Md. Tanvir Rahman, Executive Director of Shipping & Logistics at Walton Group, on his personal journey, Walton’s ecommerce strategy and ambition, how Walton is building a hyperlocal ecommerce operation using its Walton Plaza across the country as distribution network, the challenges of e-commerce, the future digital payment, the business of ecommerce, and why taking challenge is the only path to personal growth.
Future Startup
Thank you for agreeing to do this interview. What is your background? Could you please tell us about your journey to what you are doing today?
Md. Tanvir Rahman
I was born and bred in Tangail and had my early education there. I did my graduation and post graduation in Accounting under the National University. I started my career with Walton in 2007 and have been here ever since.
From the beginning, I have been with the supply chain management team at Walton. I worked in China and a host of other countries as part of my job. Currently, I'm the Executive Director of shipping and logistics. Apart from that, I’ve also been working on revamping our eCommerce operation. We have a committee - a team - who are looking after the new developments of our eCommerce platform, and I coordinate this operation.
Walton has been in ecommerce for a long time. We first launched our ecommerce site in 2015. The initiative still there. What we are doing now is improving the platform and adding new features to our old eCommerce site to enhance the experience of our users. We’re expecting to launch our renewed ecommerce site with enhanced features and a better experience for our customers by mid-November.
Walton is one of largest electronic products manufacturers in Bangladesh. We have a vast nationwide distribution network. We have 303 Walton Plaza - our own retail outlet, across the country.
The ambition with the new eCommerce initiative is to take advantage of this vast network of the retail chain and give our customers an option to shop conveniently from anywhere while we deliver them the products from the shop nearest to their location. Our primary target is to connect this huge retail network that we already have to radically improve how our ecommerce operation works.
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The ambition with the new eCommerce initiative is to take advantage of this vast network of the retail chain and give our customers an option to shop conveniently from anywhere while we deliver them the products from the shop nearest to their location. Our primary target is to connect this huge retail network that we already have to radically improve how our ecommerce operation works.
Future Startup
You mean using your existing retail distribution shops for the eCommerce distribution?
Tanvir
Yes. One of our main products is refrigerator where our market share is more than 70%. Moreover, we have a host of strong brands in home appliances, television, air conditional, mobile phone, laptop and computer, and other electronics category. We are routinely investing in innovation and offering better products to our customers in every category. Hence, our product line is growing rapidly, and we continue to get a good response from our customers.
Now, we want to make the lives of our customers even easier. Our goal is to offer more convenience, better service to our customers by integrating technology into everything we do. Investing in improving our e-commerce operation is a part of that goal. We want to ensure that our customers could order any product from anywhere and get it delivered to their destination without enduring the hassle of moving through traffic and all that.
We are not only thinking about urban customers. We have a strong customer base who live in rural areas. If you go to any remote areas in the country, you would see that we are there. While we continue to serve our urban customers, we want to ensure that our customers living in rural areas also get the benefits of our technology adaptation. If we could bring the benefits of technology to these people, it would be a wonderful experience for them.
Future Startup
I have a few more questions related to your ecommerce operation. Before that could you please tell us about your work as the ED of shipping and logistics at Walton? What are the things you do on a daily basis and how do you approach your work?
Tanvir
Shipping and logistics work as a part of supply chain at Walton. Simply put, we are a part of a greater whole which is the entire supply chain. Manufacturing it is a complex business and the supply chain is a big part of it. Of that big part, shipping and logistics are one of the important components.
We have a team who look after the shipping and logistics. We are responsible for all types of logistics related work starting from shipping critical raw materials from different parts of the world to dealing with shipping within Bangladesh. To improve the efficiency of our overall supply chain, we look after the logistics and work hard to improve the overall efficiency of our supply chain. I lead the team here.
Future Startup
That gives us a broader perspective, what are the things you do on a daily basis?
Tanvir
Let me give try to give you an overview without being very lengthy. For instance, you need to bring raw material from Germany for making a product. If your factory is in Bangladesh, you need to ship it from Germany to Bangladesh. Our team manages this type of jobs. We find the best and most cost-efficient way to send the product from Germany to your desired destination. We have two goals: efficiency regarding time - bringing a raw material in the shortest possible time and cost efficiency, bringing something at the minimum cost.
It is often difficult to achieve cost and time efficiency at the same time. Still, we try to find a balance between the two.
Then there are security issues. You need to have proper insurance to ensure appropriate security for your product. So finding how we can bring a product cost and time efficiently in a secure manner so that we could give support to other processes is the main priority of our team. It looks pretty simple, but it is not.
