Chaldal (YC S15) Wants to Become the Amazon Fresh of Bangladesh’s Capital(techcrunch.com)
techcrunch.com
Chaldal (YC S15) Wants to Become the Amazon Fresh of Bangladesh’s Capital
http://techcrunch.com/2015/07/30/chaldal/
29 comments
Hi all, I am one of the founders of Chaldal. Happy to answer any questions here -- about Bangladesh or Chaldal. :)
This sound pretty well done (I'm in Australia, so I can't use your service, but Instacart and the like aren't here either). Do you have any plans to make available some sort of API for making orders/deliveries etc?
We will have to think about it. We didn't have it in mind to begin with -- but may be worth trying.
Sounds like Instacart. How's this different?
Our prices are cheaper than brick and mortar stores in the country. The supply chain is super fragmented and no one has the scale to bring costs down significantly. Think instacart without Safeway/Wholefoods.
We have our own warehouses. Our workers are full time.
We have our own warehouses. Our workers are full time.
What's the hottest Bengali song right now or recently?
Way out of my expertise. But this went viral a few years ago: https://www.youtube.com/watch?v=blXydyJLkYY
I just found this today: https://www.youtube.com/watch?v=wV1ZAcUGlv0
Another Bangladeshi here. Keep up the good work :).
Thanks so much. Please ask your family/friends to try us out.
Any plans to launch in India? Can I help?
No plans in India for now as the market feels super competitive. We have a big enough market at hand and would like to have a clear lead before we expand internationally. We're looking for full-stack engineers. Please email me waseem@<domain>
bangladeshi here, really good see a bd startup in YC, we need more people like you.
I think your model is really cool and seems like it would work better for the Bangladesh context than the US context (as a comparison to Instacart). Do you think Chaldal will have a net positive impact on society? How do you envision things may change in Bangladesh if/as your model dominates urban grocery retail?
Thank you!
Actually we believe this can work in all contexts. The immediate value add for the customer is lower prices, better quality, more convenience.
We have also seen a lot of inefficiencies in getting food from farm to consumption. One example is wastage - the more data we have on consumption, the better we can predict wastage, and the better we can redistribute food. So yes, we are hopeful that this will have a net positive impact on society.
Actually we believe this can work in all contexts. The immediate value add for the customer is lower prices, better quality, more convenience.
We have also seen a lot of inefficiencies in getting food from farm to consumption. One example is wastage - the more data we have on consumption, the better we can predict wastage, and the better we can redistribute food. So yes, we are hopeful that this will have a net positive impact on society.
Thanks. It might work in the US context someday it is way to early to even start thinking in that direction. Our only data point is that Walmart started in Arkansas, one of the poorest states in the US. So things that we find in Bangladesh may become applicable at a global scale.
I hate to be that guy, but...
* Given the traffic in Dhaka, you'll forgive me for not believing your one hour delivery promise.
* The only way I can see to get around the traffic problem is to either go hyper-local (i.e. maintain warehouses in every neighborhood), or have delivery people walk/take rickshaws. Either way, this isn't going to scale to the entire city without a TON of startup capital. Which I'm not sure you have.
* How does YC feel about the inevitable "system loss" that's comes with doing business in Bangladesh?
I'm also very interested to hear how YC intends to maintain management accountability in a business halfway around the world.
* Given the traffic in Dhaka, you'll forgive me for not believing your one hour delivery promise.
* The only way I can see to get around the traffic problem is to either go hyper-local (i.e. maintain warehouses in every neighborhood), or have delivery people walk/take rickshaws. Either way, this isn't going to scale to the entire city without a TON of startup capital. Which I'm not sure you have.
* How does YC feel about the inevitable "system loss" that's comes with doing business in Bangladesh?
I'm also very interested to hear how YC intends to maintain management accountability in a business halfway around the world.
Thanks, these are very good points. Below are our thoughts:
* We will be maintaining warehouses in every single area. We currently have 2 but plan to have 9 to cover the entire city. That is the only way to ensure 1 hr delivery. We are also offering this service for products which are fast moving (around 1500 SKUS). Slower moving products are sent from the main warehouse.
