Maliha Quadir, a Bangladeshi -American, is a technology entrepreneur. Her start up Shohoz.com has done breakthrough work in digitizing the disorganized and male-dominated transportation industry in Bangladesh. Before Shohoz.com, she was based in Singapore as Director of Vistaprint’s digital business in global emerging markets. Prior to this, she worked for Nokia in strategy and business development for an emerging market focused digital content service called Nokia Life Tools, covering India, Indonesia, Bangladesh, China and Nigeria. Maliha also founded an online portal in Bangladesh while working for an ISP called bracNet. In the early part of her career, Maliha worked in Investment Banking, in Utilities Mergers and Acquisition department of Morgan Stanley in New York and San Fran and also in Debt Capital Markets of Standard Chartered Bank in Singapore. She holds an MBA from Harvard Business School and a BA in Computer Science and Economics from Smith College. Mother of two, she lives in Bangladesh
In the last two years or so, Sohoz has been able to install a ubiquitous presence in Dhaka. You would see their green-black spiraling logo on the back of car, on a battery of motorbike riders T-shirt and in helmets and strangely on small signboards hung on the gates of buildings and apartments saying “Don’t park here.”
Maliha Qadir, a Harvard educated entrepreneur is behind this success of Sohoz. Fintech team has recently interviewed her and learned about the aspiration of creating a brand name whole mantra is “Jibonta ke sohoz korun” (Make your life easy).
Here is an excerpt of that interview for our readers.
Sohoz was first launched as a platform for purchasing tickets of transport lines. In the last couple of years, it has expended its identity into multiple verticals including ride-sharing and food delivery business? What were the reasons behind this jump?
Frankly, we didn’t suddenly take this jump. I believe in more work and less talk, and considering how much we work, we do not promote ourselves to that extent. On the contrary, we have seen our competitors behave in a manner where they seemingly finish a project in hurried manner and then advertise that they have done so many, which is a PR strategy to create hype.
Shohoz is not Shohoz ticket or Shohoz bus; Shohoz can never be name for a ticketing company because it is a very broad name. The brand name is Shohoz because the core concept was making life easy for the masses. It was our internal decision to start off with ticketing, a mass-level product which can be adopted early by the people. Afterwards, we would move into the ride-sharing business which was in our plans in 2013-14, I never talked about it. Generally Shohoz doesn’t talk about the product until it has been launched. We just didn’t brag about it like others.
We basically wanted to introduce the concept of a Super App—an app that cater your multiple needs in daily life. Shohoz’s goal has always been to become the largest destination for online in Bangladesh. This is a very big concept. If I refer back to my previous interview with your magazine, I mentioned that we are engaged in ticketing but other services will be launched soon. But we didn’t want to boast about what we are going to do. Our philosophy has always been stable growth and building up a sustainable company, creating a lot of hype and hoopla about what we can achieve is just not our style.
What prompted you to go for designing and building a super-app?
So what has changed is that we used to follow the web-first strategy earlier but now we have realized that the world is moving towards mobile-first especially in the emerging markets like ours. That is the origin of the Super App concept. The Super App terminology has been in vogue for the last two years and it is used by apps like Grab, Gocheck and others. The Super App basically brings together multiple services under a single application.
The goal of Shohoz has always been to offer services to the masses, ticketing cannot be the only service for the mass-level, there are lots of services to make your life easier. Ride-sharing was in our agenda and I met BRTA long before any of the ride-sharing companies came into the scene. I met the BRTA chairman two to three times and showed him that we want to introduce the ride-sharing. At that time they told us that such services cannot be introduced in Bangladesh according to their current understanding of the market. Doing anything illegal is just not in my mindset and I didn’t want to push the envelope on introducing the ride-sharing service.
In November 2017, we heard that the ride-sharing rules and regulations will be introduced in the parliament; in fact we had a half-bid on the app in 2016. The amusing thing is that we had an intern from Middlebury College in America; my husband has a foundation in that college that sponsors interns and a girl called Elena came as an intern through that foundation. She worked on our ride-sharing service which was similar to Gocheck and she contributed in preparing the business case and all the financials for that project. I took her along with me to BRTA and then we had the half-bid but we didn’t proceed any further due to legal issues, which was a mistake in hindsight because there was nothing wrong in it.
