Thought Behind Things · Nov 22, 2021 · 1:29:52
Why Retailo is betting on Maksud bhai instead of dark stores
Retailo co-founder Naukhez Sarwar on going from boarding school in Hasan Abdal to a $10M seed round, what's actually broken in Pakistan's agriculture supply chain, and why empowering the corner shop is a better long-term bet than building dark stores on top of it.
with Naukhez Sarwar
12 min read
From Hasan Abdal to a $10 million seed round
The episode opens with Muzamil introducing his guest as a particularly accomplished one — Naukhez Sarwar, a co-founder of Retailo, which had recently closed a combined pre-seed and seed round of roughly ten million dollars. Before the conversation moves to the company, Muzamil asks a question he asks of most founders: where did you come from, and how did you get here.
Naukhez’s answer is unusually specific. He spent five years at Cadet College Hasan Abdal, the boarding school near Islamabad, on the family’s expectation that he would join the army. His father was a banker, his mother a school teacher, and his parents had three sons in three boarding schools at once. “At some point my dad’s salary and Hasan Abdal’s fees used to be on the same day,” he says. The first fee they paid was equivalent to four months of his father’s salary. Savings were exhausted, loans were taken, small properties were sold. Both of his younger brothers eventually did join the army. He was the first son — and the one who broke the plan.
The break came through the NOP — the National Outreach Program at LUMS. Naukhez applied because it offered a day off in Islamabad. The one-month training programme that followed was the first university he had ever seen. “It was mind blowing,” he says. “These conversations we never had.” His English at the time was poor enough that he could not read a full sentence on his own. He memorised a Baron’s vocabulary book cover to cover. He got in, picked a dual major in economics and political science, and graduated six months early in 2012 — because most of his credits were paid for and because, he says plainly, he thought everyone in his class was more talented than him and he did not want to compete with them on the way out.
The early stops: Shopistan, Careem, Taza Daily
Recruitment cycles were thin when he graduated. He joined a tiny LUMS-founded startup called Bagget — “we were trying to create a B2C marketplace for Pakistan, Amazon of Pakistan; but in essence we were selling T-shirts.” That lasted a couple of months. From there he moved to Shopistan, founded by an ex-Amazon, ex-eBay operator he immediately clicked with — and who, years later, became the first investor in two of Naukhez’s companies. At Shopistan he watched the team pivot from trying to build an Amazon for Pakistan to building the picks-and-shovels for retailers who wanted to go online: warehousing, photo studios, omnichannel software that connected physical inventory to virtual stores so that the nearest customer order could be fulfilled from the nearest physical shop. At one point, he says, Shopistan was processing roughly eight percent of Pakistan’s e-commerce volume.
He then left to start Taza Daily — a subscription grocery business built around milk. “I was mimicking that gwala,” he says of the daily milkman. At peak he had 250 subscribers and was selling three to four hundred litres of cow’s milk a day, plus occasional fruits and vegetables. The model broke on the cold chain. Fresh milk that is not maintained at four degrees goes bad in twelve hours; the existing supply chain stretched that to twenty-four using ice and preservatives. To scale past four hundred litres he would have needed Nestlé-grade collection centres and cold-storage vehicles, and no one in 2016 understood why a Lahore startup needed that infrastructure. The customer signal was also against him — Lahore is a buffalo-milk city, and his customers complained that cow’s milk did not give their tea the right colour.
What Naukhez learned running pricing at Careem
Later in the discussion, Muzamil pulls him through the Careem years in detail. Naukhez joined as a “vendor manager,” realised after a week that the role was managing rent-a-car middlemen — the opposite of the decentralised, captain-direct platform he had joined for — and refused to do it. He moved through captain support and performance in Lahore, then to Dubai as a pricing analyst, and within months was heading Careem’s pricing function across multiple markets.
His description of ride-hailing pricing is one of the cleanest passages in the conversation. There is a static layer — base fare, per kilometre, waiting time. There is a dynamic layer — the peak factor and its relationship to the demand-supply imbalance. And there is a city-specific equilibrium: ten thousand cars in a city is a different problem from five hundred.
Muzamil presses him on the persistent public claim that Careem and Foodpanda exploit their captains. Naukhez’s answer is unsentimental. “I don’t think any of these companies are profitable,” he says. “Some might be break-even now. They’re still burning cash.” But the captain resentment, in his reading, is not really about today’s economics. It is anchored to the launch era, when Careem and Uber were paying three lakhs a month against twelve-to-fifteen-lakh cars, telling drivers their car would be paid off in six months. “They have those good memories,” he says, “and not just memories — every captain knows every little detail about it, even ones who never lived through it.” Layer on top of that the unsustainable category of captain — the rent-a-car company that bought a car, hired a driver, and expected fifty to sixty thousand rupees of monthly profit after the installment and the salary — and the picture clarifies. That model could never have worked. The ride-hailing platform that works is one where the captain already owned the car and was already going from A to B.
Muzamil pushes on Foodpanda specifically — the thirty-rupee deliveries, the Panda Mart subsidies, the dispatches that cannot possibly cover cost. “It’s not sustainable,” he says. “I can see it. It is not.” Naukhez agrees, but with a distinction: there is a smart way to subsidise habits into existence, and there is an insane way. Careem itself, he notes, is still living with the consequences of the insane way. “You don’t want to build wrong habits. It’s very difficult to change.”
The thesis behind Retailo: protect Maksud bhai, don’t replace him
The conversation turns to Retailo itself. Naukhez, his cousin Talha, and his friend Wahaj — the latter at McKinsey, the former two at Careem in Dubai — had been brainstorming ideas before COVID. The pandemic delayed the launch. He and Talha took the first flight that opened from Dubai to Karachi when borders reopened. They went full-time in June 2020.
Retailo’s framing is deliberate. “It is an operating system for small retailers,” Naukhez says. The shop, in his words, is the person. “If that person is at the shop, the shop runs. If that person is not at the shop, the shop does not run.” He calls this person, throughout the conversation, “Maksud bhai” — the corner-shop owner Muzamil grew up sending kids to. There are three million Maksud bhais in Pakistan, and they are running their shops the same way their grandfathers did, on a calculator and a memory. The competition is no longer the shop across the street. The competition is Al-Fatah and Jalal Sons on one side and fifty-plus Karachi dark stores on the other — quick-commerce operators selling a hundred-rupee item for eighty rupees, free shipping included.
“This Maksud bhai has a family,” Naukhez says. “He has four kids, a wife, his sisters at home, parents he is supporting. That shop is an ecosystem. That family has been operating in that community for twenty or thirty years.” Retailo’s bet is that protecting that ecosystem — making the corner shop more competitive — is a better long-term position than building dark stores on top of its rubble. The world, he notes, is moving the same way. After a long arc of globalisation, US and European consumers are now asking how to eat local and support local. Pakistan can skip ahead.
What the product actually does
Muzamil interrupts the philosophical framing with a sharp follow-up: empowerment is an arbitrary word — what does Maksud bhai actually do with Retailo that he could not do before. Naukhez answers in operational terms.
A shopkeeper makes fifty to sixty supplier touchpoints in a typical week. Retailo collapses that into four or five. The mobile app aggregates suppliers, the back end aggregates warehousing and logistics, and an order placed by 11:59 PM is delivered to the shop the next morning. Roughly eighty percent of the portfolio is sourced directly from manufacturers; staples still come through dealers and wholesalers. By aggregating thousands of Maksud bhais on the demand side, Retailo cuts out the box-pushers in the middle — the wholesale layers that, in his words, “just stock goods and take margin without adding any value.” The shopkeeper pays for that convenience, sometimes accepting a price slightly above the wholesale rate, because the cost of going to the mandi himself disappears.
The key choice, Naukhez insists, is to own inventory and logistics in-house. “If we don’t own this piece, we don’t have visibility on what to sell, what Maksud bhai needs.” That data is what makes the next leg — fintech — possible. Retailo does not finance the shopkeeper itself. It partners with Finja and others. But the credit scoring, the decision of how much to finance, when and to whom, sits inside Retailo because Retailo is the only party in the chain that actually knows the shop. “A bank doesn’t know Maksud bhai,” he says. “Bank knows us. We know the Maksud bhai. We are the link.”
Why Saudi Arabia is the headquarters
In a market crowded with Dastgyr, Tajir, and a dozen lesser-known players targeting the same shopkeeper, Muzamil asks the natural question: what makes Retailo prime. Naukhez points first to geography. Retailo is headquartered in Riyadh, operates in Jeddah and Karachi, and was expanding into Islamabad and Rawalpindi the week of the recording. “We see ourselves as a regional company,” he says. The Maksud bhai persona is not Pakistani. It recurs in Sharjah, in Oman, across the GCC — frequently run, in fact, by Pashtun shopkeepers from the same supply pool as Karachi. The second differentiator he names is the team — eight nationalities, much of it sourced from the regional Careem alumni network that did not want to move back to Pakistan and did not have to.
The competitive landscape, he predicts, will consolidate quickly. “I think we’ll see a lot of action happen in this space in the next couple of years, if not months. There are a lot of players trying to target the same Maksud bhai. It doesn’t make sense for ten different people to go to Maksud bhai and offer a slightly different version of the same solution.”
The unfixable layer: agriculture
Earlier in the conversation, Muzamil takes a long detour into the agricultural supply chain — the eight-rupee tomato that arrives at the consumer’s door for a hundred and twenty. Naukhez resists the standard middleman-villain framing. The arhti, he argues, is doing real work. He is financing the farmer. No bank will lend to that farmer; no startup has the data or relationship to underwrite him. “The arhti is not a box-pusher. The arhti’s value is that he’s financing.” The box-pushers come after — the dealers and wholesale markets that stock goods and bet on the market by creating shortage.
The real lever, he argues, is not removing intermediaries but raising the farmer’s yield. Pakistan has some of the worst per-acre yields in the world; the Netherlands, roughly the size of a Pakistani district, exports more agricultural produce than the entire country. Tunnel farming, hydroponics, drone surveillance of soil moisture, district-level soil testing — none of it requires the farmer to be displaced, only educated and capitalised. “Input costs have already gone up four times on fertiliser. Output prices have to rise. The question is whether that extra margin reaches the farmer or stops earlier.” He points to farmer-run YouTube channels with millions of subscribers as a sign that the information layer is, finally, starting to move. Retailo’s exposure to this leg is on staples — wheat, rice, pulses — where the team is now studying how far back toward the producer it can integrate.
The POS utopia
Toward the end of the discussion, Muzamil pushes Naukhez on what he calls the POS revolution — the moment when the Maksud bhai’s shop becomes a fully digitised node, with barcodes at checkout, real-time inventory, accounting baked in, and the by-product gifts of whitelisting, taxation, digital payments and live data. The Foodpanda restaurant tablet is the model he has in mind.
Naukhez agrees the prize is real but is careful about the timeline. The shopkeeper is not a chain store. A chain store pays millions of dollars for ERP implementation, takes six to twelve months to train, and hires an MIS team to run it. The corner shop is two brothers on shifts. “Here the technology has to be very, very different,” he says. The current Retailo footprint covers roughly forty to fifty percent of an average Maksud bhai’s SKUs, out of a market that contains forty to fifty thousand SKUs in total and a Retailo catalogue of around fifteen hundred. Ninety-five to ninety-nine percent SKU coverage is, he believes, eventually possible. A hundred percent is not — the long tail of low-throughput items will never be economic to stock.
By the end of the conversation, Muzamil and Naukhez sketch a different end-state together — one where Retailo connects Maksud bhai not to its own consumer app but to existing hyperlocal marketplaces like Careem’s quick-commerce service. The Maksud bhai’s shop becomes a hybrid online-offline node. The walk-in customer keeps subsidising the unit economics that a pure dark store cannot. The corner-shop owner’s son, when the order comes in, takes the cycle out. Muzamil notes the time — one hour thirty minutes — and apologises for the deliberate poking. Naukhez thanks him for it. The future of retail in Pakistan, in his telling, is not the disappearance of Maksud bhai. It is Maksud bhai with better tools.
