When Sindabad was launched, Bangladesh already had a couple of e-commerce sites. Some of these consumer sites were growing in popularity and doing brisk business.
So, to explore a new avenue in the budding digital business space where the Business to Customer (B2C) model is the usual route, the startup leapt a step ahead.
Sindabad became the country's first Business to Business (B2B) e-commerce site in June, 2016, that provided businesses with office essentials such as machineries, chemicals, pantry items, stationary and office supplies etc.
Sindabad's journey at the beginning - given that it was a novel idea - was predictable. It progressed slowly - the startup attracted a couple of hundreds of customers in the corporate sector and a few thousands among the SMEs.
And then the coronavirus pandemic hit. The startup suffered a tremendous shock and business dried up.
Since most of their clients were corporations and the whole country went into lockdown, the startup started looking for a way to survive.
At that hour of initial shock, "we witnessed that businesses came down to a third of what it had been before the pandemic," said Asif Zahir, the managing director of Sindabad.
Before things completely spiraled out of control the startup, however, found something which would allow it to hang by the thread.
At that fateful hour, "we found a new door opening for Sindabad. The corporations began to order PPE products in bulk. And we had a strong source and supply chain," said Asif Zahir.
Sindabad was back in business. Stronger than ever before.
A magic boom
What began with PPE sales didn't end there – they found out that thousands of grocery outlets were running out of basic commodities as the traditional distribution system got disrupted.
So they began to sell basic commodities like rice, wheat, flours, sugar etc to grocery outlets.
Consequently, they found their "sales had doubled in December 2020 than what it was in January 2020, thanks to the reopening of offices, and the new surge in business for the SMEs" said Asif.
Before the pandemic, Sindabad had around 400 corporate and around 5,000 SME customers. Now, they have 500 corporate and 15,000 SME customers.
"Our customer numbers surged in the SME sector, which is the most exciting part," said Asif Zahir.
Why SMEs turned to Sindabad
Since it's a B2B startup, Sindabad was selling products like machineries, chemicals, pantry items, stationary and office supplies etc which you wouldn't get on customer sites.
"Prior to the pandemic, our roughly 400 corporate customers included some banks and financial institutions, RMG companies, multinational companies etc," said the managing director.
The focus was more on the corporate sector than SMEs like grocery outlets, small offices and restaurants etc.
The pandemic, however, shifted Sindabad's focus more to SMEs as thousands of SMEs were in need of an efficient procurement and supply chain mechanism.
"The bigger companies have larger teams for procurement. But maintaining such teams is a huge challenge for these small offices, restaurants and the roadside grocery stores," said Asif.
The managing director explains five challenges the SMEs faced where Sindabad came up with solutions, thus attracting more customers and doubling their business size:
Pricing: At least once every two weeks, the SMEs are in need of procuring a myriad of items. Since they are not buying a lot, their first challenge is the price. They are often deprived of the advantage of bulk prices.
Transparency: The MD continues to explain that "when you assign others to purchase items for you, you are often not sure of the transparency of product prices, as there is an issue of false quotations."
Hassle: Grocery outlets are often run as a one-man army. Businessmen have to purchase the products themselves, and have to keep their shops during that time.
Logistics: Delivery is another logistical issue where the SMEs face trouble; and finally:
Credit: For small and medium businesses, and even big businesses, credit is an issue.
Sindabad is providing solutions to all these challenges. With their website clearly mentioning the prices, transparency is ensured and customers do not face unfair pricing. Also, delivery is free of cost and they have credit facilities. Asif said they already have a contract with Brac Bank and the IDLC; and both these institutions are interested in SME lending.
A journey fueled by the pandemic
When Sindabad's journey began, it was a novel idea. At present this is the largest B2B e-commerce venture in Bangladesh.
"When we began, e-commerce was just taking off in Bangladesh. Some B2C sites were there already. Since ecommerce sites were growing popular, we thought - why not B2B?"
"For example, we have factories and we buy a lot of stuff. There are a lot of issues in our supply chain. B2C ecommerce alone cannot solve all these supply chains and procurement-related problems for larger business groups," Asif added.
Sindabad was initially started by Ananta Group and later attracted $2.5m investment from Brummer Frontier Fund in 2018 and $4.15m from Aavishkaar Venture Capital in 2019.
It is currently operating in greater Dhaka and Cumilla. Over the next two years, it wants to expand its business all over the country.
"But what about the post pandemic period? Would the surge in sales continue if customers go back to source products from older sources?"
"The growth we witnessed will sustain because the pandemic taught us to be more digital. Now many of our targeted customers, who used to stick to traditional methods in the past, are switching to e-commerce. Since e-commerce is more convenient, once they have the experience and habit of ordering things online, they will keep doing so."
Asif Zahir, a Harvard MBA and Stanford computer science graduate, is a firm believer in the prospect of digitalisation.
"E-commerce is more efficient. It is a better way. All it needed was more customers adapting to it. Thanks to the pandemic, customer adaptation that would take five years has been achieved in one year."