Parvez Hossain is the Co-founder and CEO of SWAP, a Dhaka-based fast-growing reCommerce company. Launched in 2020, within just two years, SWAP has become an important player in Dhaka's recommerce space and has experienced excellent growth helping take the nascent industry to the consciousness of the mainstream. It is one of the four Bangladeshi startups that have been selected in the latest cohort of Accelerating Asia.
In this wide-ranging interview with Future Startup's Tithi Chowdhury, Mr. Parvez reflects on his journey to what he is doing today, talks about how SWAP came into being and has grown from a small operation to a dominant reCommerce player in Dhaka, the state of SWAP’s business today and ambition going forward, offers insight into the reCommerce industry in Bangladesh, shares his takes on building businesses from scratch, and reflects on the lessons he has learned from his journey so far, and much more.
Future Startup: Thank you for agreeing to this interview. I want to start with learning about you, could you please tell us about your background and your journey to entrepreneurship?
Parvez Hossain: I was born and brought up in Dhaka. My school was St. Joseph Higher Secondary School and my college was Notre Dame College. After my HSC, I got into the BBA program of IBA of Dhaka University. I graduated from IBA in 2006. In 2007, I joined British American Tobacco and worked there as a territory officer in the marketing and distribution department for one and a half years. Then I joined Rahimafrooz where I worked for six months.
I started an electronic gadget business besides my regular job. I had a shop called Livewire. In the beginning, we operated offline, and eventually, we launched an F-commerce operation. Today, we have 15 showrooms. That’s where my journey as an entrepreneur started.
Future startup: How did you come up with the idea of SWAP? What was the motivation behind?
Parvez Hossain: We saw that we were serving a limited number of people in Dhaka through Livewire. During the last two years, we have been expanding Livewire outside Dhaka. I eventually realized that, if we can provide people with easy access to electronic gadgets then we will be able to serve a larger number of people. That’s when we came up with the idea of SWAP.
Nowadays people sell a lot of things besides cell phones and when they want to sell something, they have to go to a showroom or upload a post to an online platform. When you want to sell something online you have to provide your personal information, which is not safe. Besides, there is no guarantee that the person who has shown interest to buy your product does not have any ill intention.
Also, there are a lot of people who have unused sellable electronic gadgets that could be useful to another person. As a result, a large amount of e-waste is being generated. Bangladesh generates 500k tons of e-waste annually, which will reach upto 4.5 million tons by 2025. If people could resell their electronic gadgets, this problem could be resolved.
To resolve this issue and make selling anything online more convenient, we started working on SWAP in 2019 and eventually launched on February 20, 2020. That’s how SWAP came into being.
Future Startup: While building SWAP how did you put together the initial resources i.e capital, people, and other resources?
Parvez Hossain: I was running my business for quite a long time before SWAP. I already had some savings which I invested in SWAP. We raised angel investment from Tanvir A Mishuk, the Managing Director of Nagad. We approached him and he agreed to invest. He has helped us in building the infrastructure and network.
For hiring the right people, we took support from the HR department of Nagad. As our idea was completely new from Bangladesh’s perspective, it was important for us to have a well-built team for handling the technical aspects of SWAP. We could outsource and get a website developed. But those kinds of websites are not scalable. So we needed to build a good team to handle SWAP’s technical part. With the help of Tanvir bhai and our own funding, we hired the right people and built a great initial team. That’s how we put together our initial resources.
Future startup: Could you please walk us through the journey of the early days of SWAP? What are some of the major challenges you faced in the early days of SWAP?
Parvez Hossain: Although we were lucky to have good people, the main challenge for us during the early days was to find the right resources. I still remember someone, whom we almost hired. But he did not join when he got a job offer in a big company. We faced these kinds of difficulties a lot in the early days.
We started SWAP out of a one-room office where four of us used to work. Then after four months, we rented an office in Banani.
Startups are full of uncertainties. You do not know when you will reach break-even. We were in those situations as well. However, we were confident that SWAP would be successful, which motivated us to move forward.
We had to rebuild our team several times. It was like a journey where we had to part away some people at a certain stage and hire new people. Because you need to form a team with people with the right mindset and skills to run a startup. Building the right team was the major challenge for us in the early days. While it has improved a lot now, we still face this kind of challenge. It is a continuous journey.
Future Startup: Could you give us an overview of SWAP today i.e: services you offer, business model, how your operation works, team size, and size of business?
Parvez Hossain: Currently, we are a team of 46. SWAP is a C2B marketplace. In other C2C marketplaces where individuals sell their products to other individuals, there are a lot of safety issues and problems regarding the pricing of the product. Right pricing is a very important factor.
