says Mr. Sohag.
The company says it uses a little bit of machine learning and AI to do some of these things. However, Mr. Sohag says the technical requirements for implementing such a feature is not that high. “For example, if we want to sell diapers, Bornomala boi customers will be our target group. So we need to place diapers in places of the Bornomala books.”
“Our major verticals are going to follow the Boi Toi model,” says Mr. Sohag. “We are not exactly clear about the categories for diversification yet.
While Rokomari is putting together a strategy to get into multiple verticals, the company says it has also been working on plans to go deeper into books. Over the past years, while Rokomari has been able to position itself as a go-to place for books in Bangladesh, the company has not been able to equally penetrate all categories. The company is now eyeing new categories such as academic books, jobs, and test preparation books and so on. These segments are potentially huge markets compared to existing non-fiction segments where Rokomari dominates.
“While we have done well in some categories, we have not been able to penetrate into some of them even more interesting categories,” says Mr. Sohag. “We haven’t been able to penetrate into the textbook category yet. For example, the test paper market is huge. This is a market of several hundred crores. We only penetrated some portion of it. If we compare it to other categories like fiction, the volume is incomparable. A single Panjeeri guide is sold several hundred thousand every year.
“The academic book is a major segment that we have not explored yet. Then there are job-and-career-related books which is a huge market. We are exploring some of these segments at a small scale as experiments and hope to go deeper in the coming years.”
Rokomari has been bootstrapping over the past years. The company says it does not plan to raise external investment in the near future. It will be interesting to see how it pulls off an all-out expansion plan without external investment.
Dhaka’s ecommerce is just getting started. If some major multinational players such as Amazon come into the scene and disrupt the market with aggressive play, there is enough room for slow and steady growth. Having said that, while there is time for slow and steady growth, in digital time is often fast and things change overnight.
Rokomari is doing a lot of things. The company is not loud per se. For example, it silently launched its ebook app Muthoboi a few weeks ago. It launched a loyalty program and gift voucher product of late without much fanfare. The company tried expansion in the past with limited success and some failures. This time around the company does not want to repeat those old mistakes. Because time is always of the essence.