Full transcript
सारा ख़विदीना स्वरात welcome back to another episode of Thought to Hint. Things I have a and a ही ख़ास मेहमान जो कि बहुत ही अमीर मेहमान है. तो हमने You're okay. नौकरीस मुझे यह बताइएगा कि, in fact, I'll just put it out there, probably tightly में लिखा होगा. But, नौकरीस has been a part of, शाबिस्तान, of Taza Delhi, of Karim at one point in time as well. And then he cofounded a retailer, which recently got, recently, a couple of months ago, got, 10 point something million dollars in funding. That was your seed funding, essentially. Yep. Right. So it's pre seed and seed combined. Combined, right. Let's just, start this conversation with कि आपने पढ़ा हुआ क्या है और खाया हुआ क्या है जो आप? ये सारा कुछ कर पाए. You know, from high school, what's life been like? Yeah, so I
I went to Hassan Abdan, CAT College Hassan Abdan. It's a boarding school, अस्लामाबाद के पास ही है. And I spent five years there. And the goal was to, you know, the motivation of my parents to send me there was बच्चे को army विभेजना. And, you know, I was I was on track. I almost got into the army. But, you know, during, I think first year, there was this program from lumps called NOP program. Right. And this is national outreach program और इस program का मकसद है कि जो लोग exposure जिनके पास नहीं है और जिनके पास financial resources नहीं है to get into year one universities of Pakistan, this program helps those people to get into those universities. Where where are you originally based from? I'm, so I'm based, I'm I'm, you know, from गुजरावाला. Okay. So my parents, they belong to a small village. गुजरावाला से डेढ़ दो घंटे दूर towards नारोवल. ठीक है. And my my father was a banker. Right. And my mother was a school teacher. Right.
And हसन अब्दाल के so essentially
army was this sure shot success metric कि यार बच्चों का Exactly. Basically कि आपको अपने बच्चों का future secure करना है. आप उनको, you know, boarding school में भेजें, they're expensive. Right. But, you know, you bear that cost for five years. Right. And it, you know, gives you sort of guarantee कि आपके बच्चे army में जाएंगे and then their future is How expensive is, हज़ार अब्दाल? It used to be expensive. I mean, of course, it's really expensive. I remember at that time, this is 2,004 when I went there. So, the first fee that my parents paid was equivalent to 4 monthly salaries जो आपने initially pay करना था. जो उनकी चार monthly salaries बनती थी and it was a quarterly payment. So, at some point my dad, you know, salary and हसन अब्दाल की fees एक दिन होती थी. Really? So what did they like savings जो ने सारी exhaust की है उसके अंदर essentially? So, savings exhaust की बहुत सारे loans लिए and बहुत सारी you know जो भी हमारी छोटी मोटी properties थी वह salary. Right, wow. And and and, you know, हम तीन भाई थे. All three of them were in boarding schools at some point. अच्छा, हस्सा अंताली या different different? So different. So एक कोहाट में था, एक military college इल्म में था. So that was the cheapest school. Did anyone get into the army? Both of them. So all three of us were supposed to get in army. मैं सबसे बड़ा भाई था. अच्छा. And then it was a big trauma on my dad की, you know, बड़ा बेटा नहीं जा रहा army के अंदर. तो बाकी तो क्या करेंगे? All of that. बाकी तो चले गए. बाकी तो चलेंगे. चले,
you know, we'll we'll have a conversation with them as well someday. You so you you you took the NOP program from army to the NOP. What was that? Why was that decision there? So,
NOP program was very interesting. So, one, you know, the important ingredient of the program was, they used to shortlist people. Right. और shortlisting जो थी इस्लाम बाद में, you know, एक दिन की छुट्टी मिल रही थी हमें. That that was the only reason I, you know, applied for that. Right. तीन तीन चार चार महीने असरा अंदाल में होते थे. So, उसके बाद they had one one month program, training program in lumps जहां पर आपको lumps के students पढ़ाते थे. ठीक है. And that was the first time I actually saw university. And the first university I saw was lump. So I was I was mind blowing. Was like, okay, this is this is also a word. Right. A word that, you know, I don't know, a word that I haven't experienced. But this looks interesting. And people there talk about, you know, enlightened stuff. Right. These conversations we never had. Right. And, you know, that was something that struck with me. And then my takeaway from that, you know, of course, I was it was there was small hope that I can get into a place like this. Mhmm. बहुत बुरी अंग्रेज़ी थी मेरे इस time पर. And, you know, I couldn't, you know, read one proper sentence, on my own. पढ़कर, देखकर पढ़ सकता था. And then my takeaway was एक baron की book दी थी उन्होंने set की. Right. और वह set की book मैंने किसका रट्टा लगाया था? Right.
नहीं, और so NOP program essentially was a sort of pre, जो यह current program है, जो आपने लिया था, it's like a summer program sort of a thing. No no, so NOP program is, it's a program जहां पर वह,
आप अच्छे students को from all over Pakistan they identify those students. Right. और फिर उनको वह तैयारी कराते हैं of SATs, of entry desk, of universities. ठीक है. And then they do all the expense in the process. And then the idea is if you get into a university and they know your parents cannot afford a university. Right. So they will pay for your education for the next four years. So they they'll pay for your, you know, credit hours. They will pay for your boarding. They will pay for your lodging, all of that. Right. And this includes any university, whether it at Lums or any other This is primarily for Lums, but I think they're expanding now to other universities. And this is And every university has a program like this. Is it a government program or something program program. Right. So, got into lumps,
in in in what major?
So, in lumps I had to pick my major, right? So, after a year we pick up majors and I picked economics and political science. अच्छा, एक second. यहां पर मैं pause लूंगा. आपने FSC के या eleventh किया है? FSC. Commenting. आप सारे A levels वालों को बुलाते हैं और Pakistan मुझे A levels successful होता है. What's your thought on that? Do you think it's just A levels that makes you successful? No no, I think it it completely depends on you. Right. And you have to create your own path. Right. It doesn't matter आपने FSC के levels के, alums किया या UET के. हां. University में matter नहीं करती. आपका, you know, o levels और a levels में matter नहीं करता. जो आप मेहनत करते हैं, I think that matters. Right.
So you got into, so so what was the program? Sorry, major आपका क्या था? Economics? Economics and political science. Economics and political. Why did you choose these two sort of very I was I was young. I was coming from a very different background और उस time पर मुझे जो चीज़ें interesting लगीं, वह
एक political science थी और फिर लोगों ने बोला कि भाई, ज़रूरी होती है. कोई इस तरह की भी आपको subject नहीं होता तो I I did a dual major. ठीक हो गया. And you graduated in 2013?
I graduated in 2013. So, straight up after graduation,
where'd you go? So I was an early graduate. अच्छा. So I graduated in end twenty twelve, so six months before my classmates. Why? You took extra courses? I took extra courses. I took summer courses because, I mean, most of my credits were free. Right? So I could take summer courses जो normally expensive होते थे. And my my, you know, my thought process at that time was very nice. मैं सोचता था उस time पर कि यार, you know, all these people, you know, बहुत ज़्यादा मेरे से ज़्यादा talented लोग हैं और मैं I'm not as good as these people are. So it would be very difficult for me to compete with these people when I graduate. So I want you to graduate, you know, earlier ताकि मैं compete नहीं करूं इन लोगों के साथ जब मैं graduate करूंगा. Right. That was the plan. सही है. And so, graduated earlier and, you know, where'd you go? So, I graduated earlier. Idea was to secure a job before, you know, all of the university grads come out. Mhmm. It didn't work out because उस time पर कोई hire नहीं कर रहा था तो. Recruitment drives नहीं होती थी. So I ended up joining a very small company जो एक lumps grad की ही company थी. अच्छा, what was And that was and it was called Bagget. Okay. It was a startup. It lasted couple of months. I was, you know, the first first person who joined the company. Right. Or, you know, co founder था मेहता. I get. What was the what was the thought? It was, I mean, we were trying to create, B2C marketplace for Pakistan. Amazon of Pakistan बना रहे थे. अच्छा. But in essence what we were doing, were selling T shirts.
हां, वह straight out of college चाहिए होता है ना. अब एक बहुत बड़ा plan होता है और आप बस उसको तीन से शुरू कर रहे होते.
I right sold those t shirts for a couple of months but but that was my exposure into technology, that was my exposure in startups. And then I started looking at, you know, other startups. And this is a time when a docket internet was coming to Pakistan and they were launching a couple of startups. And the ecosystem was, you know, just Again, like, to sort of, yeah, get get started.
तो उसके बाद फिर आपने क्या किया? So, after that I,
joined a company called Shawakistan. Okay. And and that company at that time didn't exist. So, this was there was this, you know, ex Amazon, ex eBay guy, very energetic, very enthusiastic. And he came back to Pakistan, you know, to change or to, you know, to play his role for Pakistan. Right. And, you know, I met him, and it was an interview when the first conversation happened, and we immediately clicked. So his values and my values were very much aligned. Right. And then we worked together for next couple of years, and we're still working together, by the way. I'd you are. Yes. He he's still my mentor. He's, you know, he was the first investor in my startup Right. In my previous company, also this company. Right. And we we have that relationship with each other. So Shawakistan, you know, what was that about? So Shawakistan also started, you know, with the idea of creating Amazon for Pakistan. Right. But we quickly realized के this is this is, you know, this requires lot more infrastructure. This requires lot more resources. Mhmm. And maybe we need to, you know, pivot. Right. And our pivot was to instead of building an Amazon, we said, we we want to enable retailers. Mhmm. And these can be small players. These can be big colgumates. Everyone basically needs to go digital. Everyone knows that this is important. जो second or third generation, आपके retail business, family owned businesses की थी, वह America में बढ़कर वापस आई थी. So they had seen ecommerce. They had no clue how to execute on that. Right. तो we said we are gonna create a one stop shop that is going to take them all in. Right. And and this is what we did. So we were working with 40, I think, clients at that time. Most of them big family groups. Right. Or they went online for the very first time with us. अच्छा. And उनकी अभी जितनी भी, you know, managed services है सारी, वह अभी भी शापिस्तान ही कर रहे हैं? So, I mean, we started off by doing everything. We were doing warehousing. We were doing, you know, photo shoot. Because infrastructure नहीं था ना उस time पर Pakistan में. उस time पर Pakistan में आपको कोई studio नहीं मिलता था जो e commerce का shoot कर सके. हां हां हां. So, we created that that infrastructure. हमने वह studios hold build की कि हमने वह आपकी जो warehousing capabilities हैं, वह build की technology भी बनाई but operations का infrastructure भी उत्तरण किया. Right. Because उनके लिए chicken and egg का problem था. वह बोलते थे हम stock क्यों दें? यहां तो बिकता नहीं है. Mhmm. और जब वह stock नहीं देते तो बिक सकता ही नहीं था. Right. नहीं, so, you started off with that and eventually how'd you क्या निकला? So, eventually we ended up creating lot of products and services. Mhmm. Stand alone services that enabled these chains to, you know, to sell online in a more efficient way. So we are still doing lot of technology services. But on top of technology services, we also create lot of products. For example, one of the product that we create was omnichannel product. So that product, in essence, would take all their offline shops in every single part of the country, and it would it would take the shop online. ठीक है. And that the physical inventory of that shop is now connected with the with the virtual store. ठीक है. And once you get an order from a customer, जो nearest customer है, उसको nearest shop से delivery आ सकती है. So you save on logistics cost, you save on on, you know, all the hassle of managing, centralized operations बेरव सिंह UK जो होते हैं. Right right right right. और वह पर essentially जो आपका last mile delivery वाला है, वह वहीं से उठाएगा, वहीं से जाकर वहां से and then we expanded the service to and we started working with lot of regional companies. Mhmm. So, we were working with माजूदल फतैम at some point. इमार के साथ काम कर रहे थे and then US में company है Staples. We are also working with that company. So, we started off from Pakistan but then we realized कि हमें different because there's a product lack of the business. जो हमारी अपनी products हैं, जो हम as a सैसे sell करते हैं. And then there are also services business जो हम technology services देते हैं and then there's a managed service business. Right. So at some point we were managing around 8% of Pakistan का जो e commerce का volume है, that was going through शौकिस्तान.