To achieve this goal, we need to do a lot of other functional works, which would take time to explain. However, I think this gives an idea about what we do and the role we play in the overall business ecosystem.
We are not only thinking about urban customers. We have a strong customer base who live in rural areas. If you go to any remote areas in the country, you would see that we are there. While we continue to serve our urban customers, we want to ensure that our customers living in rural areas also get the benefits of our technology adaptation. If we could bring the benefits of technology to these people, it would be a wonderful experience for them.
Future Startup
Coming back to ecommerce, could you please tell us more about your eCommerce effort? How does it work? How big is your team there now?
Tanvir
There are many things related to eCommerce but what we are mostly doing is organizing our online sales. We have an offline sales network, we are working to connect that to our ecommerce so that we could offer better service and convenience to our customers.
There are about 2000 people involved in the entire process from different backgrounds, departments, and aspects. It is hard to specifically tell that we have a team of 'these many people' working on eCommerce because many things are interdepartmental. Unlike other companies, we do everything in-house starting from building our technology to call center to distribution network to logistics. Moreover, a lot of these things operate in an inter-departmental manner where eCommerce is part of other things. That's one of the reasons why I told you that more than 2000 people are involved in the process. It would be difficult to tell if you ask me who works in which part.
Future Startup
One of your priority is to connect your offline outlets to your ecommerce operation and use them as a distribution channel, basically to build a hyperlocal model. For instance, I'm from Cox's Bazar, I ordered something online and put an address, you would deliver the product from your nearest plaza, right? How does the integration part work?
Tanvir
We already have an infrastructure in place - all of our retail outlets are under online network channel. We have a software that connects it all. Every sales, even before ecommerce, has to go through this process. Now, come to eCommerce, eCommerce offers more convenience to our customers by enabling online shopping and home delivery. Logistics is a big part of it. To avail our eCommerce service, you have to go to our website or Facebook page. When you place an order, you get to select a mode of payment, a mode of delivery and then we serve you accordingly. We have integrated secure payment gateway, you can pay using any bank and instrument, and the payment is 100% secured.
We are also offering cash on delivery option for products below 5000 taka. Since most of our products expensive in nature, we could not offer Cash on delivery on those items, but we offer Cash on delivery for products below 5000. Cash on delivery was not there before, we are introducing now with our new version of ecommerce.
Future Startup
Most eCommerce companies are marketplaces and aggregators in nature where they allow all kinds of products to sell and buy. Do you plan to allow other merchants to sell using your platform or do you want to be exclusive for Walton products?
Tanvir
Initially, we are working with only our products. But I would not say that we have not thought about it because if you want to stay relevant in the market, you have to change many things.
What we started with in the early days, we are not anymore there. A lot has changed. Similarly, this is something that will change as we grow and move forward. If there is a demand for such a platform and if our management sees it as something viable then they may think about it. For now, we don't have any such plan.
Future Startup
You have been into e-commerce for a long time?
Tanvir
Yes. We have been, and we are for a long time. You could say we are going through a maintenance phase now.
Future Startup
How was the response in the past?
Tanvir
The developments that are taking place now is because we have received a fantastic response from our customers. We launched our ecommerce in 2015 through a big launch party. We received a massive response from the very beginning that continues these days. As I mentioned, that’s one of the reasons we are working on improving the experience and everything. We used to do north of 50 lakh taka transaction per month.
The iteration we are working on is going to significantly improve the experience of our customers. We would be able to serve our customers better. In e-commerce on-time delivery and excellent customer service are important, we aim to play there as well. For us, the product is not a challenge because our customers already love our product. They will now get the same product online without hassle.
We do not see it that way. Say for instance, when 500 customers come to a shop we need to invest in infrastructure and in people to manage it, but if the same people order online, we could save the cost.
Future Startup
What are significant changes in the new iteration of your eCommerce operation?
Tanvir
A lot of new improvements are coming. To name a few: in the past, there was no option to know whether a product is available in a particular location which caused a lot of friction around cancellation and all. Now we are adding that. Whenever someone places an order, she would get to see whether the product is available in her nearest outlet or not.
Delivery has been made smoother than before. We have put importance on delivery time - how quickly we could deliver while ensuring proper safety. We have taken care of security in every way possible. We have also added a host new features.
Future Startup
You are trying a hyperlocal model where your sales centers will become your distribution centers for eCommerce. However, do you see your eCommerce cannibalizing some of your center's existing sales attracting the same customers who used shop from your store to eCommerce?