SWAP resolves these issues by providing people with the right price of a product based on the options they select.
While fixing a price SWAP, analyses the condition of a product and gives a price accordingly. We constantly remain updated about the market price of different products so that we can give the best possible price of a product to both the sellers and the buyers.
We have collaborated with other companies such as Samsung, Oppo, Apple, OnePlus, Vivo, Motorola, etc. We have partnered with Pickaboo, Robishop, and Gadget & Gear. We have recently finalized our agreement with Daraz and launched a campaign before Eid. We have also finalized our deal with Symphony, Realme and from next month we will launch a campaign collaborating with them. Currently, we are in talks with Xiaomi and Tecno which will make us the sole exchange partner of all the big OEMs in Bangladesh.
We want to make it easier and convenient for people to sell their products. If you want to sell a product, our personnel will go to your address to pick up the products. We have collaborated with other companies to make this process easier. You can also sell your products in the outlets of our partners. If you want to buy another product in exchange for your product through SWAP, you can use a voucher from Daraz or Pickaboo to order the product you want in exchange for your product from their website. This offers people an opportunity to sell their old items and buy new products using them. For many people with limited financial capacities, this solves an important problem and improves access to newer technology.
We have also run a furniture exchange campaign with Brothers Furniture. We are planning to partner up with motorcycle companies as well. We postponed the plan due to the pandemic for now.
Currently, we are having really good traction. Thousands of people sell their products every month through our platform. We have a GMV of around $1M every month. The numbers are above our expectations in just 14 months.
Future Startup: What are some of the strategies that have helped SWAP to come this far?
Parvez Hossain: Partnering up with OEM companies has helped us to grow significantly — these collaborations with popular brands like Samsung or Oppo gave us a big exposure. As customers of these brands use SWAP, it brings down our customer acquisition cost.
We have partnered with retail stores like Rio International, Sumastech, Gadget & Gear that sell electronic gadgets. Since they already have a customer base, they can tell their customers to sell their old products through our platform. It would cost us a lot if we would try to reach these people. These retailer partners have played an important role in our growth.
Recently, we have launched a campaign with Nagad, where if a Nagad user transacts money through Nagad while buying or selling any item through SWAP, s/he will get 5% cashback. All of these collaborations have helped us to reach our potential customers.
Another factor that has played an important role in our growth is customer obsession. We have tried our best to give our users the best possible experience. Either our agents go to the sellers to pick up the items they want to sell or they can sell their items in the outlets of our partners. As we fix a price beforehand, it reduces a lot of unnecessary hassle and bargaining for both the seller and the buyer.
For digital outreach, we are using social media. We have collaborated with social media influencers who have a large number of followers. Despite not boosting our page, we have around 56k followers on our Facebook page and 145k group members in our Facebook group.
We have taken an omnichannel strategy for growth which has helped SWAP achieve consistent growth.
Future Startup: What are the challenges now?
Parvez Hossain: The pandemic has taken a toll on the overall business. The overall demand has dropped for luxury and technology products which will eventually pick up. Since the outlets of our OEM partners and retailer agents were/are closed due to the pandemic which has taken a toll on our customer interaction.
The second challenge is customer education regarding our service. Many people are yet to understand how to use our service to sell and buy products, as it's still a novel idea in Bangladesh. To address the challenge, we have a customer service team to assist our users. When someone needs any assistance they can directly click on the pop-up on our website to ask for help or call our hotline. We need to educate people on why they need to sell their unused items and how that can help another person from the lower tier to afford technology as well as save the environment.
We are looking to raise further investments which will help us to go further.
You have made it to the latest cohort of Accelerating Asia along with three other Bangladeshi startups. Tell us about that experience.
Getting into the latest cohort of Accelerating Asia was a blessing for us. There were more than 500 applicants and we were confident that we could give a fight at least. Although nothing was certain. We had to go through several rigorous processes. Total 11 startups including 4 Bangladeshi startups made it to the latest cohort of Accelerating Asia.
The founders and mentors in this accelerator program are great and super helpful. You can ask for their help anytime. The program comes with a ton of learning and networking opportunities. The mentors connect the founders with a lot of VCs and angel investors. They help the startups to identify the weaknesses and address them. The journey has been a wonderful experience for me.
What are some of the mistakes you’ve made, if any, in your journey that you think other entrepreneurs should avoid?