Right और अब आप वह दहेलेगाब जो technology है, वह आप, you know, you can just sell that in dollars as well. आ बाहर किस customers को भी sell करना चाहिए.
You worked there for two years and eventually you left. What was the thought behind that? I I didn't leave an MLA. So I I spent almost three years there. Mhmm. And then I transitioned into into my own startup. Okay. And and, you know, my thought process at that time was that I have to make this company stable. Mhmm. And we have to break even. हमने unit economics break. Mean, whenever you were, you know, making a lot of losses at that time. Right. And the moment I did that, I I told Ali, hey. I I want to do something of my own. And he said, you know, this is the platform. And whatever you want to do, this is the platform. You start doing it from here from today. Right. And that's what I did. So you were essentially sitting at the same company, but you were I was sitting in the same office for for of course, not for long, for a couple of months. And then I moved into an incubator called Plan nine. Right. And then I was running my company from there. And that company was called Taza Daily? It was called Taza Daily. Why'd you... What was that, first of all? Like So Taza Daily was, a B2C grocery delivery company. ठीक है. So it it had a, you know, unique model. It was a subscription based model. Mhmm. So subscription product was milk. हम हम सबके घर में हर रोज़ गवाला दूध देने आता है. Mhmm. Right? So I was I was mimicking that गवाला. But the idea was on top of that milk delivery, मैं fruits, vegetables और बीची ना deliver कर सकूंगा. ठीक है. So how how many customers did you get it? So at at peak I had around 250 customers, 250 subscribers. So I was selling 300 to 400 liters of milk a day. Mhmm. And then I was also selling fruits, vegetables. Right. But that didn't work out? It it didn't it worked out in a way. I I learned a lot from that experience. But my growth was stalled. So the capacity of milk that I had was 400 liters. I was selling 400 liters. The net to unlock the next capacity, I needed, you know, huge infrastructure investment.
Needed to basically warehousing for milk?
Collection for milk. Similar to what, you know, Angroras, what Nestle does. They have their own collection centers. Mhmm. They do quality checks, and they have, you know, that rigid process. And then the whole supply chain of milk, it's easier for them because they have to, you know, USH read the milk. They have to, you know, it's not fresh milk. In my case, I had to do the manage the supply chain that they were running, under in under twelve hours. Because milk go bad, fresh milk go bad. More you can't, you know, keep fresh milk, unless you are using all those preservatives and, you know, all those chemicals. The life of milk from, you know, farm to door is is twelve hours. Right. And every time, by the way, for, you know, this supply chain currently in Pakistan is close to twenty four hours. How? Wait, so you you're saying कि बारह घंटे में ख़राब हो जाता है? बारह घंटे में ख़राब हो जाता है. Ideally depends on, बारह घंटे में तब ख़राब हो जाता है अगर आप उसका four degree temperature maintain करें. ठीक है. अगर आपका temperature, you know, जिस तरह normal supply chain के अंदर आप बर्फ़ डालते हैं लूत के अंदर. ठीक है. अगर आप बर्फ डालते हैं, अगर आप preservative डालते हैं तो आप उसको चौबीस घंटे तक hang सकते हैं. So this is what the supply chain does. ठीक है. मुझे existing supply chain से बेहतर infrastructure बनाना था. सही है. मुझे cold storage चाहिए था. मुझे cold storage
वाली vehicles चाहिए थी. All of that costed lot of money and no one understood at that time कि यह क्यों करना है? Right. So, आपको investment ही मिली. आपको essentially वह scale मिल नहीं सका. तो that's why that eventually had to sort of shut down. Yeah. Do you think the customers were ready to,
you know, go with you? Not really. That was also a challenge, right? It I mean, I was selling cow milk at that time. Lahore is big on buffalo milk. अच्छा, what's difference? So, cow milk is thin milk. Mhmm. आप जब चाय बनाते हैं तो चाय का रंग नहीं आता. Right? This is what, this is how customer used to describe me. और जो buffalo milk है, it's high in fat और वह चाय का रंग बड़ा अच्छा निकालती है. ठीक है. Cow milk is healthy. ठीक है. For kids, you typically use cow milk. Is this like non lactose or non No no, not. Lactose तो दोनों में होता है. ठीक है. Fat content का difference होता है. So, buffalo milk is typically three to 4%. Mhmm. Sorry, cow milk is three to 4%. Buffalo is seven to 8% of fat. Okay. और यह जो आपके milk pack में आता है, यह कौन सा होता है? यह mix होता है. Cow भी होता है, buffalo पर but but इसको उन्होंने 3% के ऊपर standardize किया होता है. ठीक है. Right? So, percent fat content भी है तो उन्होंने इसको dilute करके 3% के ऊपर लेकर आना So, when milk purchase happens, दूध की purchase पर leader नहीं होती. जब आप let's say किसी farm पर जाकर Nestle दूध ख़रीदते हैं. Nestle आपको per point पर वह fat pay कर रहा होता है एक x amount.
Point of what? Fat.
अच्छा. अगर आपका दूध eight, let's say, percent fat है, तो you'll get 100 rupees, let's say. और अगर आपका दूध 4% fat पर है, तो आपको पचास रुपए मिलेंगे. Same liter of milk with different fat content. Why? How? What what does that mean? Because because eventually आपने 3% पर जब standardize करने हैं, that eight liter becomes almost three liter जब आप 3% पर standardize करते हैं. अच्छा,
ठीक है. जो eight liter of
8% fat या 3% fat? One liter of 8% fat becomes three liter milk
जब आप उसको 3% पर लेकर आते हैं. अच्छा अच्छा अच्छा अच्छा. तो वह cost essentially वहां से, cover कर लेते हैं. How long did you run this? Almost a year. Almost a year. And, you know, obviously, was this exclusive to Merck? Yeah. Were you... Was was vegetables and fruit and vegetables a big part of this? So fruits and vegetables was was part of this but not big. Because
the subscription used to happen on on, you know, milk. And then anything that, you know, the household needs, for example, they would say, मुझे एक KG प्यास चाहिए, मुझे दो KG आम चाहिए. So, I mean, and that is not happening every day. So, typical household would order, you know, once a week, maybe, you know, twice a month. और आप यह जो sourcing कर रहे थे fruit and vegetable के, यह कहां से कर रहे थे? I was sourcing directly from the मंडी. अच्छा.
इसमें if you have any idea, and and I know know there are a few startups who are working. Actually, I I I heard of one. Farm Freshers, something of that sort of Islam, Adebairista. Easy Fresh, think. Easy Fresh, something like that. When I'm looking at the agriculture supply chain in Pakistan, I I find a huge discrepancy between what the farmer is selling and what the consumer is paying. And it's not like it's going through a lot of processing. So for example, if you go to The US, 30% of all of their, essentially produce is is wasted. पहले तो उनका यह है कि वह GMO की वजह से वैसी जो fruit आ रहा है, वह seedless आ रहा है, वह, you know, it's very much much cleaner than. बड़ा standardized किस्म का होता है. लेकिन उसमें भी what they do is, they do a lot of processing in a way that, you know, anything that is even slightly sort of sour और और पूरा तो वह उसको scrap कर देते हैं. So when you're taking it from the farm and you're essentially giving it to the consumer, तो दरमियान में अगर price difference आ रहा है तो it makes sense. Pakistan में आप farms जो उठा रहे आप उसको बस गाड़ियों में load जा रहे हैं, जा रहे हैं और eventually जाकर वह customer तक पहुंच रहा है. जो आठ रुपए का टमाटर है वह एक सौ बीस रुपए तक customer तक पहुंचता है. Why is that? Like, what are the nodes from a farmer to the customer जो कि दरमियान में basically यह सारा का सारा rent ले रहे हैं? So I think
this this market is a very it's a very diverse market. It's a very complicated these supply chains are very complicated because you're talking about unstandard unstandardized goods and इनकी जो supply chains है, they're also unstandardized. And you'll be surprised कि fruits और vegetables के अंदर almost every commodity has its own unique supply chain. अच्छा. Right? और उसकी जो operations हैं वह भी बड़े different तरीके हैं. And even you are talking about, you know, these big मंडिजs that we have in every city. Yeah. इनके जो merchants होते हैं within those मंडिजs वह भी different होते हैं. ठीक है. So if once someone is specialized in प्यास, that person is not gonna do टमाटर. ठीक है. टमाटर की expertise are completely different. टमाटर की supply chains भी different हैं, sourcing भी different है. Mhmm. So, I mean, there are commodities कुछ commodities के case के अंदर you are right, right? Because commodities की prices market forces determine करी होती हैं. For example, when I was in लाहौर की, I was used to operate from लाहौर की मंडी जो main बदामी बाग वाली मंडी है. क्योंकि वह दुकानदार है, उसने दुकान चलानी है, उसने दुकान खोलनी है जाकर. So, उस time पर जो spot price है, spot price is completely determined कि उस time पर supply के और उस time पर demand के. अच्छा. और मंडी के अंदर same चीज़ farmer की जो price है जिस पर farmer ने बेचा हुआ है, उससे भी सस्ती बिक सकती है. अगर supply ज़्यादा है और demand कम है. अच्छा, so वह उसके हिसाब से normalize हो रही है sir. But this is for goods that are perishable. जो perishable goods हैं ज़्यादा उनके ऊपर apply करते जो non perishable goods हैं या जिनकी life ज़्यादा होती है जैसे प्याज की life लंबी होती है और आपका potatoes जो आलू है उनकी life लंबी होती है and then wheat, rice, staples जितने भी आते they have their long life. इनके case के अंदर आपके you have lot of middlemen. Right. आपके जो middlemen हैं, you have you have a farmer. Farmer का relationship होता है आरती के साथ and it's a very complicated relationship. It's not, this relationship is not based on supply chain, it's based on financial supply chain. Typically यह आरती का रहा होता है. ठीक है. आरती या तो उसको वह सारी goods दे रहा होता या आरती उसको पैसे दे रहा होता है to buy those goods. ठीक है. और उसका agreement farmer के साथ यह होता है कि जब फ़सल पकेगी तो फ़सल मेरी.
ठीक है.
आपके पास processors आ जाते हैं जो mills होती हैं. कुछ processing होती है, right? Wheat के अंदर processing होती है, rice के अंदर processing होती है और उसके बाद फिर दोबारा dealers, दोबारा wholesale markets और उसके बाद retailer और उसके बाद shopkeeper. अब इस chain में you see lot of box pushers. Right. Box pushers are जो सिर्फ़ store करते हैं goods. हां. और उसके बाद box push करते हैं margin लेते हैं and they're not adding any value in the सब. आरती is adding lot of value. Ok. आरती की value है कि वह पैसे finance कर रहे हैं. ठीक है. इस farmer को आज कोई bank पैसे देने को तैयार नहीं. ठीक है. कोई startup हमारे जैसे भी he cannot trust, he doesn't have a relationship with the guy. Doesn't have enough data to basically identify whether he can pay back or not. So so आरती is not a box fisher. But आरती के बाद जितने भी लोग हैं वह सारे या तो वह stock करते हैं और वह पैसे मनाते हैं based on the time. Mhmm कितना time वह and they're betting on the market कि जी आज rate अच्छा नहीं है तो छह महीने बाद अच्छा होगा. क्योंकि आप बेच ही नहीं रहे तो rate तो ज़ाहिर अच्छा होगा. Mhmm. आप shortage create करें in the market. Right. And and that's how, you know, they they end up making money.