Tanvir
We do not see it that way. Say for instance, when 500 customers come to a shop we need to invest in infrastructure and in people to manage it, but if the same people order online, we could save the cost. There are costs involved in maintaining a physical operation, and if our customers order online, it would allow us to save costs.
For customers, they would be able to shop hassle free and enjoy more convenience. For us, it would save cost and improve efficiency, and we would become more digital.
The access to technology for many people outside of major cities is a challenge. Although we see an excellent internet and technology penetration in Dhaka and other major cities, this is not the case in many other parts of the country, particularly in the rural and suburban areas. It is a massive challenge for us.
Future Startup
Do you have a dedicated team for managing your eCommerce in all of your outlets?
Tanvir
We have a small team of 3-4 people in each of the stores who are responsible for managing the eCommerce orders for now.
Future Startup
How about payment? What percentage of your customers pay digitally?
Tanvir
100% of our transaction was digital before. We did not have any cash on delivery option. We are introducing cash on delivery with this iteration because we have found that a significant percentage of eCommerce transaction in Bangladesh take place through Cash on delivery.
It is a challenge for eCommerce because you are doing everything digitally, but you are paying in cash. Since there is a trend in the market, we have kept an option for our customers to avail it.
Future Startup
What are the challenges you see for eCommerce?
Tanvir
The access to technology for many people outside of major cities is a challenge. Although we see an excellent internet and technology penetration in Dhaka and other major cities, this is not the case in many other parts of the country, particularly in the rural and suburban areas. It is a massive challenge for us.
We have seen that eCommerce has become a part of our discussion in the past two years because internet penetration has grown. However, still, there are challenges related to this. A lot of positive developments have taken place such as the mobile phone price has gone down, internet penetration has grown and so on. If this trend continues, then the future is bright for eCommerce. But it is a challenge for now.
The second challenge would be ensuring excellent after sales service for our customers. Ensuring on-time delivery, which is a challenge in Dhaka due to traffic, and making sure that your customer gets the best possible service remains a challenge.
Digital payment is still expensive. There are extra charges - different company charges differently - which discourage customers. I think that if we want to encourage digital payment, this charge must come down significantly. If you look at other markets, this charge is very insignificant.
Future Startup
Your products are also available on other eCommerce platforms, what are the plans there?
Tanvir
When you are running a massive operation like Walton, you have to think differently. So it is hard to tell that we would not do that or this. Selling our products through other eCommerce sites is a distribution and sales decision for us, and responsible departments make that decision. It is not a part of ecommerce operation, our corporate sales team deals with that part.
Future Startup
You mentioned security is a challenge in digital payment, there is a lack of trust. What are the other difficulties in digital payment?
Tanvir
Digital payment is still expensive. There are extra charges - different company charges differently - which discourage customers. It is simple if I need to pay two taka additional charge for a 100 taka product, it is bearable but it is a challenge when you are buying a high-value product like a refrigerator, a 2% or 3% extra charge is huge. It is a challenge. I think that if we want to encourage digital payment, this charge must come down significantly. If you look at other markets, this charge is very insignificant.
If you want to grow personally and professionally, you have to take challenges that are beyond your current capacity, that will require you to stretch yourself. I take every challenge as an opportunity to learn. Whenever I was given a challenge, I learned something new.
Future Startup
What are a few goals for 2019?
Tanvir
We are not incorporating all Walton Plaza in the beginning. We are launching in Dhaka, Chittagong, Gazipur, Narayanganj, and Savar first. These are the areas we are going to cover initially. Our goal is to bring all our plazas under the ecommerce network by next year.
Of course, we want to grow our online business. We are also working on integrating service to our digital platform as well. It is not about products only; you could get the service online as well.
Future Startup
What are the biggest lessons you have learned from your journey so far?
Tanvir
If you want to grow personally and professionally, you have to take challenges that are beyond your current capacity, that will require you to stretch yourself. I take every challenge as an opportunity to learn. Whenever I was given a challenge, I learned something new.
Without challenge, there is not much to learn. I have always strived to learn. I have taken new challenges throughout my small career, I stumbled and failed many times, but I also learned from those failures.
I think it is important that you push yourself outside of your comfort zone. And that’s where growth is.
We are not incorporating all Walton Plaza in the beginning. We are launching in Dhaka, Chittagong, Gazipur, Narayanganj, and Savar first. These are the areas we are going to cover initially. Our goal is to bring all our plazas under the ecommerce network by next year.
