Two months ago, Jehanzeb Chaudhri of LaborForce.pk launched a localized Foodem.com replica called Mandi Express. Last week, he launched a Farm Direct category, signed on multiple vendors & cut out numerous middlemen. We met the potential disruption agents.
What are the future implications of the technology you are developing? Have you considered that it could have negative consequences for some people? How would you deal with that?
eCommerce has only just gained traction in Pakistan. What Alibaba did for manufacturers is what we are trying to do for Farmers. Allow the farmer to sell their produce directly. Except the perishable nature of food items, along with the complex distribution networks and agriculture-mafias make it a very hard path to tread. This is where SMS comes in. From the very start we have been working on ways to interface SMS with the Web. We are utilizing that currently but its in a very nascent stage. The technology we are using will become even more crucial as we grow and scale.
Yes, many agents may lose out on a little bit due to us. But the online market is still quite immature. Only about 17% of Pakistan is online or use the internet. So these guys dont have much to worry about just yet. We are catering to a niche market that consists of young to middle aged women, particularly professional working women who do not have time to do groceries. We wish that men like myself who do not really know much about how to pick high quality food are also encouraged to use the website as the tedious process of selection is done by experts who know what they are doing.
Who is your biggest competitor and how are you beating them?
There are two real competitors – RashenLelo and AaramShop. Both of them have very different business models. They are more about replacing the experience of going to a super market and providing everything from bathroom cleaners to dalda cooking oil. We are focusing on food items of a premium nature as well as specialty items from villages and small farms. In May we are getting 4 different types of grapes and 4 different types of Peaches from a farm in Attock. These would otherwise get exported or by consumed by hotels. We will offer them for the general public. Similarly we are getting wild honey from a deaf man in a village in interior Sindh – its the best honey to have with milk that I have ever had. We wish to expose Pakistan to the abundance and quality that exists right here in Pakistan.
Which conversion metrics do you use to measure success?
Currently we do not have a lot of orders coming in every day as we are very new so obviously conversion ratio is very low. We have been more interested in observing the CPC for different ad campaigns. For example the CPC for our Farm Direct campaign was $0.02 which is excellent. So people are really excited about this concept. Pakistanis love a bargain.
What was your first (code/product) ship like – and what was the same or different compared to your most recent?
The first code/product was Laborforce.pk and I think that MandiExpress.pk is actually a subset of that. We are using the same basic principles but expanding our technology and specializing in niche markets. The principles are simple.
a. Put people, services, products online: This does many things. It creates visibility of otherwise unknown resources. It starts a community based feedback reaction though ratings, reviews and recommendations. It creates linkages between people, services and products.
b. Win, win, win. Profit maximization has inherent flaws – its based on self interest! For example with our Farm Direct concept we give the farmer 20% higher prices than what they would get at the Mandi. This makes them want to sell their produce to us and they go the extra mile not to cheat us. Similarly when selling these products we reduce the price by 20% giving our product a huge price edge over competing products.
c. Use of technology to streamline processes. Our team consists of data scientists and experts in artificial intelligence. We love using technology to make life easier and in many cases do things that could not be done without it. We are being incubated by the Microsoft Innovation Center, which has given us wings – literally as we have access to all of Microsoft’s software and cloud services which not only speeds up the online experience of our viewers but allows us to do very advanced number crunching or analytics to improve our service.
What are you truly passionate about?
I have two passions in life: Technology and Farming. Farming is actually harder and more complex than creating a computer system. Apart from MandiExpress I am personally working on an automatic irrigation system that is linked to the cloud along with image processing technology that can detect changes in the environment allowing for remote monitoring and maintenance of a farm. I think it is these experiments that lead to solutions to problems as well as personal satisfaction. When I hear the click of the relay that automatically turns my drip irrigation system on – that feeling is priceless.
How much capital do you have and when do we expect cash flow break even?
We have enough capital to keep going for a year. Our current capacity is 60 orders per day with the given man power. When orders increase scaling up is as easy as getting more riders on board and through economies of scale our profit margins increase. We broke even last week. We have structured our operations on the lean start up methodology and therefore our costs are very low.
What are the key company milestones for the next 6-12 months that need to be achieved?
Within a month we will have our supply chain and quality control optimized. Within 6 months we will have most vegetables sourced directly from the farm. By next year we will have outlets in Lahore and Islamabad.
What is your end game?
Our end game is to empower the farmer and the consumer by making available Pakistan’s greatest resource – Pakistan’s agri products. The way you can read reviews about whether to buy the iPhone6 or the HTC M9, customers will read reviews about food vendors. This kind of a feedback loop will reward skilled farmers and highlight those that conduct malpractice. We have a few more tricks up our sleeves for which you will have to follow our journey.