Right. Do you think and and, again, so you you've been you've looked at this entire, you know, sort of supply chain. Do you think there is an opportunity for, potential disruption,
within this space as well? Absolutely. Absolutely. I think and there are a lot of startups who are looking into this space now. And I think हमारी भी एक leg jets connected to this, especially the the leg that is connected to staples. We sell a lot of wheat, we sell a lot of rice, we sell a lot of, you know, pulses. तो वही leg हमारी भी connected है and we are also looking कि हम इस इस इस leg को कितना optimize कर सकते हैं and how can we integrate, you know, with the with the producers? Because FMCG के case में तो हम producer से ख़रीद रहे हैं. But यहां पर आपके पास commodities आ जाती हैं. Commodities के अंदर हम, you know, farmers के साथ किस तरह integrate कर सकते हैं और किस तरह उस leg को scale कर सकते हैं. हां, मतलब मेरा question आख़्मय यह याद है ना कि जब आप कहते हैं कि even though I get that the r r t is adding a lot of value,
you know, to the, to the farmer one way or the other. But मुझे मसला यह नज़र आता है कि आप आरती जब shortage के ऊपर या high demand के ऊपर, the the premium is going to the आरती. अच्छा, the आरती has no concern about innovation or or or or maximization of, you know, or optimization and maximization of the crop. आरती is only interested in कि यार मुझे जितना भी मिल रहा है, x amount मिलेगी, उसको उसके ऊपर मैं कितना margin रख सकता हूं, essentially. हां, आरती financer है. Financial, right? So, जब तक आपके farmer के पास excess capital नहीं आएगा, farmer कभी भी जाकर बेहतर tunnel farming नहीं कर सकता. Farmer जो है वह जाकर, you know, बेहतर seeds नहीं grow कर सकता. जिसकी वजह से हमारे यहां Pakistan में one of the worst per acre yield है. Not just in the region, in the world. In the world. Netherlands is is is is probably the size of a district in Pakistan produces more, you know, organic food, essentially organic or inorganic, however you'd like to call it. But वह पूरे Pakistan से ज़्यादा produce और export Because they're all about, you know, hydroponics and they're aquaponics and the tunnel farming and what's, you know, you name it. हम इस वजह से नहीं जा पा रहे हैं because हमारा एक तो हमने constantly food prices को control करके रखा है कि बस यही price है जो करके यह लो और, you know, just stop. And दूसरा यह कि तो so I think अभी जो food inflation आई है, I think I personally think it was a long time coming in a way that we've sort of normalized our pricing according to the region as well. Mhmm. But are we putting that pricing? And and I know that that's putting a lot of pressure on people, and it's it's really sad. I'm not trying to justify it. But I'm just saying कि वह normalization आनी थी one way or the other. Because if you look at the prices of the same commodities in in the region, you know, now we're at at par. अब अगर वह prices की, अगर वह premium जो है वह आरती की जेब में जा रहा है और farmer कभी भी वही मिल रहा तो we're not really looking at any any efficiency growth in the long run. क्योंकि वह है ना कि demand ठीक है, pricing बढ़ गई. तो अब automatically it incentivizes the farmer to put in more money and create more crop because clearly the the demand is there now.
But do you think that's gonna happen? So I think if you, again, this is not about आरती या farmer को पैसे जा रहे हैं या नहीं जा रहे हैं. Good prices are up because input cost is also up. So, जो आपकी आपकी जो farmer जो खाद ख़रीद रहा होता था, जो दो हज़ार की बोरी होती थी, आज जो आठ हज़ार की है. ठीक है. There's 4x increase in that. Pesticide की cost double से ज़्यादा हो गई है. आपके हर fertilizer, आपके seeds जो हैं उनकी base cost is also very expensive. Right. तो अगर farmer का input ज़्यादा होगा तो of course output भी महंगा होगा. ठीक है. Right? जो इसके अंदर I think जो जो chunk जो आरती को जा रहे हैं I think उसके अंदर अगर percentage में देखेंगे the amount has not changed. ऐसा नहीं है कि आरती ज़्यादा पैसे बना रहे हो पहले कम बनाता था. ठीक है. But at the end of the day farmer अभी भी आपका पैसे नहीं बना रहा. हां. आपके farmer की जो जो take home है उसका take home उसका survival के क़रीब है. Landholding कम है, right? अगर आपके पास एक average farmer Pakistan में चार से पांच acre land own करता है. Right. और इसके अंदर भी बहुत बड़ी distribution है. You have a big chunk जो one, acreage और less भी होते हैं and then you have, you know, these, you know, big, landlords जो thousands of acreage pay के ऊपर, you know, काश करते हैं. Right. So, at the end of the day, farmer की जो education है, I think that is something that हमने बहुत ज़्यादा काम नहीं किया and and there's some startups now that are working on that. और आपको किस तरह का pesticide किस area में जाइए. ठीक है. Right? और अब आपके space करने वाले drone भी आ गए हैं. अगर वह चलिए हम वह नहीं use कर रहे हैं at least surveillance वाले जो drones हैं, they are going to be very important. Surveillance के ऊपर this is the information the the nori the farmer needs to take action. Right? अभी हमारा जो weather rate है, हमारा जो, you know, even soil का जो rate है, right, we don't do regular testing Gomit level के ऊपर भी different areas के अंदर जाकर कि किस तरह की soil के ऊपर किस तरह का seat चाहिए. And दुनिया के अंदर all of this is happening. आपका जो moisture content of the soil, आपकी, you know, जो आपकी जो फ़सल लगी हुई है, उस फ़सल को अपने, let's say, पानी देना है, अपने pesticide देना है, अपने fertilizer डालना है, किस quantity में डालना है और उसको उसका balance किस तरह create करना है. In many cases हम overspend कर रहे होते हैं. Right. Pesticide, अगर let's say, आपको एक liter डालना था एक जगह पर, आप तीन liter डाल देते हैं. Because former doesn't know. अब वह three x आपने cost increase कर लिए और उसका फ़ायदा नहीं हुआ, नुकसान हुए. Right.
So even, you know, with with with all of this, again, क्योंकि जब आपने कहा ना कि, you know, हमें यह सारी research करनी हमने यह सारा का सारा करना है, my understanding is that we're gonna move on after this. But my understanding is कि, the farmers do not or or rather the the the industry does not have the margins required to actually invest in any of this,
or is that not true? I think this is gonna increase the yield, and yield increase in yield is the additional margin that you're gonna get. As you said, right? पूरी दुनिया के अंदर अगर जो yield Pakistan से two x, three x बेहतर है. हां. वह वह revenue जो extra आ रहा वह वह extra extra revenue margin है ना? Right. तो अगर आप invest करेंगे इसके ऊपर, मसला यह है कि हमारे farmers भी बहुत ज़्यादा experimental नहीं हैं. हां. Right? And अगर आप अभी YouTube channels देखें, जो farmer focused YouTube channels हैं, there are some channels that have millions of followers हैं. बिल्कुल ऐसे हैं. And they're doing really well and again what they're doing is they're dispersing education. It's a farmer who has created its own channel और वह दूसरे farmers को बता रहे कि यार यह experiments मैं कर रहा हूं and then people are following it. So, it's it's only a matter of time before you know. It's only a matter of time before this ecosystem grows. Right. Because आपके आपके गांव के अंदर अब smartphone है. आपके किसानों के जो बच्चे हैं वह, you know, TikTok, PUBG, They they have access to internet, they have access access to smartphone. Right. They are educated now. Right. And then YouTube is, you know, their favorite social media platform.
Right. And I think it's it's a matter of time before this this picks up. This picks up. Makes a lot of sense. अच्छा, so so you you got done with, Taza daily, you know, didn't work out, and so you decided, okay, अच्छा, I have to move on? Yeah. Where did you move on to? So I moved on to curry. What what year was this? And this is end twenty sixteen. ठीक है. Why don't you go back to Shapistan?
Yeah. So, Karim, I I had a friend who used to work with Karim at that time. And, you know, he I was pushing him to join me in Taza Daily, become a cofounder, and we're we're gonna do this together. And we have been friends since, like, 2010. We used to play Dota together. And, you know, so we had that relationship. Is he still with you at, you know? He's my cofounder at Retailer now. अच्छा. So he convinced me that, you know, come to come to retail, करीम. Right. And, you know, learn. This is a whole new world. Mhmm. And you won't find, you know, the depth of data. Mhmm. And scale you you won't see that anywhere in Pakistan. So come learn, and then we're gonna do something together. I mean, so I just said, okay. I mean, I I I'll, you know, I'll try it out. And then I talked to, you know, couple of people at Karim, series of interviews.
So I I got in. And what was the job role?
I had a very so my first role was a very weird role. My first role at Karim was vendor manager, and I didn't understand what vendor manager is until I got there. And then when I got there, I was told that vendor manager, you as a vendor manager, your role is that these are, you know, rent a car companies, big Limo companies. And we work with those companies, and these companies recruit captains. And then those captains work with us. So you have to manage a relationship with these, you know, big blimo companies. Right. And after a week, was like, I'm not gonna do it. I was like, you know, so my whole, motivation to join Karim, of to was basically that this is a model where, you know, you decentralize, transportation. Right. And you empower people to, you know, work part time, work at their own schedule. And they work directly with the platform, not through middlemen. Right. Right? So I was not fundamentally aligned with with that role. And then I said, I'm gonna figure something out, but this is not something I won't do. And then I started doing a couple of, you know, roles here and there. I did a role in support, captain support. I then got into, performance, and that was, you know, where you run incentives for captains to work on the platform, manage their schedules, all of that. Right. Performance is eventually where you ended up. Performance is where India. वहां पर कितना काम कितना नज़र रहा I spent ten months in लाहौल. ठीक है. And then there was this, role open in Dubai called a pricing analyst role. And I went to, you know, do that role. And then after a couple of months, I was heading Kerim pricing team. अच्छा. And I said How did how did that happen? So, pricing was a decentralized topic. Every city had their own pricing team. And when I moved there, so my first, you know and this was a Turkish lady I was working with. And my first role was to, you know, start centralizing start creating products that can help us centralize pricing. Right. And so we started, you know, taking control from the market. And then I was managing one market. So I was managing Pakistan, and then, you know, they said, okay, manage Saudi also. And I was managing two markets and then everyone else was managing one market. And then eventually there was this role open, and I became head of pricing. Right. And वहां पर कितना सा काम किया आपने? So I I did pricing role for around year and a half, two years. अच्छा. Pricing होता क्या है? Like, what's the So, so, ride hailing में जो pricing होती है, it's, it has multiple different legs. So there's a base pricing that you said. इस अनुभव बोलते हैं कि आप per kilometer आप यह charge करेंगे, base price यह charge करेंगे, waiting time पर यह charge करेंगे. So these are the static parts of pricing. Right. And then there's a dynamic part which is, आप कितनी peak लगाते हैं और peak जो है उसका relationship क्या होगा with demand, supply and balance के साथ और आपने basically so, you have to balance आपके captains किस price पर drive करेंगे और आपका customer क्या price pay करने को तैयार है. आपने एक stable state उसकी define करनी होती है. Mhmm. And that varies first from cities to city and that varies based on आपकी concentration of vehicle की है ना city. Right. अगर आपके पास शहर में गाड़ियां जैसे दस हज़ार गाड़ियां कच्चाईएं आपके शहर के अंदर और आपके पास पांच सौ गाड़ियां so dynamics different होते हैं. अगर supply challenge है तो different problem है, demand challenge है तो different Problem है. मुझे यह बताएं कि करीम के ऊपर या food panda के ऊपर या इस तरह के जितने भी आपकी services हैं, इसके ऊपर बहुत ज़्यादा यह शोर मचता है कि यह अपने captains को,
you know, चूना लगा रहे हैं और यह इस तरह से कर रहे और they make so much money. Do you think all of these companies are profitable at this point in time?
So, I can tell you कि I I don't think any of these companies are are profitable. I think, some of these companies might be breakeven now. And this is after COVID, lot of pressure on profitability on unit economics. So best case, some of these companies are are, you know, going to They're burning cash. But they're still burning cash. They're still burning cash? They're still burning cash.
