‘Shohoz’ in Bangla generally means ‘easy’. But it can also mean straight forward. Fittingly, its founder and managing director is a woman of extreme clarity, as became apparent in her hour-long interview with Fintech.
Maliha Quadir emerged as one of the most important entrepreneurs in Bangladesh with the advent of the country’s largest digital ticketing platform nearly four years ago. As she talked to Fintech, her shrewd analytical mind and razor sharp business acumen shone through every word. Always concise and to-the-point, Ms Quadir walked us through the backstory of Shohoz, how the business was scaled, her thoughts on the e-commerce sector and its challenges, among many other things. She was particularly excited to tell Fintech about the Shohoz bike ride sharing service and how fast it has been growing since its launch only two months ago. Here is the excerpt of our conversation with Maliha Quadir.
FINTECH: You did your MBA from Harvard. And worked in senior positions in different global organisations. Could you give us an overview of your career please?
M Quadir: I grew up here, studied in English-medium. I went abroad for higher studies and studied at Smith College. After Smith I worked for Morgan Stanley in investment banking. This was in San Francisco, New York. After that I did MBA at Harvard. I then wanted to go into tech. So, I joined Nokia in Singapore. After working in Nokia I worked for an e-commerce company called Vistaprint. This was in Singapore too, I ran a digital expansion, basically into the emerging markets. I was the director for digital product expansion. Around that time, I came back to Bangladesh, I always wanted to come back.
FINTECH: When was this?
M Quadir: It was in 2013. I was looking into the e-commerce landscape in Bangladesh and found that there were possibilities in the ticketing industry. You will get advantage if you can be an early mover, which is important in e-commerce. So, I then proceeded to raise funds from foreign companies and angel investors. This was done by the end of 2013. After that got the office, hired our CTO from India in March next year, and then launched in May. Our software was launched. Around June/July we launched the website.That’s basically how Shohoz.com got started.
FINTECH: Before starting, how did you approach market research and business intelligence, especially in the Bangladeshi context where reliable data is not available?
M Quadir: Gut comes in a lot if you are doing business in Bangladesh. Ticketing is an established business model. Ticket gets digitized in all countries faster compared to other things. Ticket is always ahead in digitizing compared to other industries. It’s a sound business model. Ticketing businesses have never failed, given appropriate work was done. But lots of other startups fail routinely.
As for data analysis, it is very difficult in Bangladesh find data looking at the macro picture. But the BRTA data is available and you can get insights on how many buses are there and so on. And then you can talk to people on the ground as well. It’s ultimately looking into the government data, applying your own understanding of the market and then jumping into it.
FINTECH: So, how much the operation procedure has evolved since you started in 2014? How much trial and error you had to go through?
M Quadir: There was trial and error, particularly in marketing. People are not digitized here yet. So, we were practically teaching people how to buy tickets online. Most, in fact hundred percent of the customers that buy ticket from, mainly at the early stage, never bought anything online in their life. We had to think about if we should focus our marketing more toward online or offline. But in execution there wasn’t much of a trial and error process. There is a format and after we run our operation for a while we understood how to do it.
FINTECH: How much you have to depend on your partners for proper data input?
M Quadir: A lot obviously. The way we operate is that we digitize bus operators and ferry operators. We ask them to adopt our software and deploy it in their counters. We also push for stopping the sales of tickets offline and work through our software. It’s a major change for them, because these organisations are 20 or 30 or even 40 years old. They, specially the people working at the counters, cannot think of anything beyond doing the work through hand written, paper based record. And truth be told, people working at those counters aren’t typically very educated. From our experience, we have even come across people who had never seen a computer before. So, there is a learning curve and you have to teach it to them. But it has been great to see that people adapt very fast, typically learning everything within a week or two. But now that we have more structured approach to this, people learn to operate after a three-day training.
So, we are putting in a lot of investment and effort into this. This part is a big hassle that we go through for digitizing them, and then we are able to sell their tickets online. You have to enter into agreements with them and that takes time. But it’s a business transformation for them, major transformation.