I’d like to suggest to young people that if they want to do something, they should go for it. I have had this idea of SWAP since 2017. But it took me more than a year and a half to make the decision. Because founding a startup is not an easy task and you have to give your 100% to make it successful. I already had a business called Livewire and I was doing quite well. When I left my job in 2009 and decided to do business, all of my relatives and friends discouraged me. Many people consider getting a stable job is better than business. But jobs do not provide talented people the opportunity to unlock their full potential.
I left my job after working for around 2 years and started my business. But deciding to start my startup was a challenge for me. Because you have to burn a lot of cash while running a startup and there is no guarantee of profit in the beginning. Many people are not ready for this struggle. It took me a long time to start my startup because of pondering on this idea. I talked with many people who promised to support me. But later they did not. As I was adamant about it, I decided to start by myself.
If anyone wants to start their startup, they should start working on it immediately rather than waiting for long. Because the more you wait and overthink, the more you will waste your time. And the success of a startup depends on the timing. If you lose the timing someone will do it and you lose the 1st mover advantage
Future Startup: You have worked for around 2 years for other companies before starting your own business. Many young people want to start their business early, maybe after graduation. From your perspective, which one is better?
Parvez Hossain: It varies from person to person. From my perspective, it is better to have working experience before starting a business. Besides, you can meet mentors while working for a company and learn from the leaders of the industry. I have learned a lot while working in BAT including ethical grounds, processes, leadership, etc. I think it is better to have work experience for a year or two.
Of course, you can start your business after graduating from university. But you will not get enough opportunities to learn the culture and other aspects of the business before starting your own business.
Business is not only about money. To run a business, you need skills and connections. The connections you will build while working a job can help you to go further in your business. The network, expertise, and knowledge you gain from a job can help you reach your goal.
Future Startup: What are the lessons you have learned so far?
Parvez Hossain: To run a business successfully, you need to build a strong PR (Public Relation). I have always been an introvert. I would not know how to respond when someone would praise me. I’m still learning how to approach people. When I started to come out of my cocoon and connect with people, I realized how big this world is. There are a lot of people who are creative but do not showcase their talents because of being an introvert. I consider myself lucky that I have come out of my introverted nature.
Future Startup: What do you think about the re-commerce market of Bangladesh? Where do you see the market going after a few years down the line?
Parvez Hossain: This market will grow very big within the next few years. The market is so huge and has so much potential that SWAP could not even cover 1% of the market. To be precise, the global market of used smartphones was worth $17B in 2017. Now it has grown exponentially to $42B in 2020. The global used market of the automobile, smartphone, laptop, and furniture combined in $1.48 Trillion. More startups have joined this niche within the last five years such as Backmarket in Europe, Droom, Car24, Cashify, etc in India, and Kavak in Mexico.
Every year, smartphones totaling 10 million units are sold in Bangladesh and this number is growing with a 5% CAGR. This market is going to be very big and through our platform, we want to make smartphones accessible to lower and middle class people. We want to launch a financial installment model to make expensive items more accessible to people.
If we include other reusable products including furniture, vehicles, and other electronic gadgets, in our calculation it is a $2.6 billion market in Bangladesh. If people can sell their used products instead of throwing them away, it will reduce our environmental pollution and make these items affordable for other people of limited income.
Future Startup: What are some of the plans for SWAP in the next couple of years?
Parvez Hossain: We have a couple of priorities. One, we want to improve on the technological aspect. We want to provide people with better and future pricing even with our AI-based pricing engine that will be able to give people an understanding of the salvage value of what they possess. We want to give our customers the option to exchange their products, such as exchanging a smartphone for a laptop or exchanging old furniture for a brand new laptop. We want to make this whole process more convenient. That is why we have collaborated with Daraz, Robishop, Pickaboo, Brothers Furniture, and almost all OEMs of smartphones in Bangladesh.
In the coming years, we plan to expand outside Bangladesh. The market for recommerce is big and it is an idea that you can take anywhere.
Future Startup: How do you deal with stress and stay productive?
Parvez Hossain: I would say like almost all other founders, sometimes I feel like giving up because of the high amount of stress that comes with being an entrepreneur. The hours are long. The demands are huge. But then I think that I can not give up. There are days when I work for 24 hours straight in my office with my team. I am very lucky that I have an excellent team.
My wife has been very supportive which helps. When I share my thoughts with her, she encourages me and she helps me augment customer experience as she graduated from Hospitality and Tourism management. She gives me a lot of strengths.
My co-founder at SWAP Tonmoy Saha is a pillar I lean on when things get tough. He is a very positive person. Whenever I feel demotivated, he encourages me. Having people who support your ambition and encourage you are critical for early-stage founders.
I try to take some family time out of work time and spend it with my daughter and she is the boost I need to get myself going.