So then how do you sort of reconcile with the fact, oh, you know, like, I don't know, Foodpanda is paying 30 rupees to their driver. It's so difficult and all of those things. Or or or Karim is giving their captain, you know, in such a tough economy. They're giving their captain a very smooth, you know, sort of small margin. जब आपको पता है कि customer पर ही क्योंकि clearly cost है, cost company की भी है उस पूरे infrastructure को run करने के लिए. Cost जो है वह driver की भी है और eventually customer जो है वह भी एक certain pricing के मातेहदी काम करता है. वह उसके अलावा आता ही नहीं है. So how does one reconcile with this constant criticism
कि यार यह तो ज़्यादी हो रही है? You know, किसी ना किसी नौकर साथ ज़्यादी हो रही है. I think and and I think, when I was doing the pricing role and this this was one thing that, you know, I had to look at, and I did couple of deep studies in understanding कि sentiment कहां से drive होता है. And I think there there are couple of reasons for this feeling. One reason is the expectations heading. When करीम, Uber, all these companies started and even food partner, right? Mhmm. They were paying, you know, exuberant amount of money. Right. To track the captains, yeah. Because captains नहीं थे. हां. और करीम और Uber के लिए तो the industry बनानी थी उन्होंने. Right. यह concept exist नहीं करता था. So, करीम over started with paying तीन लाख देंगे आपको. आप यह गाड़ी एक महीने के लिए चलें. हां हां. उस time पर गाड़ी की cost बारह लाख, पंद्रह लाख थी. हां. और आप बोल रहे थे कि यार आप छह महीने काम करोगे तो आपकी गाड़ी वन जाएगी. हां. And this is, I I have met lot of people who acclerated that. Right. You know, उस time पर Crazy bonuses, right? Crazy incentives, crazy margins और उस time पर fuel cost कम थी. Yeah. You लगते ही नहीं थे क्योंकि ride नहीं मिल रही होती थी आपको. But you are getting paid. Right. So, I think एक तो वह उस उसकी वजह से they have those good memories. Right. Right? And उन उन memories की वजह से And not just memories, right? Like, a lot of that that sort of becomes Chinese whisper कि,
you know, oh, तुझे पता है वह जो cousin है हमारे खानदान का, उसने तो जी cream चलाकर, कहां से कहां निकल गए? दूसरे cousin घुसे तो पता लगा जी. यह भी different थी. बिल्कुल ऐसी. तो उस
trend पर idea भी यह था. All these companies were doing this exactly for the same reason. Right. They wanted this to explode. Right. They needed thousands of drivers. Right. They need thousands of captains, thousands of cars जो exist नहीं करती थी उस time पर. Mhmm. और वह तभी इसी तरह आ सकती थी अगर शुरू वाले लोग insane amount of money बनाएं and then everyone convinces everything. It was difficult for करीम to convince people to drive for करीम. Mhmm. It was easier for करीम to convince couple of people who would go and convince other people. Right. Then it's a ripple effect. Right. So I think एक तो एक तो is because of that. The other, I think, aspect is ride hailing का जो model है, I think this model works best for a certain persona of of of captains. ठीक है. If you have a whole time job or a part time job Yeah. You have a card that you already own. आपने वह क़रीम के लिए गाड़ी नहीं ख़रीदी. Mhmm. आपने अपनी use के लिए वह गाड़ी रखी हुई है. Mhmm. And then if you drive for a couple of hours Yeah. Right? Then you're the happiest guy. You're the happiest captain. Yeah. Right? Because and then this You're not losing any money. You're not You're spending extra time to just earn some extra revenue. It's it's additional revenue. Yeah. And then the best captain that we used to, you know, profile at that time used to be a captain who's going from a to b. Profile of captain से बात करें. The worst captain used to be, the worst profile used to be अगर एक company है, rent a car company है, उसने एक गाड़ी ख़रीदी, उसने एक captain को hire किया और अगर वह बोल रहा है यह गाड़ी और captain दोनों road पर चलें और उसके बाद मुझे महीने का पचास साठ हज़ार रुपया profit भी जाइए. Mhmm mhmm. After paying for the installment of the car, after paying for the salary of the guy. Mhmm. And that guy is of course not going to be heavy. Yeah. And this was a model that unfortunately we as ride hailing companies incur it also. Yeah. At some point, right? We said कि आप गाड़ी rent पर लें. हम हम आपको जो है जी वह करवा देंगे banks के साथ connect करके हम आपको bank के साथ भी connect देंगे. हम आपको captains भी ढूंढकर दे देंगे. We used to do lot of vendor captain matching at that time. Yeah. But but I think that model was not scalable. Yeah, because वह वही हमारी बात है कि आपका जो entire premise था वह efficiency and optimization था
of a lot of wastage of, you know, गाड़ी आपकी जो है वह यह जो चीज़ थी of of essentially creating, you know, a requirement for drivers and cars and वो सारी सारी चीज़ें वो फिर again unit economics doesn't make sense. Do you think these companies because when I see Uber for example globally Uber Uber को मैं देखता हूं तो मुझे लगता है कि ये लोग basically cash infuse करे जा रहे हैं and hoping, वह holy spirit को activate कर रहे हैं कि किस point के ऊपर वह, you know, गाड़ियों में से driver minus होगा and that is the cost that becomes revenue for the for these companies, and that's where they make sort of big buck. You know, sort of self driving cars, and that's the end of the race, and वहां तक हम पहुंच जाए. Obviously, I can imagine that for for a market like The US or or Europe even, जहां पर everything is becoming so standardized and structured के, you know, eventually you can imagine that. You can imagine electric cars to be very very normalized and you can imagine कि suddenly ride hailing की cost जो है वो बहुत अदा नीचे आ जाती है because driver minus हो गया. You can imagine कि जो गाड़ी के आपके जो gas stations हैं वो gas stations convert हो गए into parking lots जहां पर ये गाड़ियां charge हो रही हैं constantly and they can just come out and and and pick you up and drop you wherever you want. Pakistan जैसी country के अंदर, do you think कि current model में जिसमें आप दो सौ रुपए में मतलब अस्सी रुपए में मैं यहां से उठकर जी मैं दस kilometer दूर एक bike के बैठकर चला जाता हूं. Do you think that's sustainable in the long run, or do you think eventually one way or the other they will have to sort of normalize this and and and and create the right sort of pricing? I I think the prices pricing now
is closer to the right pricing. Okay. Because now both these companies are not incentivizing. They're not giving money from their own pocket. And, somehow the marketplace is working between the driver and the customer. These people while they're not paying from their own pocket to these guys, do you think that they're able to cover the their own cost of doing business? They they have to. They have and and I think three days, back Uber showed their first profit. Ride hailing was profitable for them, I think, since last year. ठीक है. Their new businesses were losing money. Okay. But now on company level, they said, you know, we are we we are operationally profitable. Okay. So, eventually, I think if you look at Amazon, Amazon took its fair share of time to to show their first profit.
And Yeah. I I think it's it's not But then वही है ना? देखिए, the reason why Amazon आपने बड़ा अच्छा है मिसाल दी, but Amazon makes most of their profit through
the year of year. I'm not talking about Amazon. As a company. I'm talking about amazon.com, Amazon ecommerce. Right. So Amazon ecommerce margins are still thin. Don't make, like, 15%.
Well, basically, point मेरा यह है ना कि Amazon really sort of the way that they made money was कि they've never made money on on on sellers selling products through the margin. They eventually made money when they started really sort of monopolizing and deciding कि यार अच्छा ठीक है, तारे बिक रही हैं. तो Amazon basically से सिखा दो. Private labeling करो, OEM manufacturers का काम करो and that's where the bigger chunk came in and that subsidized the the other aspect of the entire market. And they have a lot of criticism as well for, you know, कि आप छोटे SMEs को ख़त्म कर रहे हैं and so on and so forth. Do you think... Again, so that's why what I'm trying to understand is, and and and Foodpanda and and Karim and Uber, these just comparatively bigger players. But then you look at players like Airlift, for example, or even Foodpanda, you know, Panda Mart is essentially trying to do do the same thing now as in terms of vertical integration कि they're just market में जी आठ हज़ार अस्सी रुपए का ले ले और सादा पचास रुपए मैं आपको note डालकर भेज दूंगा. These these insane tactics. These are, like, just burning cash left, right, and center, just trying to get the consumer in. But it doesn't, it it it doesn't make sense. It doesn't make sense. मैंने पिछले तुम खाना order किया. F six से खाना आया तीस रुपए में. तीस रुपए में आ ही नहीं सकता, sir. उस rider ने क्या पैसा बनाया खुदा ही जानता है उसको bonus से पैसा मिला है उसको उस बात पर किस बात पर पैसा मिला So sometimes I am just I am just sitting there and thinking it's great for me. It's great for for user it's great. Yeah ठंडी कोहगार यह मेरी सारा कुछ और है मेरे बच्चे का diaper ख़त्म हो गया. भाई मुझे नहीं जाना market. मैंने खोला और मैंने मंगवा लिया और मुझे उसने जो energy दो सौ रुपए discount भी दिया और वह भी free कर दी उसने shipping. But it's not sustainable. You can see it. It's not sustainable. It is not. So so at what point do you think this will explode or normalize?