We picked up the work later on and thought about going for an on-demand truck or on-demand motorcycles, and since motorcycle sharing was not legal then we started working with truck. When we heard in November 2017 that the ride-sharing service will become legal, we went for on-demand motorcycle as it was my desire for a long time. Then we launched the service in January, 2018.
We actually work very quickly. We placed the app on our website on a preliminary basis on January 6. By March, last year the technical aspects became stabilized and a better version of the app came through. So you can say we are working from March and it has been one year with the ride-sharing service.
After ride-sharing, we moved into the vertical of food delivery business. We ventured that as we wanted to cater the everyday need of people through our app. We have launched our food delivery service two months ago. I didn’t expect the food delivery operation to flourish so soon and I must admit that this operation is very complicated and it was a good job done by my team.
Do you have contracts with restaurants for your food delivery service?
We do not have contracts with some restaurants and especially the road-side restaurants do not want to The food delivery service is meant for the mass level just like ticketing. I never wanted to do business with the rich people only. There is appreciable demand for the food service but I think it will take some time to flourish as mass level people are not online savvy yet.
We have around 1500 restaurants with us now and this number will double in a few months time. In Chittagong we will launch the service within two weeks. The idea is to offer selection but also quality delivery. We have seen other brands in the market focusing on one or the other. We are trying to offer both and we think it is possible.
We have an office for food delivery. Our delivery-men are properly dressed and they maintain hygiene. They come to the office everyday to collect their uniform, shoes and the delivery bag. The delivery bag is properly insulated so the food stays warm. We want to ensure the food reaches the customer in the best possible condition. We think in the food delivery service, issues like who delivers the food, the condition of the delivery bag and if the food was in good condition matters a lot. Our delivery time is 30 minutes which is the world standard.
Any new area to explore?
We will launch the truck service in the near future. The trucking market is absolutely new and it will take a lot of time as it is quite difficult.
Are the logistics for the trucking service very different?
Yes, the logistics are different and it is quite complex. We have to work with people who are not accustomed with internet and there are other challenges. But we have managed to overcome similar challenges for the bus ticketing service. Selling bus tickets online is a small part of the operational deal. The main work effort wise is digitizing the bus operators. The bus operators sell tickets at their counters where you have the hand-to-hand transaction. We have installed our software at those counters and the software is very complex.
You see the bus operators have different types of demands although from outside one may think it is all the same because they all sell tickets. We have been working with 70 bus operators for the last five years and they had asked for many customizations over time. We provide them with the customizations and eventually their ticket sales have increased. The main challenge is that those who sell tickets at the counter, they had never seen a computer in their lives before we entered the market.
We give them training to operate the computer, even teach them how to hold a mouse. Before there were instances when we used to get a call from the counter that the software is not working and they were reluctant to use the software. Now the situation has changed as they know how to use the software. We also gave the hardware to the bus counters and if anything is broken, we repair it. Few of them see us as the hardware vendor but we keep on saying that we are not that! The repairing service is not limited to Dhaka; we go to places like Barishal, Khagrachari and all over the country. So from that experience we feel very confident that we can run the trucking service quite well. Two years ago I spent a lot of time along with my team members at the truck stand at Tejgaon and tried to understand the problems and apprehensions of the truck owners. I know the trucking service will be as difficult as bus ticketing but Bangladesh has made a lot of progress in the last four years. In that sense the digitization of the truckers may be a bit easier but it is still very difficult.
Let’s talk a bit about your funding. There was this news where you had raised 15 million dollars and then another one mentioned an undisclosed amount. Do you have any plans to acquire funds in the future?
We will start fund raising soon; actually it takes a lot of time. If you notice in ride-sharing, the extent to which all the brands are giving discounts, for example we are taking 15 percent commission but giving away 70 percent discount; the ride-sharing game is like this. Uber is not profitable worldwide as well as many other ride-sharing companies. You have to provide a lot of discount and subsidies.
How long do you think it will take for you to become profitable following this business model?
You see, Uber is yet to see profit after 10 years in operation. So it depends on competition, it is very difficult to say how long it will take for us to become profitable. It all depends on market dynamics.
