This issue covers:
A lot is happening in Dhaka’s ecommerce sector. The vertical has seen phenomenal growth over the last two years, thanks to the coronavirus pandemic and a miscalculated growth push with heavy discounts from several companies. The latter, however, is not looking up for any of those companies.
The sector saw a series of events in the last two weeks, albeit a continuation from previous weeks. Customers' protest against one company called e-orange resulted in litigation and owners are now in jail. Evaly asked for an extension for offering explanations and delivering products to customers.
Bangladesh Bank data shows the sector saw a drop in transactions in June for the first time in a while. While it is hard to name one particular reason for the drop, a combination of chaos in the sector, declining customer trust previously mentioned by several media reports, and measures taken against companies offering unreal discounts could be some of the contributors. Similarly, it could be a completely normal drop post-Eid.
On aggressive growth strategy. While offering discounts and free lunches are common in venture building in tech, what happened in Dhaka’s ecommerce sector in the name of heavy discounts in the past months was a pure mess. Many people try to bring up the fact that companies like Uber continue to burn millions of dollars in subsidies and discounts. Amazon is famously known for not making money in its early days for which many analysts used to call it Amazon.toast during those early years.
The difference between Amazon and Uber and the ecommerce companies such as e-orange offering maddening discounts in Dhaka, many of them are now in hot water, lies in who is paying for the discounts.
For Uber, it is Uber that is paying for the discounts and the company has a plan, a strategy how it wants to recoup that money as it builds a dominant transportation business. Almost all of these tech companies raised millions of dollars in venture capital money so that they could give discounts, grow fast and break things. They not only offer huge discounts but also offer excellent customer service. Amazon is famously known for its customer obsessions. The same is true for Uber and many other tech companies that use these growth strategies.
For companies like e-orange, however, discounts could be paid for by customers. The only problem is that it does not work that way. If you want to achieve hyper-growth, raise investment or invest your own money so that customers don’t suffer. Customers want discounts and they want to have it without waiting endlessly or at times losing money. Trying to pay for discounts of one customer with the payment from another could work in the short run but you don’t call it a strategy.
By all means, the sector needs better policy initiatives and regulatory measures.
We are seeing a few other developments as well. Two local publicly listed conglomerates, Golden Harvest and Walton announced their own ecommerce ventures in the last two weeks. Both companies want to build general-purpose marketplaces with some distinctions — Golden Harvest is getting into food and medicine delivery along with a few other verticals whereas Walton did not mention anything about food delivery. It appears both companies see an opening in the sector with the recent growth and ongoing chaos. One thing, however, is certain that ecommerce is not going to be any easier for these new entrants.
As I have written before, ecommerce remains underpenetrated in Bangladesh. It offers opportunities for new players. It also indicates a potential bloodbath of competition in the sector in the coming years. What happened in the past few months with unruly discounts and failure in customer service from certain players also indicate a policy failure in the sector. To that end, regulators should prepare for what is about to come in the coming months and years.
2/ Amarlab launches in Chattogram. Digital healthcare startup Amarlab has launched its at-home diagnostic test services in Chattogram. The company has been working on the ground for the last few weeks and it finally started serving customers in the city from last week. Chattogram is the second market for the company after Dhaka. The company says it has partnered with almost all prominent diagnostics centers in Chattogram including Popular, Ibn Sina, Chevron among others and looks to onboard more partners in the coming months. Amarlab clearly wants to expand to more cities in Bangladesh. To that end, Chattogram is an important market for the company. Success in the port city will tell both Amarlab’s operational capacity to scale as well as whether there is a real demand for the service in other cities.
Context: Amarlab, a Dhaka-based digital healthcare startup, originally started with on-demand at-home diagnostics services. The company has since expanded to several verticals, taking advantage of the integrated nature of the healthcare service, including online doctor consultation, a platform for doctors to run their practices digitally, etc. The company is a graduate of Accelerating Asia, a Singapore-based accelerator program and startup fund.
How it works: Amarlab partly works as an online marketplace for diagnostic centers and hospitals where it enables patients to take at-home diagnostic tests from their preferred diagnostic centers. The company, however, facilitates and manages the sample collection itself and labs only do the testing part.
After a patient chooses a test and a lab, Amarlab staff visits the patient at their location to collect samples. The company says it uses its own sample collection kit and process and ensures the safety of sample collection. Once the test is done, it then collects the report and delivers it to the customers.
2/ Bohubrihi on MyGp App: Early in August, Bohubrihi, the Dhaka-based edtech startup, announced that some of its paid and free courses are now available on MyGP app, the dedicated app for Grameenphone users. Under the collaboration, MyGP users will be able to access some of Bohubrihi courses for free and get as much as 25% discounts on others.
Context: Founded in 2016, Bohubrihi operates in the life-long learning and skills development vertical. The company offers a wide range of courses on a diverse set of skills and disciplines and has launched several interesting products including one called Career Tracks. The collaboration with MyGP app will help Bohubrihi access a new user base. More importantly, a collaboration with Grameenphone adds validation and credibility. For MyGP, it makes perfect sense and adds one more incentive for GP users to download MyGp app and stick around. As the telecom operator builds out the platform, it is only natural to expect that it would add more services to the platform.
3/ Praava Health Publishes a Message From its Founder and CEO Sylvana Q. Sinha
Healthcare Startup Praava Health published a message from its Founder and CEO Sylvana Q. Sinha on its verified Facebook page yesterday. This is the first time Praava put out an official message after DGSH ordered the healthcare startup to temporarily halt its operation over alleged "anomalies'' early this month. We reported the event before here. The message has so far received an overwhelmingly positive response from Praava Health customers on Facebook.
Find the full message below:
“A Personal Message from Praava Founder & CEO
To Our Valued Patients,
I founded Praava Health on the belief that all Bangladeshis deserve world-class quality healthcare services, grounded in dignity, care, and empathy. Driven by this belief and aspiration, we have served over 2,00,000 Patients in Bangladesh since our inception in 2017.
Praava has at all times focused on compliance with the guidelines and policy directives issued by the Directorate General of Health Services (DGHS) and international standards of clinical quality. Within its authority, DGHS decided to temporarily close Praava on August 2. Throughout, Praava proactively is complying with all guidance provided by DGHS.
We hope to resolve the situation as soon as possible so that we can resume serving you, our valued Patients, during the greatest public health crisis of our lifetimes.
We are rallied and genuinely touched by the Patients who have publicly expressed support of us on social media and have reached out to us through our call center and other channels in solidarity. As always, I would love to hear from you about any questions, feedback, or comments you may have. Feel free to write to me at [email protected]
It is our great honor and privilege to serve you. As we always say — at Praava, you are more than just a Patient, you are family. Please stay safe and well during these trying times.
Wishing you good health,
Sylvana Q. Sinha
Founder, Chair, & CEO