So I think it depends on for for companies like Uber and Karim, I think it it already has normalized. Right. Now the expectation is clear on the customer and the captain's side that, guys, this is a marketplace. Right. You have to if you need a right, this is what you pay. Right. And if you want to make money, you know, this is this is how you work. Right. For these companies that are relatively new, they still need to build their customer bases. They still need to show those numbers those valuation and those fundraising is going to happen. Right. So, of course, they I mean, it's not it's not binary. These campaigns, sometime, they they work also. But you can't go insane. Yeah. I'm I'm I mean, they do work. I mean, I No. No. Of course. I mean, if you're selling anything for free, it's gonna work. Yeah. But but I think if, there's there's a smart way of doing this Yeah. And there's an insane way of doing this. Yeah. And I think if you pick the smarter way of doing doing the doing it Right. Then you're gonna subsidize. Yeah. Customer is gonna get some benefits. And, eventually, once the habit is built, you just sort of Exactly. You don't want to build wrong habits. That's also very, very important. Right. Because if you start selling goods for free, it's building wrong habits. It's very difficult to change. करीम आज भी यह मसला है. हां. आज भी captain को, you're fit with the captain. चाहे उसने वह उस वह ज़माना नहीं भी देखा हुआ ना, but he knows every little bit detail about it. वह आपको बता सकता उस time पर आप कितना bonus देते थे, कितनी guarantee देते थे और एक गाड़ी कितनी देर में, you know, ROA निकालती थी. हां. अब वह अब वह situation different है. करीम लखैर, to be very honest, recently my experience has gotten sort of worse as well. Don't know what's happening particularly with करीम Pakistan, but,
I don't know. There's something happening on the group level maybe. The drivers are... Every time I get a ride, तीन से चार दो बार cancellation होती है, auto वह हो जाती है तो. Welcome to marketplace. This is this is what a marketplace is, right? नहीं, but I think, Uber hasn't been doing that. I think there's some sort of, there's something happening at Korean guys. Please look into it. What's wrong? What's going on? But, so, yeah, so you so 2020 came in, and everybody was losing their jobs. And you said, okay. I'll I'll I'll leave my job. So, what was that all about? So we were three friends. And as I said All at Karim? All no. So at that time, one, Wahaj was at McKinsey,
and वाहाज is the friend, you know, who I want to do a startup with. I joined करीम because of him. ठीक है. He was at McKinsey. तलहाल and I were at करीम, and we both were at in Dubai. And ठीक है. And वाहाज was in कराजी? वाहाज वाहाज was in कराजी. Right. And then Vahaj flew in right before COVID. And, by the way, the discussions, all of this started before COVID. ठीक है. So this is Feb last year, and we were sitting in Dubai, and we were, you know, convincing each other on what to do, where to do it. That was also very important. And and we were brainstorming a lot of ideas. We were, you know, a lot of permutations of of of the same model that we eventually ended up doing. Right. And, and then COVID hit. And we were supposed to to launch earlier. We were supposed to leave our jobs earlier. But because of COVID, you know, our delay came in. Mhmm. And then, eventually, you know, when situation normalized... So me and Talat, by the way, took the first ride that, you know, opened from the way to After after the first COVID. After the first COVID. Right. And then, you know, we started in early June, and that's when we all all three of us, you know, came full day. But but why did retailer well, in fact, before going into that, what is retailer? So retailer is, is, an operating system for small retailers, SMEs. And let me, you know, help you understand what what this means. So, a small shop that is run by an individual जो एक आदमी चला रहा होता है, वह दुकान और shop एक चीज़ है. Mhmm. So that the that shop is that person. वह बंदा दुकान पर है तो दुकान चलती है. वह बंदा दुकान पर नहीं है तो दुकान नहीं चलती. And that small business surrounds that person, that one one, you know, one guy. हमारा जो goal है is to, simplify the life of that person. हमने उसकी ज़िंदगी को आसान बनाना है, basically उसके business को उसके लिए run करने के लिए आसान बनाना है. ठीक है. That small guy, I call it small dude, sometimes. So that small dude is competing with with things that he can't comprehend. And he's competing with modern trade. You see अल्फता, you see जलाल संस, you see all these chains that, you know, they didn't used to exist हमारे बचपन में. Right. They they are now a reality. And they're, you know, they have economies of scale benefit. They have, you know, buying power. Volumes बहुत ज़्यादा बड़े होते हैं. They have all the systems, their technology in place. वहां से जोरी नहीं होती, उनकी दुकान होते. उनकी दुकानों के अंदर, you know, damage जो है वह optimize होता है. उनको पता है कितनी चीज़ ख़रीदनी है, कितनी, all of that is being done back end पर जो ear earpiece लगे हुए हैं. Right. This small guy is running the shop same way his trad used to run the shop. Right. और पिछले एक सौ साल के अंदर दुकान चलाने का तरीका change नहीं हुआ. Mhmm. वह वह छोटे छोटे margins That's the only piece of technology he has in the shop. Right. And now we talk about D to C model, direct to consumer model. हम देख रहे हैं कि इसको compete, किस model से compete करने के लिए? We have players like as you said Airbnb,
Airbnb, Food Panda,
All of these players are saying कि आपको जो corner shop की ज़रूरत ही नहीं है. Mhmm. जो मकसूद भाई आपके गली के कोने में दुकान चला रहे थे, उनकी ज़रूरत नहीं है. हां. Because अब आपके पास एक side पर जलाल संस है. हां. और आपके साथ आपके पास दूसरी side पर यह dark stores हैं. हां. कराची में for instance पचास साठ dark stores already exist करते हैं. Right. यह dark stores हैं जिसको जिसके अंदर कोई मकसूद भाई नहीं है. हां. इनके अंदर, you know, pickers packers एक machinery की तरह काम करने वाले लोग होते वह हैं. चीज़ें pick करते हैं, चीज़ें rider के पास जाती हैं rider. Deliver कर देते हैं customer को. And the way they operate is, जिस तरह आप कह रहे थे, सौ रुपए की चीज़ है. आपको हम बहुत चीज़ अस्सी रुपए की देंगे. उसके बाद हम आपको, you Shipping भी नहीं charge करेंगे. Shipping भी charge नहीं करेंगे. हम आपको कुछ और भी you know extra देंगे. So he is competing with all of this. Right now उनका जो impact है, it's very small. Right. Right? उनकी penetration is low, but that penetration is going to go up. If this person, if this मकसूद भाई is not ready, if this मकसूद भाई doesn't change the way he's running his shop But, basically, the way that I see it is if unless मकसूद भाई changes the way that he does does his shop, he will be a rider in one of those dark stores. Yeah. Exactly. And this मक़सूद भाई has a family, right? Right. He has four kids. He has, you know, घर में एक एक बीवी, उसकी बहनें हैं घर के अंदर. मां बाप हैं जिनको वह support करते हैं. तो that shop is an ecosystem. Right. It's a family. Right. और वह family उस community के अंदर, you know, बीस साल, तीस साल की अरसे से it has been operating there. Right. And that community also needs because it's it's part of the lifestyle of people जो उस community के अंदर रहते हैं. Mhmm. So what we are doing is we are empowering that person Right. To, you know, to run his business in a way that is sustainable ठीक है. And to digitize the way he runs his life and his shop. Why this, though? Because And so what was the thought process? What why'd you you you bumped up a few ideas here and there. Right? Yeah. We bumped up a couple of ideas. So, I mean, the framework that we were trying to use at that time, we wanted to do something big and something that can create a real impact on people. Right. And we looked at lot of these these segments, and this segment the reason this segment popped up was because we could relate to this segment. We in our communities, we have been a user of this. We have been a customer of Maksud भाई. And मकसूद भाई had an impact on our lives. And we see and and we, you know, as a kid, when we used to go to मकसूद भाई, we used to hear things like, मकसूद भाई, यह सिर्फ़ मिलेगा. बोलेंगे नहीं, यह तो supply नहीं आई. Right? And and this used to be regular occurrence. Right? And फिर आप कहते हैं अच्छा इसी दुकान पर नहीं मिलेगा, मैं दूसरी दुकान पर check कर लूंगा. फिर आप तीसरी दुकान पर check. And we are, we as users, are now ourselves moving to direct to consumer world. हम अपनी groceries online हो जाते हैं. हम, you know, जलाद साहिल, अलफातारी modern trade stores में जाते हैं. Right. So, what we wanted to do was हम हम उन मकसूद भाई के साथ sympathize करते हैं and we wanted to make him more competitive. And and by the way, this is where the world is moving. It's not just Pakistan के अंदर we are talking about, you know, how do we empower, you know, direct to consumer model. But दुनिया के अंदर it's it's a full circle, right? We started off with globalization then we came back to localization. अब हम दुनिया के अंदर भी कह रहे हैं, Europe के अंदर, US के अंदर कि यार, how do we support local businesses? Right. How we how do we eat local? How do we support local? Right. Right? And I think हमारे लिए भी it's equaling point कि हम मक़सूद भाई, को protect करें और मक़सूद भाई जैसे तीन million लोग Pakistan में exist करते हैं. Mhmm. जिनको, you know, जिनको यह infrastructure चाहिए. Right. और जिनको यह operating system चाहिए to manage their business and finances are more efficient.
Right. So just to try to understand, how would you differentiate between this? And and I know the the the people who are still listening here. Dastegir came in recently, and we we've seen the example of Tajir as well. Know, very similar space. Everybody's trying to go after the maksudbahis. Maksudbahis certainly is in demand. And, obviously, I think nobody doubts, or at least anyone who has who's who understands what's going on does not doubt the the, the scale of this, opportunity. And they definitely do not doubt the, the requirement, of this opportunity as well or or or this innovation as well. Probably my question is, how would you because I see so many players now. यह जो मैंने तीन नाम लिए हैं but इस तरह के पचास साठ लोग कर रहे हैं काम. दस बारह तो अब नाम market ना ग़लतीश करना शुरू हो चुके हुए हैं, funding आ चुकी हुई है. What makes you prime? Because you've also gotten the most amount of funding as well. What makes you prime, to be able to provide the right sort of service versus any competition, for example?
So I think one a couple of differentiators. And one key differentiator that we have versus all the other names that you just said, we see ourselves as a regional company. So we operate in we're actually headquartered in Saudi. We operate, Riyadh Jeddah, Karachi, and now we are expanding into Islamabad. So we're we're not only limiting ourselves to Pakistan. Our intention is to build a world class team, to build a world class organization that will eventually create a a number one regional company in this space. Because these maksudbais, you'll see in Saudi if you have been there. You'll see these them in Sharjah. You'll see them in Oman, you'll see them in all the all the Middle Eastern countries. Right. And we used we we were living there. Right? We were looking at the maksud भाई there. Right. And then we already had seen the maksud भाई here. And we said the problem statement is the same. By the way, in GCC, most of these maksud भाईs, they are from South Asian region. Right. You'll see, you know, a Patan by sitting behind the counter, and he's he's running the show there. Right. So I think that is one differentiate and and and and and true the true differentiator, in my opinion, is the team. Okay. Because we are headquartered in Saudi. We have worked in regional companies in the past. Right. We were able to attract talent that is very diverse. So around right now, we have around people from around eight nationalities. So we're not limiting ourselves to Pakistan when it comes to acquiring and, you know, retaining talent. We're focusing on the broader talent in the region. Right. Right? And the top talent from that, you know, was working with us at Karim, it was not based out of I mean, a lot of people were based out of Pakistan, but there there was this whole chunk that migrated from Pakistan to UAE offices. Right. Right? And we, you know, wanted to work with those people because we have worked with them closely in the past. Right. And we couldn't convince them to come back to Pakistan. Right. So what we said to them was, hey आप उधर करें. एक, आप उधर ही करें. Right. थोड़ा सा मुझे यह बताइएगा. पहले जो मैंने आपसे पुछा कि, you know, what exactly are you doing,
or or rather मैंने देख क्या ही पुछा, आपने ख़ुद उसको simplify किया था. You said you're empowering the मक़सूदलाई. Got it? It's an arbitrary statement. Practically,
how what does that empowerment look like? What exactly is मकसूद भाई able to do with you that he wasn't able to do before? So, मकसूद भाई की ज़िंदगी के जो मसले हैं, I think we we have we look into that as an organization. We look into what where मकसूद भाई spends his time on and what does मकसूद भाई need. Right. We started off with a B2B marketplace. Mhmm. Right? मकसूद भाई चीज़ें उनको दुकान में बेचने के लिए चीज़ें चाहिए होती हैं. Mhmm. वह चीज़ें जान लेने के लिए either, you know, a distributor comes in or he has to go to a wholesale market. Right. On average, if I can, you know, quantify it, they're roughly 50 to 60 touch points in a week that मकसूद भाई makes. ठीक है. He spends lot of time in those markets. Right. What we did in the start was हमने एक, we built a mark, mobile app. उस mobile app में we aggregated all the suppliers there. All the goods he needs for his shop. Most of the goods he needs for his shop. And वह एक clip पर order करते थे और उनको वह चीज़ मिल जाती थी. वह आप लोगों की अपनी गाड़ी दे देती थी जाकर? So हमने उसके back end पर इसको उसको empower करने के लिए we built warehousing. ठीक है. We built our own logistics और हमने बोला कि मकसूद भाई की जो यह problem है उसको हमने solve तो आपको वह सामान Friday को ही मिलेगा. ठीक है. हमें बक़सूद भाई रात बारह बजे तक eleven fifty nine पर order करेंगे. हम अगले दिन सुबह early in the morning उनको वह सामान deliver कर देंगे. ठीक है. तो हमने अपनी जो back end के ऊपर जो operational capabilities हैं वह इस तरह बनाई हैं कि हम उनको as low as twelve hours के अंदर और worst case twenty four hours के अंदर हम deliver कर सकें. ठीक है.
You you source from the brands directly or are you sourcing from wholesalers or distributors?
या किस तरह से क्या है? So majority of the goods, we are, I mean, FMCG we are working with, you know, majority of the top producers, manufacturers. Staples we are working with, you know, either dealers or wholesalers right now. We haven't, you know, gone beyond that. Importers होते हैं बहुत सारे because बहुत सारी commodities आपकी import होकर आ रही थी, बहुत सारी local होती हैं. But अभी हम वह wholesale market से, source कर रहे हैं. ठीक है. But roughly 80% of the portfolio is sourced directly.
And that source, that that, essentially, that sourcing is not, like, sort of, broken down. That's basically, you're sourcing a large large amount, and then you're distributing that across multiple Absolutely. Different, sort of shops, right? Yeah. How are you making money? So, And and before I ask this, मैं कहता हूं कि जी मैं मकसूद हूं. Mhmm.
And मैं जो हूं वह दस रुपए की व्यवस्थी पर bottle ले रहा था. Mhmm. मैं आपके पास आता आपके तेरे के तेरे. अच्छा. अगर आप मकसूद भाई हैं ना तो मैं आपको पचास से साठ interaction बोल रहा था ना, वह पचास से साठ deliveries हैं जो आपको goods की आती हैं. ठीक है. So आप अगर मकसूद भाई की दुकान पर खड़े होते हैं तो आप देखते हैं एक supplier आता है. ठीक है. तो वह जो पचास checker लगते थे हमारी case के अंदर वह चार से पांच checker हो जाते हैं. ठीक है. अब this is saving on the vehicle cost and vehicle का जो fuel है. ठीक है. एक तो यहां पर हमें you know जो सब्माना ना है. वह हमारी यहां पर reduce होगी. ठीक है. Second हम क्योंकि इन जैसे बहुत से मकसूद भाई aggregate करें. ठीक है. तो अब जब आप chain में से wholesaler जिसको हम box pusher बोलते हैं, वह आप reduce करते हैं. Mhmm. तो आपके जो margins हैं वह unlock होते हैं because every box pusher is gonna take some margin. Right. जब हम उनको delivery on the shop दे रहे हैं, कुछ चीज़ें wholesale की price से महंगी भी हो सकती हैं. ठीक है. And he happily pays for that because he's getting those goods delivered. Additional cost भी नहीं लग रही और convenience भी मिल रही है. ठीक है.