* We will need a bit of capital, but not as much as most people think, it costs us around $230k to start a warehouse and run it for six months. It is a lot cheaper than starting a departmental store in Dhaka, and you get far more efficiency per sq. ft as you are not optimizing for a "browse experience" for shoppers. Our shoppers are our employees and we can control their movement for maximum output/sq. ft. Theory is departmental stores can survive, so can 7000 sq. ft. warehouses.
* I don't see why accountability and management challenges should be any different in BD than it is in the US. Enough startups have thrived in India and China.
* Bangladesh also has a decent history of foreign investments with companies like Telenor and Microsoft managing local offices. So corporate accountability does exist in the country.
* We will be maintaining warehouses in every single area. We currently have 2 but plan to have 9 to cover the entire city. That is the only way to ensure 1 hr delivery. We are also offering this service for products which are fast moving (around 1500 SKUS). Slower moving products are sent from the main warehouse.
* We will need a bit of capital, but not as much as most people think, it costs us around $230k to start a warehouse and run it for six months. It is a lot cheaper than starting a departmental store in Dhaka, and you get far more efficiency per sq. ft as you are not optimizing for a "browse experience" for shoppers. Our shoppers are our employees and we can control their movement for maximum output/sq. ft. Theory is departmental stores can survive, so can 7000 sq. ft. warehouses.
* I don't see why accountability and management challenges should be any different in BD than it is in the US. Enough startups have thrived in India and China.
* Bangladesh also has a decent history of foreign investments with companies like Telenor and Microsoft managing local offices. So corporate accountability does exist in the country.
I'm familiar with the Instacart model in the US, where they do shopping and delivery but do not have any warehouses. Did you consider this model? Why did you decide to own the warehouses as well?
Few reasons:
1. Inventory management is very poor in the retail stores around Dhaka. Most (95%) of them are very small (carrying ~500 SKUs), and even the larger ones have difficulty in ensuring supply of all products. We found that people would get annoyed if we couldn't send them all the products they asked for (98% fulfillment rate was not good enough).
2. The prices don't work if you are a layer on top of the existing infrastructure. People are a lot more price sensitive -- in fact, irrationally so. They care about getting a "bargain" rather than the mathematical value of the bargain. SO we couldn't survive by taking a mark up on products like instacart.
3. Part-time work is non existent and we couldn't trust the quality of the workforce in an on demand model. We have to train people to understand the difference between mayonnaise and mustard.
4. Some Indian startups have gotten around the idea of on-demand workforce by just hiring all their deliverymen full-time. Their unit economics should be pretty tough.
5. The warehouses are optimized for picking and dispatch. Real Estate prices are expensive. We should be seeing much better revenue per square feet than regular grocery stores.
1. Inventory management is very poor in the retail stores around Dhaka. Most (95%) of them are very small (carrying ~500 SKUs), and even the larger ones have difficulty in ensuring supply of all products. We found that people would get annoyed if we couldn't send them all the products they asked for (98% fulfillment rate was not good enough).
2. The prices don't work if you are a layer on top of the existing infrastructure. People are a lot more price sensitive -- in fact, irrationally so. They care about getting a "bargain" rather than the mathematical value of the bargain. SO we couldn't survive by taking a mark up on products like instacart.
3. Part-time work is non existent and we couldn't trust the quality of the workforce in an on demand model. We have to train people to understand the difference between mayonnaise and mustard.
4. Some Indian startups have gotten around the idea of on-demand workforce by just hiring all their deliverymen full-time. Their unit economics should be pretty tough.
5. The warehouses are optimized for picking and dispatch. Real Estate prices are expensive. We should be seeing much better revenue per square feet than regular grocery stores.
How do you deal with the political volatility? I'm pretty sure Amazon doesn't have to think too much about Hartal or their delivery trucks being burned.
We will have to price it in as a systematic risk. Our competitors in the local market face the same risks, and when Amazon does come in they will have to face it too. For now we are focused on competing locally. Things have not been all that bad for us in Dhaka -- we actually deliver a lot faster on hartal days.
And insurance works just fine in Bangladesh once you figure out the claims process.
And insurance works just fine in Bangladesh once you figure out the claims process.
Do you deliver in your trucks on Hartal days? It would certainly be awesome if they didn't attack your trucks because you're simply taking food & essentials to people.
+1, hopefully we can make that happen.