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EDISON EXPRESS WANTS TO CREATE A COUNTRYWIDE BACKBONE FOR A VERY FAST DIGITIZED DELIVERY SERVICE

Edison Group’s most successful venture took the budget mobile phone market by storm. Consequently, Symphony mobile has become ubiquitous in the country. But the group has expanded to a number of other areas, with its courier distribution business Edison Express being the latest addition to the Edison family.

With a dearth of digitized courier services in the country, can Edison Express introduce a much needed modern courier delivery platform? We find out in our interview with the person overseeing the operations of the nascent company, Md Maksudur Rahman – FCMA.

FINTECH: Could you please explain the background of Edison Express? Why did you start it and what kind of market evaluation you conducted before starting?

M Rahman: As you know, Symphony is the market leader in mobile phone. We move one million devices in the market each month. And these reach all of 64 districts and go to thana level. We have 125 dealers across the country. We need to deliver Symphony products to them every day. We had been dependent on many courier services in Bangladesh for our mobile distribution. But we were not happy with the services at all. That essentially gave birth to the whole idea of approaching this differently and starting something of our own. That’s how and why we got started in the express business.

Another thing is that, as you probably know, the e-commerce site Pickaboo is one of our concerns. Pickaboo has really came to a dominant position within a very short time. So, we are doing the Pickaboo deliveries through Edison Express. It was in face one of the main reasons for starting Edison Express.

So, overall these are the two factors that propelled us to start this business: to enhance the services related to Symphony and secondly, to provide faster service for the e-commerce business.

FINTECH: Apart from mobile phone, you have other products as well. So, this must be helping with those segments too?

M Rahman: Yes, very much so. We are the sole distributor of Siemens. Part of our service there includes reaching those products to the customers’ doorsteps. All of our businesses that depend on delivery have been benefited by this.

The problem is though, the courier service business in the country is not up to the mark of high standard. We have a huge traffic congestion problem. And then no industry standard has been established. And that’s part of our whole vision now, to achieve that. Even we at the delivery level are operating in a traditional way. The delivery men are not accustomed to using modern technology. The e-commerce sector has advanced a lot worldwide. Even in our neighbouring country India, they have Amazon and other big international companies.

The fact of the matter is that the backbone or the logistic support needed for this business is far from reaching a standard level here. Companies that started e-commerce have made makeshift logistic arrangements. But for someone whose main business is e-commerce, they can’t make it cost effective if they have to provide the logistics too. So, that’s a challenge.

Even for us, this problem is an obstacle to developing our business outside of Dhaka. There is no guarantee when you will get products delivered after ordering from online. The standard practices like tracking system of your products – tracking where it is during the time between you order and the delivery – things like that aren’t available. We wanted to do that and we started Edison Express for that reason.

FINTECH: So, you started with the objective of serving the businesses of your Group. But then as a natural progression you ventured out of that to transform it into an independent business. What kinds of market study you conducted and tell us about your view of the market as it exists now.

M Rahman: This is a service dependent industry. But funnily enough, the service is missing. You have the scope do a lot in this sector. B2B and B2C, both models are dependent on this. We are currently focused on B2B, except in case of Pickaboo we do B2C. We have a fully dedicated motorbike service just for Pickaboo.

We are working with big companies. For instance, we have companies like ACI and FDL, who are the distributor for Samsung. We have also worked with and continue to provide service to Robi, Banglalink, BRTA and other big clients. Our market study showed that the industry has immense potential but the service is non-existent. Whatever service exists, it’s not digitalized to any significant level.

FINTECH: How long it took from setting up and bringing the business to fully operational stage?

M Rahman: Not too long. It took slightly more than a year. We started in May 2016. By end of 2017 we were fully ready to operate in 64 districts.

FINTECH: Did you have any regulatory challenges?

M Rahman: There was no regulatory challenge as such, but the approvals from the Courier Association and taking out the license involve really lengthy processes. They are very time consuming. But we did it. But there should be one-stop services for these businesses. If a startup needs six months to just fulfill these requirements, then that’s a big problem.

Outside of regulatory issues, I would say the difficult thing for this business is the traffic system. Bangladesh does not have a good traffic system in place, the roads aren’t developed to the modern standards. This makes keeping commitment to the customers difficult, because timely delivery depends on that.

FINTECH: Will there be more B2C in the future? What are you thinking?

M Rahman: We are in a way already very much into B2C. Because other than Pickaboo, which we own, we also provide the service for Daraz. That means we are working for two of the biggest e-commerce sites in the country. Moreover, currently we have over 10 e-commerce client in our portfolio, among them Lambo, Style Dunia, Xiaomi, Symphony e-shop, Hyde and other f-commerce customers.