It’s a very unpredictable industry. We needed four years to lay out the whole plan. It’s getting better now but it’s very difficult to get them on board. That’s where I think the evolving happened.
FINTECH: What the growth has been like in four years?
M Quadir: Growth has been very good. We have got 77 bus operators now. We have a number of ferry operators as well. So, majority of the industry is covered. It has grown well in four years. I know a few South-East Asian ticketing companies, and we are at the same level as they are. This is a very good thing for Bangladesh, but at the same time we are digitally very much behind other South-East Asian countries.
Ticket is just one element in the transportation sector. The sector is huge and our goal is to work with all of transportation industry. We have launched bus service on long routes. And since ride sharing has become legal from this January we started a ride sharing service too. It’s a bike sharing service called ‘Shohoz Rides’. We started in January totally on a test basis. But it grew well as you know, Dhaka’s transportation system is totally broken. Compared to this, the e-commerce side like selling tickets or anything else online takes a lot longer to grow.
FINTECH: Have you faced any regulatory challenges?
M Quadir: No. I mean, it’s not like better policies wouldn’t have helped more. If there was an incentive for booking bus tickets online, then that would have helped us a lot. But I haven’t faced any hassle because of regulations.
FINTECH: Tell us about payment gateway and how your payments are processed.
M Quadir: Payment is a hassle. bKash is a blessing; Rocket is a blessing. We have all the other payments, all meaning those that have majority market share. So, we have credit card as well as cash on delivery. But we do not encourage cash. Most payments take place digitally. But at the same time it’s not optimum. What is happening is that in the process of bringing up USSD, making a payment there, taking the code – people are getting lost. People are used to with person to person. So, that has been a big struggle for us. With mobile wallet in other countries you just put in your phone number and that’s it. Here, a lot of people don’t understand the concept of getting the code and using it for verification. Worse than that, lots of people don’t have either a mobile payment or a credit card. For e-commerce, if these things can be improved then online payment will increase.
FINTECH: What are the other problems e-commerce face? Also, are people increasingly adopting e-commerce?
M Quadir: Definitely, because the industry is growing. And that is because it truly does make life easier. We don’t have this problem, but for other companies that do not have a digitized inventory system, they face inventory mismatch. For example, the vendor offered you 20 items and you placed order for 20 items, but you end up getting 15. This doesn’t happen to us, because we have a separate software at the counters. We are fully digitized. We have some operators who are not digitized and we face this problem a little bit when we work on a quota basis, but that happens only very rarely, say one or two times a year. But it’s a huge problem for others.
Our neighbouring countries got huge finds in this sector. That’s why they have a lot of marketing, which hasn’t happened here. Very few e-commerce companies have been able to attract funding. We have entrepreneurs, but they also have to have an enabling environment. Bangladesh is still not among the favourite destinations for investment. Government has taken initiatives here. But I hope it does more.
For e-commerce to truly flourish and for digital business to grow you need money. For that you need a better image of Bangladesh. Foreign investors still see investing in Bangladesh as a negative thing.
We still need to advertise our positive sides, strengthen the government initiatives even more, and work a lot on the government level for branding Bangladesh.
For payment gateway you need a decision from Bangladesh Bank. Basically, the problem now is that you can’t send payment abroad. For sending money to Amazon, Facebook you go through a channel and the fee is very high. These things are a barrier to growth. There are a lot of digital companies now in Bangladesh. They need this. If these can be improved, then e-commerce will grow.
FINTECH: Going back to Shohoz ticketing service, one of the most important aspects of this service is dispute resolution, particularly given that customers are likely to be confused and make mistakes. Do you have a system in palce?
M Quadir: We get two kinds of disputes. One is when we sell ticket by taking a quota from an operator. So, for example, we made a deal with a bus operator where they asked us to book 20 seats. We book the seats and send them a report. But from that booking the operator sold a ticket. We get two or three cases like that in a year. In this case we refund the customer.
