When we think about the Bangladeshi economy, we invariably think of RMG and remittance as key drivers of its impressive growth.
In contrast, despite its important role, the retail industry flies under the radar. Worth around $200 billion in annualized revenue, it can easily be described as the heart of the economy, accounting for more than 60% of total GDP.
When the global pandemic threatened to halt Bangladesh’s growth - RMGs facing bulk cancellation of orders, for example - the retail industry emerged as the unlikely savior.
Unlikely, because, despite its economic importance, the sphere of retail commerce has stayed the same for over two decades.
What has changed, however, and somewhat dramatically over the last one-and-a-half years, is the rapid adoption of digital services which have revolutionized and rejuvenated this largely old-fashioned sector.
A very good example of this is ShopUp Bangladesh’s largest full stack B2B commerce platform.
With technology-led products like Mokam, REDX, and Baki, ShopUp has helped sellers overcome the limitations of traditional supply chain, logistics, and financing in ways we could not have imagined before.
This change is reflected in thousands of people across the country.
Take, for example, Emdad Mia who, at the beginning of the lockdown last year, lost his job as a salesman at a private company.
The company he worked for, like most businesses across the country, was reeling from the devastating effects of a global pandemic, downsizing to cope with the slowdown in economic activity.
But Emdad Mia, the sole earner for a family of five, was burning through what little had saved, and burning through it fast.
With nowhere else to go, his wife sold her gold jewelry to provide him with the capital - around Tk75,000 - to start a business.
Despite lacking any prior experience, Emdad Mia decided to open a small grocery store in his own neighborhood.
As expected, he struggled, facing numerous challenges - not knowing where to source products from, not receiving the best deals from suppliers, not having sufficient cash to buy more supplies, etc.
The old-fashioned nature of the industry meant that small traders like Emdad Mia suffer from the inherent inefficiencies of the traditional supply chain and related logistics.
So much money is spent on simply transferring goods from the producer to the end consumer that traders ultimately end up with precious little on their plates.
Enter ShopUp
ShopUp’s first subsidiary, Mokam - a B2B commerce platform from ShopUp - promises to solve these issues, not only for Emdad Mia, but for the entire 4.5M retailer base spread out across Bangladesh, facing similar business challenges every day.
Mokam simplifies the sourcing process by making 10,000+ products available in a simple smartphone app.
Often sourcing products directly from producers, Mokam cuts down on extra layers, using a common delivery channel for all products, significantly bringing down costs and transferring more of the value to traders instead.
This is made possible by REDX - the logistics platform from ShopUp - and undoubtedly the market leader in making doorstep deliveries nationwide.
The complementary nature of the services enables ShopUp to scale both Mokam and REDX in tandem, creating a flywheel model, encompassing a massive retailer base across the country.
As a result, such traders can now fully focus on their core task of selling, with Mokam ensuring quality supply at a great price.
Traders can also benefit from Baki - ShopUp’s digitally embedded credit offering.
To put it simply, Baki bypasses the complexities of traditional financing and offers products on credit, providing an easy way for sellers to increase their basket size without needing additional capital.
These solutions have helped people like Emdad Mia recoup their initial investments and expand their businesses in a matter of months.
In this manner, ShopUp’s approach, serving all three sides of the iron triangle of commerce, shows great efficacy.
Leveraging the swift adoption of tech-based solutions due to the countrywide lockdown, the organization has modernized a decades-old sector and, ultimately, galvanized the very heart of the Bangladeshi economy.
With retail emerging as a secret weapon for Bangladesh, ShopUp has been the ammunition the sector so desperately needed - showing the right signs to potentially become a billion-dollar startup, the first Bangladeshi unicorn.
Currently serving over half a million sellers, ShopUp is showing tremendous growth momentum, having grown to 15 times its initial size (or worth) over the past year alone - it has already achieved the business scale of a mid-sized FMCG.
With $22.5 million in Series A investments, ShopUp is the most well-funded startup in Bangladesh, backed by some of the biggest and most renowned VC firms in the world, including Omidyar, Sequoia Capital, and Gates Foundation, among a host of others.
These are exciting times for the Bangladeshi economy no doubt and what ShopUp has achieved so far is only the tip of the iceberg.
The nation is set to reap the benefits of other such startups which have done a tremendous job of increasing FDI, transforming local markets through the utilization of innovative tech-first solutions.
Asif K Rahman is a business analyst, teacher, and writer.