Do you think if I were to differentiate you between, let's say, the product road map of Destiguil, for example, I would say Destiguil is more of a, data company primarily because they're not really looking... They're not interested in warehousing. They're not interested in any of those. And they're what they're doing is they're saying कि भाई, हम cross channel घुमाकर, बस किसी तरीक़े से हम optimize करके customer को लाकर दे देंगे. कैसा हद तक कर सकते हैं, कैसा हद तक scale कर सकते हैं? It's a question mark. Whereas you guys are really sort of, you you put your your cards behind, warehousing as a as an entire thing. And so do you think you could be called a more efficient distributor? A technology enabled, high efficiency distributor. So, essentially, disrupting the distributors, you know, And maybe or or and maybe some of the other players. Like, for example, I think, Finja is also doing something with someone. I'm not sure who We are also working with Finja. Yeah. So I think जिस time मैं Finja को देखता हूं तो they're more more interested in the credit side of things. कि यार, ठीक है, how do we sort of help the shopkeeper make more money and by, you know, getting easy financing. Then there are companies jokes, essentially, maybe are in it for the marketing aspect of things, where they're able to get that data of what people are buying in different regions at different times, and real time they can do that analysis and they can sell that, product. What I'm trying to understand is, एक तो यह चीज़ के, I I remember Food Panda was used to be, so they acquired a company called Foodoe. Or Oe. Eat Oe. Yeah. Absolutely. I think I I believe the current CEO is is was actually the founder of Eat Oe. Then, do you think there are some mergers and acquisitions coming in the over the next come couple of years? Or do you think every player eventually what they'll do is they'll just sort of find their own path and say, listen. This is the problem that we wanna solve. Because I feel like there are a lot of problems there. It's not just, like, it's the एक point पर तो आप यह कहते ना कि यार, ठीक है, एक मगरमा चाहेगा और वह जी पूरी market को ले जाएगा. That's the dream for everyone, right? कि मैं top to bottom manage three sixty degree. मैं ही आपको credit दे रहा हूं, मैं ही आपकी distribution manage कर रहा हूं, मैं ही आपको जो है वह, you know, marketing support कर रहा हूं and and I'm connecting you to the consumer as well. And then उसी के अंदर मैं note add करता हूं. मैं last mile delivery वाला बंदा डालता हूं. कहता है जी, मेरी ही dark room छोड़ो तुम मेरी मकसूद भाई से उठाओ और जाकर deliver. You know, such, sky is the limit with what you can do once you have the technology enablement. But then realistically speaking in a country like Pakistan, या क्या होता है कि लोग कहते कि यार ठीक है, you know, I'm going to this is this is my domain and I'm gonna go above and beyond KLI, सियालगुर, गुजरावाला, every every all over Pakistan but this is my expertise and this is your expertise. Now we may be able to create some sort of linkages in between. Or the third is probably, you know, listen. Like, we both fought the game. You fought it well, but I fought it better. And so I'm going to either merge with you or acquire you or So where do you think in the longer run this would this would go? I think you you asked a couple of questions in one go. So I'll respond, you know Step by step. Step by step.
Your first comment on whether we are a efficient distributor or a data company. I think we we are an efficient distributor for sure. At the same time, we are offering a suite of services. So fintech is one leg that we recently launched and because all these services are connected. So if you talk about procurement inventory, right, you can't, I mean, finance inventories if you're not selling goods. Yeah. It's very difficult for a third player to come in come in and say, hey. By the way, you are getting goods from retailer, but we are gonna finance you Yeah. Separately.
Yeah. Very different. Make sense. But but then so my quest the reason my question exists is you said you you've partnered with Finja. Right? So So so we we have we have partnered with Finja, and we are also working with couple of other players in the same space. Yeah. When it comes to the fintech led. Okay. Right? So So you didn't decide कि यार, ठीक है, मैं अब इतना बड़ा मगरमच्छूं कि मैं ही यह भी कर लेता मैं ही वह भी कर लेता You decided to let someone have their their expertise, and you just sort of connect with them and be for them to be able to advise you on their through their algorithm. Listen, what's the best way to sort of Absolutely. And and I think this collaboration will will happen a lot, And there's some areas that we're gonna do ourselves. There's some areas where we are gonna team up, partner up, maybe acquire, merge, you know, companies,
with with companies that are, you know, trying to solve the same in the same space and where, you know, there's alignment on values. There is an alignment on ethos. Right? We need a lot of consideration when it comes to mergers and acquisition. But answering your questions on specifically on mergers and acquisition, I think we'll see a lot of action happen in this space in next couple of years, if not months. And there are a lot of players who are trying to, target the same maksudbahi. Right. And it doesn't make sense for 10 different people to go to maksudbahi Yeah. And offer, you know, similar or slightly different version of the of the solution. Yeah. And then there are a lot of regional companies that are also, you know, active, and they're also trying to look at their expansion. Yeah. Right? So I I think Within the same space? Within the space space space or related to this this space. Okay.
What about when we talk about distribution, and I know this for a fact, these are generally conversations, but a lot of distributions, particularly, let's talk about maybe liquid drink companies. Okay. It's very political. You know, these are, like, big big players, big money. And so even within competition there, बड़ा political होता है, बड़ा यह होता है कि भाई उसका fridge क्यों रखा है, मेरा fridge रखो, you know, यह धमकी, वह धमकी, इस तरह, उस तरह. You know, you guys are just, like, these are tech... Technocrats, right? Like, all of the the duster gears and the the retailers and the ताजिरs and young लोग हैं, पढ़े लिखे लोग हैं. इनका तो कोई वह नहीं है, बदमाशी वाला scene ही नहीं है. तो पुराने, you know, distribution में तो बड़े बड़े prime players बैठे हुए हैं. Do you think you're gonna be facing these issues as well? Because you're now gonna be directly targeting, some some very very age old rent seeking easy businesses, right? कि भाई ठीक है, आपने बस इधर से उठाया, इधर से दिया, customer ने ख़रीदने ख़रीदने advertising जो है वह main company ने करनी है, आपने मार उठाकर देने का पैसा ले लिया. But suddenly now there's someone who's saying, listen, like, we'll we'll do that. We'll do that at a at a at a cheaper price, more efficient. You know, less fuel consumption, less everything. Do you think that's a that's potentially a concern? KR यह मसला आया है at some point? I think if if you look at the market,
the way these FMCG companies work and these big companies, they they have managed distribution for a very long period of time. Right. They have expertise of running distribution for over hundred years. Right? Right. And they every every company has its own ethos when it comes to managing distribution. Right. You'll see some companies who would have three distributors in a city. Yep. And he would want all three of them to compete with each other. Yeah. And that company wouldn't want one distributor to become Too too powerful to start demanding stuff. Exactly. Yeah. And they would have, you know, between distributors and subdistributors, three, four hundred distributors across Pakistan. Yeah. And then you would have companies who would only work with one distributor. Yeah. And that one distributor has, you know, long term contract, huge investment done, and that that distributor is, you know, managing even if they're selling to metros and, you know, these it's coming from the distributor. And distributor is very, very powerful there. Right. And so I don't I don't see a world where we are go and we have been operating, you know, this business since last sixteen months now. Right. We haven't faced a direct and we are working with many distributors, by the way. In many cases, brands when they start working with us, they want to work with us through our distributor because they don't want to, you know, अपने distributor को नाराज़ भी नहीं करना चाह रहे होते हैं. हां हां. तो तो they're using into the entire thing. हमारा relationship start होता है wholesale से. Right. हम wholesale से शुरू करते हैं. Volumes build होते हैं, हम जाते हैं brand के पास, इतने ही देखें. हमारे Let's dealer से
not go there, right? So there there is a there's an evolution there, and and eventually things are gonna change for for for the market. One of the things that I've been trying to sort of understand from from all of the players who who who are now focusing on the करियाना market. And I'm gonna break this question down into two. एक यह कि at at what point can we? So a lot of players are right now targeting कि यार मकसूद भाई दिन में एक दफ़ा mobile उठाएं, चीज़ें choose की. Ok, place order, mobile लग दिया and now the technology and the मकसूद भाई do not have to connect. When I see, for example, what Food Panda did, I really liked. I I I found that quite fascinating what they did with the restaurant industry. You know, I have, I have a दिली लगाऊ with with a role पराठा company. घंटे में साठ roll पराठे बना रहा हूं तो मैं exactly इसी किस्म का system जो है वह इधर लगाकर तो घंटे में एक सौ बीस कर लूंगा अब cost अपनी double करके. लेकिन मैं यह नहीं कर सकता कि मैं किसी तरह इसके अंदर एक you know उसको optimize कर लूं. Similarly, I have to reach out to people तो I can't do marketing properly and चाहे ना उनकी वह knowledge नहीं थी. Calculator भी बहुत बड़ी game थी. रखना वह सारा का सारा दिमाग़ में हो रहा होता था. और वह जो POS system है, वही उनकी सारी accounting भी कर रहा है. वही उनकी सारे revenue and वह सारा Margins, conversations, सब कुछ होगा. Everything is being managed over there now. At what point? Because I feel like for me, the biggest empowerment here is definitely the fact that they're able to reach out to the customer. Sure. But I think that that tablet that Food Panda has provided them helps them do a lot more than just deliver food. Exactly. Right? और मैंने multiple लोगों से पुछा, you know, they they always said कि ok, that's part of the product road map. But do you think, I mean, at what point can we see मकसूद भाई to have things like, you know, we're we're constantly talking about यार Market जाना बड़ा मुश्किल है, हो गया मुश्किल. What about barcoding? What about, you know, all of that accounting that's being done? What about all of that through that POS? So at what point will we be seeing the POS revolution happening? Because उसका एक मेरी angling उसमें एक और है. मेरी angling उसमें एक इस तरह से है कि आपकी, पहले तो सारा का सारा जो है ना system में आ रहा है. You know, you're you're you're able to track everything down. क्या हो रहा है, किस तरह हो रहा That's great great for the economy. Whitelisting हो रही है. दूसरा आपका जो है ना it's essentially eventually आपकी taxation में आपको फ़ायदा होता है. Thirdly, आपकी digital payments in its eventuality जो है वह एक, चीज़ बनना शुरू हो जाती है. And then fourthly and most importantly, real time data gathering जो आपको होती है, उससे आपकी बहुत ज़्यादा optimization होती है. But I feel like कि that's not something that's a priority. Why is that not a priority for a lot of these players?