Shohoz waited for a long time before the ride-sharing service became legal and then you entered the market. Pathao, your main competitor in bike and the other brands have already occupies a big chunk of the market. In terms of branding, when you think of car, Uber is the name that first comes to mind and for bike it is Pathao. How does Shohoz fit in this scheme of things?
The perception was the result of branding, for the car Uber is really ahead. For bike, Pathao’s position is mainly due to branding and word-of-mouth than reality because market share wise we are at par with them. Like I mentioned earlier, we believe in more work and less talk but now I think we need to speak more.
All the motorcycle riders have the license from BRTA. They will not be able to ride without the license. Do you do any form of screening for the service these riders provide? From my personal experience I have seen many riders especially from Pathao who ride their motorcycles very aggressively and increase the risk of an accident.
In our context we have some screening, we are careful because that is the overall proposition of Shohoz. Here you have to understand that during our screening, we can see the license given by BRTA which means the person can ride a bike. We also take into account the age of the license. We talk to the rider and there are some criteria they need to fulfill. One thing you need to understand about driving aggressively is that during testing the person will ride slowly in front of me but out in the street he starts riding aggressively. How can we stop this?
Once we receive a complaint, we take action. Here lies the limitation of the ride-sharing model as the riders are not my paid employees, they are like freelancers, they can ride when they feel like and they have that freedom. The person will ride carefully in front of me and pass the test but how he will ride in the streets is really up to the traffic police. The traffic police should stop them.
Besides, you have to understand that the motorbike riders are micro entrepreneurs. They are not employees but micro entrepreneurs. Even you can be a rider; there are many boys in my office who are riders, so this is ride-sharing. The rider is like a businessman, he can do whatever he wants.
Words like ‘angel investor’ and ‘startup’ were not popular in Bangladesh even two years ago. People are becoming aware of these terms. Do you think an ecosystem has developed in Bangladesh especially for tech startups? Do you think people here are aware of angel investor or venture capital for funding?
It has just begun and some good work has been done by Startup Dhaka, they started an angel firm. There are some incubators and Grameenphone is also involved with it. The ecosystem has just started to take shape and it is interesting, I have been working for the last five years in Bangladesh. Five years ago there was absolutely nothing. That situation changed in the last two years where many people are coming up with startups. Good startups are in the pipeline and it is very encouraging, they are all in the early stage. They are very promising and I like the fact that a lot of work is happening but acquiring funds still remain a big struggle for Bangladeshi companies.
What are the obstacles in acquiring funds for these startup companies?
The reason is Bangladesh. Recently I read an article in New York Times that identified Bangladesh as a poor country. Foreigners think Bangladesh is still a very poor country. We have done so well in recent times; our GDP is 1900 dollars per capita. But due to that legacy perception, or you can say the branding, we have to be more careful about branding Bangladesh. The startup companies can be used for branding Bangladesh in a positive light. Journalists have a role to play here so we get the visibility and the world will get to know about the good things happening in Bangladesh. During the five years of Shohoz, we have been modest and that is not necessarily a good thing but looking at the numbers I was pleasantly surprised. We have completed 65 million transactions from bus ticketing, ride-sharing and food delivery. We have 15 million unique users. In ride-sharing we are getting 150,000 users per month. That is a lot already! Now we have 250 employees at Shohoz and another 100 will be employed in the next three months especially in tech and for trucking.
What is the next plan for Shohoz?
Generally speaking, Shohoz wants to be the largest destination online, we want to offer the daily necessities of people. That is the bigger vision. I want to achieve that in the next 10 years. Now we are in transportation, that is ride-sharing, in logistics we have food and trucking will be launched soon. And then we have some inspirations to get into fintech, I do not want to share the details with right now. All I can say is that fintech is a very vast market and we want to enter it soon. In general startups have to be very nimble to change things as they move. Our purpose is to provide all the daily necessities of people.
Shohoz has always been funded by international investors; we never made any funding announcement because you will be in trouble if you boast here in Bangladesh. From our inception we had foreign angel investors and they are very well respected angels. Founders of SAP Hybris are my long-term backers and they have already invested three to four times as angels in Shohoz. Chief Digital Officer of Prudential is our investor. CTO of Flipkart has joined our board. Shohoz has raised funds five times since it began operating through its foreign investors. There are many VCs involved with us. So we have always been funded by people who understand technology and building a strong technology platform is a big endeavour for us.