Other than that bus services can cancel a trip. We refund in that case too. And we try to do that as quickly as possible. But in case of trip cancellation we try to find another trip. Sometimes you just don’t get another trip at the last moment. This is just a norm in the bus industry. We can’t really do anything beyond that. But our focus is to see that there is no mismatch. Mismatch is a common occurrence for non-digitized operators. Same ticket gets sold more than once from different counters. We don’t have that because of our software.
FINTECH: When you first tried to persuade the operators what you told them or what they thought will be their best incentive for this transformation?
M Quadir: Efficiency. Like I said, the matter of mismatch is a big problem. It happens a lot. Another matter that the owners care a lot about is simply stealing. It’s bound to happen when the dealing is by hand, meaning not digitized. The operators are very savvy businessmen. They are familiar with the digitized service, as they see this abroad all the time.
FINTECH: Big Data is very important now. You have a big database of your customers. Are you being able to use it for extracting insights?
M Quadir: The closest thing we do is matching the data of when customers are travelling and how etc. In real fact, work with Big Data is done in Bangladesh by some, but as outsourcing work. They have software, through which they are doing this. But to my knowledge no one is actually using Big Data, I mean not for the purposes of their business.
For us, we are going towards that, started using machine learning and other things. The thing is, for using Big Data you have to have the big data first. We are trying to go toward that.
FINTECH: A bike ride share service recently launched for women only. Do you have plans for something like that?
M Quadir: I do want to do something in that area, because it is really difficult for women to move around Dhaka. But the problem is that finding women riders is not easy. The pool is very small. I don’t how much of business case is there within that. If it can be done, then great. It will take time that’s for sure. Ultimately, the reality is that in Bangladesh’s context it’s very difficult to work with women riders. I hope this is successful.
FINTECH: If you could change one thing that will positively impact – to use as an umbrella term – women empowerment, what will you change?
M Quadir: Honestly, I will try to find the right person as my life partner.
You can’t make it without a supporting husband. It works both ways, men can’t be successful without a supporting wife either. One of the first things I told my husband was that I’m very career oriented and you must be supportive of that. And he is. This is very important. Finding support from the family as a whole is important. As for changing something, mindset change is very important. For that you have to go to the rudimentary level and make changes in the education system.
FINTECH: if I change something it would be the education system. F: You talked about your ride sharing service. Did you plan doing this before or this is more of a response to the recent situation?
M Quadir: Not exactly. The goal of Shohoz was to do all of transportation. It was our business plan from the beginning. It was in our business plan from before. Another thing about which I’m determined is that I will not do anything illegal. Being compliant is very important to me. So, since we decided to go into all aspects of the transportation sector, it made sense to go into that segment as well.
FINTECH: What is your reach like now?
M Quadir: Not bad. I don’t want to grow too fast, because this is a service. You have to ensure a lot of things. That’s why we are not pushing to be very visible right now.
FINTECH: What is your base fare? And do you provide training?
M Quadir: Yes, we have in-house training. But we have more than that. We put in place a monitoring system that will prevent fraudulent activities and provide better service for the customers. We have an option for the user to let us know that a rider didn’t show up. We then cancel the ride and the rider doesn’t get that payment, which is a kind of misdemeanor that happens in this service. We are very cautious with this matter.
We are also working to make the price as affordable as possible for the customers. Our pricing level is cheaper. Our base fare is Tk30 and Tk12 per kilometer. But we don’t have surge pricing. All of that to make the price for customers as reasonable as possible. We are also specially working to make prompt payments to the riders. We pay them twice every day. They also get bonus.
In terms of unique features, we have kept it very simple. It’s a very simple product and it’s meant to be. I want to go from point A to point B and I want that to happen in the fasted possible time. We are working on that. Apart from that, we do have the standard features. But the main focus remains how quickly you can get the ride, what the quality of the ride. Since Shohoz has been operating for three years, it has been easier for us to get the traction faster. But you have to balance between the demand and supply. If you create the demand and then people can’t get ride from you, that’s something we don’t want.
FINTECH: Thanks very much for talking to us.
M Quadir: You are welcome. ■