I think it's it's definitely a priority, but it's a very complicated problem, and you need to find the simplest solution to it. Right. Right? So if you look at chain stores, warranted, they have ERPs. ठीक है. And उन ERPs को चलाने के लिए, implementation के लिए they pay millions of dollars. Right. फिर trainings के अंदर they six months, twelve months का period और उसके बाद आकर उसके अंदर एक team hire होती जिसका MIS team बोलती है. Right. वह MIS team आकर वह systems चलाती है. Because there's lot of stuff happening there. आपके पास SKUs जो होते हैं वह बहुत ज़्यादा होते हैं. SKUs की moment बहुत ज़्यादा हो रही होती है और फिर उसको उसका track रखना, उसके अंदर plus minus, error handling, all of that becomes very very complicated. So, think यहां पर जो innovation चाहिए, वही चाहिए कि system ऐसा कौन सा Shop के case के अंदर it's typically 2% shop. Right. और वह दो भाई होते हैं या बाप बेटा होता और वह shiftओं पर चल रहे होते हैं. हां. So यहां पर जो technology है, वह technology बहुत different चाहिए. ठीक है. आपने वह figure out और utopia I think you want है. यहां पर utopia गया. Utopia यह है कि अभी इस वक़्त अगर मकसूद भाई की shoppers में पांच सौ SKUs पड़े हुए, आप लोग कितने provide कर रहे हैं? देखिए, अब depend करते हम हमारे पास जो total portfolio of SKUs हैं, वह हज़ार से पंद्रह सौ होते हैं. ठीक है. But अगर आप एक specific मकसूद भाई की बात करेंगे, तो शायद हम उनकी दुकान का 4050% portfolio cover करते हों. Is there any that that where you're covering 100% of the portfolio? It's it's very, it's it's less likely because there are 40 to 50,000 SKUs in the market. Ok. We are covering 1,500. So अगर probabilities देखेंगे तो शायद कोई भी ऐसी दुकान ना हो जहां पर हम 100% cover कर रहे हैं. You think it's, it's eventually possible that you'll be doing 100%? I think it's eventually possible that we we cover 95%. 95 से 99 के दरमियान में आप cover करें. जी. Long tail है because देखिए आपके जो bottom के जो excuse होते हैं, bottom के excuse कि number बहुत ज़्यादा बड़ा होता है, उनका throughput बहुत कम होता है. ठीक है. तो वहां पर it will be impossible to cover 100%, but the closest you can go, the better it's going to be. ठीक है, because what I understand is,
you know, you talked about and I understand the the the constant updating of the of the products is is is a is a huge problem. I saw I remember that with with Panda Mart as well for example कि when they, initially launched, they launched shops. वह बड़ी requirement थी COVID की वजह से बंद हुआ हुआ था. तो उन्होंने shops खोली हैं. Shops के अंदर वह मस्ला यह था कि restaurant is easy. It's like 10 pieces जो आपने डालने हैं. Retail के अंदर, you know, so many SKUs and उसकी pricing update थोड़ी सी हुई है and nobody is doing that job. They're selling products, right? They're not sitting there and updating things online. And so they eventually said कि भाई एक एक ही shop dark store बनाओ ताकि हम region से बैठकर update करें और पर सिर्फ़ काम चलता रहे. इस case में अगर for example if you are the one who is directly वह utopia कि आपने जो बात की, u utopia or euphoria. Utopia. Utopia. Basically, मकसूत पाई just ends up becoming the guy who just sells. And every time he sells, there is a POS machine with a barcode at the back and he just runs it through. उसने उसी वक़्त update किया, उसने उसी वक़्त उसकी, you know, छोटी सी receipt generate की, उसने customer को दी, payment ली और रख ली अपने पास. Then it's complicated because half of the things are being done on the POS and half of the things are being done individually with other suppliers as well. So so that's where core things will have to do in house. ठीक है. जो business का जो core है, for example, this inventory management piece is core.
Right? If we don't own this piece, we don't have visibility on what to sell, what मकसूद भाई needs. Right. So these two pieces are connected with each other. Financing, we need to know finance करना क्या है, finance कैसे करना है. Finance end में कोई bank कर रहा है, कोई, you know, startup कर रहा है. That's a separate story. But intelligence के कितना finance करना है, कब करना है, किसको करना है, that data भी है. ठीक है. And we are gonna pass on that data bits and pieces to banks and to, you know, these financial partners जो उस site पर they're gonna take care of the financing. Right. So उनकी जो contribution है, that is financing. हमारी contribution है, it's basically financial feasibility and scoring all of that for the retailer. That we are we are gonna do because we have access to the data. They don't know anything about that. A bank doesn't know Maksudbahi. Right. Bank knows us. Right. We know the Maksudbahi. So we are the link between Maksudbahi and that that money that can potentially be deployed to Maksudbahi. Right. What stops you from
eventually just selling products through riders of your own direct to people's homes? End consumer? Yeah.
I mean, that's not that's not the purpose of the company. Right? Our our purpose The only thing to just That's Our our purpose is to enable Maksud भाई. Right. We exist because of Maksud भाई. Right. Right? So end con so So ethos? It's ethos. It's ethos. Most importantly, we want to do that, by the way. Right. We want to sell to end consumer but through मकसूद भाई. We want मकसूद भाई to enable मकसूद भाई that he sells to the end consumer. ठीक है. Instead of someone's doing the direct transaction. मकसूद भाई अगर और हमारा मानना यह है कि long term के अंदर जो economics हैं, अगर मकसूद भाई का जो store है वह online और offline hybrid store है, it's probably going to be more efficient than a dark store. Because then the walk in is also happening. Right. And then in the same locality, पांच minute और दस minute की rate. Because these shops are everywhere. Right. और इस shop के अंदर से अगर वह जो direct delivery to the end consumer हो रही है, that is going to be more efficient. Of course, you if you subsidize, even today, if you don't subsidize, right? Subsidy को हटा दें, मकसूद भाई still more efficient. Right. Setting up a dark zone, वह जो infrastructure आपने build करना है, वह जो rider है, for example, अब average grocery का order जो है, I don't know what, but the numbers are now, but उस time पर it used to be $405,100 rupees. Right. And और India की अगर आप number देखें तो it's $2.50 to 300 rupees. Right. तीन सौ रुपए का आपका order है. हां. और अगर dollar में आप Pakistan में देखेंगे तो dollar का order है. हां. $5 के order के लिए अगर आप डेढ़ dollar logistics cost incur कर रहे हैं, जो average होती है इस model के अंदर. Mhmm. Right? तो आपके जो margins हैं, इतने margins तो है ही नहीं space के अंदर. Mhmm. This is a business of five to 15% margin. ठीक है. You can't put 35% margin. जो एक dedicated driver rider जो है, वह deliver करने में लगा रहे ठीक है. Food पांडा की जो अच्छी बात यह थी, food पांडा gave flexibility to to restaurants. Restaurant को बोला यार अगर आपने अपनी delivery ख़ुद करनी है, आप ख़ुद कर लो. हम margin कम charge करेंगे आपसे. अब restaurant के अंदर आपके जो resources थे, जो waiter था वह delivery rider वन जाता था. Mhmm. अब उसकी जो cost है strip की वह it's not equivalent to the cost जो food पांडा के rider ने incur करनी थी. Mhmm mhmm mhmm. Right? Same can apply with मकसूद भाई. मकसूद भाई का बेटा भी वह delivery कर सकता है.
The one of the potential was a marketplace. Let's say it's not Rode Retailer. Let's say it's XTalo. And so now I'm I'm going on that shop on that place, and now there's a marketplace. So I I go and products are listed, because they're live, right, because they're connected to the Internet. And so I'm I I I look at through those products and I say, okay okay, this is what I want. And basically, वह order करके आ गया सुधाई के पास, and he just basically takes a cycle and and and delivers them. Maybe उसके उनके पास जो है जी, वह within an hour चार orders आए, वह आए और उन्हें एक थैले, चार थैले थैले और उन्हें एक एक करके deliver करते हैं, वापस आकर बैठकर दिए shop. And then you can integrate मकसूद भाई to all these marketplaces that already exist. Right. Who want to, who are doing hyperlocker deliveries. Right. तो अगर UAE के अंदर you have Instacart,
Pakistan के अंदर you you have, you know, करीम जो आपकी shops की deliveries करते हैं. तो आप मक़सूद भाई को उन उन platforms के साथ भी connect कर सकते हैं the moment you have reliable data के मक़सूद भाई की दुकान में पढ़ाकर.
Right right right right right. Makes makes sense, makes sense. How many retailers do you have at this point in time? So
in Pakistan in in so we are in Pakistan, we are only operating in Karachi. Islamabad, we are opening this week. Mhmm. Or in Pakistan, we serve around 35,000 retailers, and all of them are based out of Karachi right now. Right. And we are opening twin cities, and our hope is that we're gonna Why not Lahore, though? So, Islambad Twin Cities was there there were a couple of reasons. We picked, you know, Twin Cities. A, less competition here. Right. Lahore is a very competitive space right now, and we want to go to Lahore, by the way. Don't get me wrong. We want to open Lahore next couple of months. We want to come to Islamabad first because we want to do a couple of pilots, in the suburbs of of the Twin Cities. Right. So we are opening Islamabad and Pindi right now, but we are also looking at, you know, places like Haribur,
Ektababad. Interesting. So Right? And we want to District level पर आप देख हैं पूरा. District level पर देख रहे हैं. We want to, you know, run pilots
in those far away, you know, जो दोल two hours, three hours की drive पर areas हैं. That will be very interesting because वहां की supply chain बहुत गंदी है. Exactly.
क्योंकि वह वह दूर दूर सी चीज़ें आ रही होती हैं तो it's very unoptimized and there's a lot of space to actually,
cut down on the margin and stuff. Absolutely. So so just to give you an example, Pepsi की bottle आपके इस्लामवाज़ browler पिंडी जैसे शहर के metro या hyperstar के अंदर अगर अस्सी रुपए liter है, so आपके बाहर दुकान में मकसूद भाई वह 90 rupees की बेच रहे होते हैं. हां. अगर आप, you know, if you go to place like हरीपुर, it's gonna MRP is 100 by the way. वह 100 MRP पर बिकेगी. हां. और अगर आप हरीपुर के साथ जो सबब में छोटे गांव में देहात आते हैं, वहां पर वह 110 to 120 की बिक्री होगी. So जितना आप metro cities से दूर जाते हैं, आपकी जो supply chain क्योंकि optimize नहीं है, आपकी जो prices हैं वह भी inflate करना शुरू करें. Right. Because वहां से एक बंदे को छोटी सी दुकान के लिए जिसकी sale दिन की यह दो हज़ार तीन हज़ार रुपए की sale है. हां. वह goods procure करने के लिए उसको पेड़नी आना पड़ता है. Right.
So that hassle, that cost, it eats up the margin. और वह चार different लोग हैं तो चारों चार trips लगा रहे हैं. बजाज के एक बंदा एक trip लगाए और चारों को service कर दिया है. बिल्कुल ऐसी है. Of course, they're they're competing with each other also. Yeah yeah yeah. Makes a lot of sense. Sir, we're at the one hour thirty minute park, and I don't know if anybody's still there, but I know that this is a space that people are now increasingly interested in. Thank you so much for for this extremely insightful session. मैंने आपको बहुत तंग किए क्योंकि मेरी यह बहुत, you know, multiple conversations हो चुकी थी तो मैंने फिर इस बार थोड़ा सोचा कि आपको मैं दाराना poke करता हूं just to see के, किस तरफ़ जा रहे It helped me understand a lot more. So so I apologize for that poking, I I I thank you for all the insight that you've shared. You know, that's that's pretty much from from my side in terms of questions.
Thank you for taking the time out. Thanks a lot.
No problem. If you guys, YouTube वाले like, covering the banking engagement, but एक ही ज़्यादा में हमारी conversation पहुंचेगी. Pakistan now के ऊपर we've started a new podcast called the Pakistan pivot where we talk to a lot of, you know, government officials, policymakers and and and, you know, some of the most pressing current affairs and regional politics and austerhakic conversations. So you can check that out. हम link यहां पर या नीचे description में भी दिया हुआ होगा. इसी के साथ साथ आपको क्या लगता है कि, you know, what what, नौकरी has just described as the future of retail, with with मकसूद भाई. What do you think? Is that, something that you envision happening in the future? Do you agree with him? Do you disagree with him? Whatever it is, let us know in the comment section below. Easy प्यासा Jazzcast यहां पर कहीं पर आ रहा होगा. You can support the channel if you'd like. We accept anything from one repeat to as much as you'd like. It's the thought that counts. Facebook वाले नीचे दी गई हुई. दिन के ऊपर click करके TBD community join कर सकते हैं जहां पर हम different feedback भी लेते हैं, आपकी, guest recommendations भी लेते हैं और different articles वग़ैरह share करते हैं so you can join our community. But anyways, this was सईर मज़हबेदा संजय दी. You were watching Thought Behind Things. Thank you so much for watching and I'll see you in the next one.
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