Many more are interested. But we don’t want to expand without ensuring that we can scale at that level. We don’t want to get a lot of clients, even though we very easily can do that now. We are surveying our existing clients through satisfaction surveys and trying to develop the service accordingly.

FINTECH: You have four main segments in Edison Express. Tell us about that and which among these four segments is currently most important to you in terms of business and profitability.

M Rahman: The key area for us is the warehousing. We have a different company called Edison Logistics. This is quite prominent now. We have service agents across Far-east Asia, Europe and America. We predominantly serve the garments and Mobile sector. For garments export the logistics support you need is freight forwarding. For that you need to collect products from different factories and bring them to one location. And then you have to prepare them for shipment. On the other hand, Edison Logistics is one of the biggest service provider for handle import shipments for Mobile and its related accessories. We are thinking about tying up warehousing and warehousing solution to our logistics. We have our own needs and then we have the demand in the market. So, in addition to the supporting e-commerce, we are doing warehousing. We are doing B2B delivery, which we call distribution and we are doing the core courier service, which is delivering parcels of different companies.

FINTECH: How much of your operation is automated?

M Rahman: We are working on creating a real time tracking system. Thus far, we are able to conduct the messaging and vehicle tracking through online. But the level of digitization we are aiming for is still not achieved. So far, we have been able to digitize about 25 or 30 percent. Our ultimate objective is to enact full tracking system where the customer will be able to see and get updates about each step, from order placement to packaging to dispatch from warehouse to doorstep delivery. They will get sms notification, as well as will be able to check progress online. We have already got a few tracking systems on board. We hope to be fully digital by the end of this year.

FINTECH: Digitization is hard without a full ecosystem and if the whole industry is not digitized. And you can make use of a common platform if the whole industry comes under standardization. But Bangladesh doesn’t have that. Is that a big challenge for you?

M Rahman: You are right. We have only one road between Dhaka and Chittagong. Same for Dhaka to Rajshahi, Dhaka to Sylhet and so on. A number of companies are carrying our courier delivery through these routes. We are using separate vehicles and many are not being fully utilized.

So, why not create this backbone where one company will do the transportation on say, Dhaka to Chittagong and everyone else will use that backbone. That will reduce traffic and the service will get better too. We don’t have wide roads like Europe or China. If different companies run their own lorries and take up the space on the narrow roadway, that creates inefficiency and waste of resources. Bangladeshi highways are not fit to handle that traffic.

FINTECH: Your courier is all by road, isn’t it?

M Rahman: Yes. But right now we are working on International Courier and parcel service, hopefully with in next 3 Months we will start our international services.

FINTECH: Fedex has special arrangement with the pharmaceutical sector in Brazil and some parts of South America. Is something like that fitting or needed for the Bangladeshi market?

M Rahman: Our target is to create the backbone of the service. We have 50 clients, without counting our own Group. If we can satisfy them that will really work toward moving us forward. We want to cement our reputation very organically, through word of mouth. So, we are not really looking to create any specialized business model for focusing on any particular industry.

However, when we will create the full backbone within the next two or three years, all kinds of possibilities will open up. If then Alibaba or Amazon comes to Bangladesh, then we will be the first choice for their backbone. That’s the first step. We want to create an across country network. We want to be able to deliver anywhere in the country within 24 hours.

FINTECH: Where you want to see Edison Express in five years’ time?

M Rahman: My vision is that Edison Express will be the number one express service after five years. That’s our main target. We also want to grow as a brand and through word of mouth want to reach wide acceptability and highest reputation.

Other than that, we are looking into going beyond the inbound market.

FINTECH: What the setup will be like then, when you will operate internationally?

M Rahman: We will have international agents. We will be able to send and receive anywhere in the world from Bangladesh. That includes small parcels to a wide range of things. At the same time we will distribute things coming from out of the country. That is our ultimate setup.

FINTECH: You have repeatedly stressed on your commitment to high quality service. Typically, Bangladeshi companies start out with high standards in service. But then as they expand they tend to get careless about service. What is your thought on that?

M Rahman: If you look at our delivery staff for example, we have been maintaining very high standards in terms of their get up, training, development, what kind of benefit we provide them, etc. Our philosophy is that if our own people are not satisfied then how will they sell our service? For this purpose, we provide 25 to 30 percent more to our delivery personnel compared to what is customary in the Bangladeshi industry. We do a lot for their training and development.

The way I see it, we don’t have any wiggle room for providing bad service. That is not an option for us. We are here for the long-term. And we are working with a long term vision. We have invested heavily in this and there is no reason for us to stop improving.

FINTECH: Thanks you very much for your time

M Rahman: You are welcome

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