Woodpecker: Carving out a business from a leap of faith
Today Woodpecker is one of the largest F-commerce platforms in Bangladesh with 353,903 followers and an astounding user rating of 4.9. Moreover, the business recently reported Tk2.1 crore in yearly revenue and a 15.7 percent profit margin.
In November 2014, Nasir Uddin was only 15 days into his new, well-paying job at the Phillip Morris International, having switched from BMB Mott Mcdonalds, when he decided to quit.
Meanwhile, his partner Shah Abidur Rahman, a graphic designer by training, turned down an offer to switch to the Daily Star from Dhaka Tribune.
Both of them had decided they dedicate their entire time and energy to Woodpecker, an online store for wood souvenirs they had launched the year earlier.
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"When we launched Woodpecker, both of us were working. We initially maintained Woodpecker as a side-business - something we would do in our spare time. As it grew in popularity, we decided to make it our sole focus," said Nasir.
At that time, F-commerce (conducting online business activities on a Facebook page or Facebook application) in Bangladesh was a fairly new idea, unlike the flourishing marketplace we see today. Nasir and Abid took a giant leap of faith in their creation and luckily it worked out for them.
Today Woodpecker is one of the largest F-commerce platforms in Bangladesh with 353,903 followers and an astounding user rating of 4.9. Moreover, the business recently reported Tk2.1 crore in yearly revenue and a 15.7 percent profit margin.
Woodpecker mainly sells customised wooden gift items and souvenirs such as frames, shapes, quotes and key rings, nameplates, gift box, etc.
Although the official Facebook page was launched in February 2014, Woodpecker began its journey in 2013.
How it all started
Nasir and Abid launched Woodpecker at a time when Facebook-based platforms were not mainstream.
"I completed my graduation in 2013 and my partner did so in 2012. Back then we were both in the North South University Debating Club. So, we were in charge of all kinds of publications like magazines, crests, etc. for the club. For that, we had to go to Katabon," Nasir said.
"At the time, there was a demand for customised products with photos of individuals, logos of football clubs, TV series illustrations, Marvel and DC superheroes and so on," he added. And so the duo tapped into that demand.
Nasir and Abid were huge fans of Woody Woodpecker - the famous 90s cartoon character and named their business venture after the cartoon character. In their early business days, they worked with a limited number of employees and used third-party shops for production until June 2015.
"Simply by using third party shops, we were able to save up to Tk5-6 lakh. As our business was growing, we decided to buy our own laser machine in June 2015," said Nasir. Woodpecker also rented office space and hired a couple of designers and carpenters.
"But I also operated the machine myself," Nasir added.
Currently, Woodpecker has a team of 17 employees, 11 of whom work in the office while the others work in the marketing department of Woodpecker.
The trials and tribulations of launching a unique business idea
The volatile nature of the market raised scepticism and doubt among the founders' families. But Nasir argued that he had faith in the unique promise of Woodpecker.
"We believed that we could capture this market if we put in the effort. Our parents urged us to stay at our jobs, but we did not listen and invested further by buying the machine and renting an office," Nasir said.
However, with time, family sentiment towards their business ambition changed, particularly with the rented office space. "My father even invested in Woodpecker so we could get through the initial struggles," he added.
And struggles they did face.
When Woodpecker initially began its journey they had no fixed costs as they mostly dealt their products through third parties. However, office space meant incurring fixed costs, i.e., rent and utility bills, etc; and cost of paid employees.
"We had to make some strategic decisions. We had some celebrity friends and we made some personalised souvenirs for them. When they shared these on their pages, we started to receive an increased number of orders," said Nasir.
To diversify their product line, the business founders also went to China and Thailand to understand the market better.
"We also began pursuing B2B orders from companies for calendars, gifts and other souvenirs. Now, this has become the largest source of our income. By 2016-17, we started having large turnovers and never had to look back," he added.
How the Covid-19 pandemic affected Woodpecker
Much like many other ventures, Woodpecker also had to shut down for four months from March- June 2020. At this time, they had no income or business.
"In those four months, I paid salaries and Eid bonuses to all 17 of our employees. I still had to pay rent for my office. B2B orders from BAT, Banglalink and Islami Bank Ltd. had been cancelled. Our bank balance dwindled and 80% of our capital just vanished. So, we could not wait any longer, but open our business from July," said Nasir.
At the time of reopening, Woodpecker sold at a loss simply to increase the volume until September and started making profits again from December 2020. The Valentine's day rush in 2021 helped the business recover too.
Many other companies had to shut down, sell their office and whatnot. "I was lucky enough to escape all of that," Nasir added.
Nasir claimed that three things distinguished Woodpecker from its peers: its flexibility and responsiveness to its customers' requests, the timely delivery of products and its packaging.
"No matter how many times the customer wanted to change the design of their souvenir, we patiently complied. Most of our peers do not allow this. Since we primarily deal with time-sensitive gift items, we make sure that we deliver the goods on time. And finally, we package our souvenirs with great care. This is why we have a loyal customer base," said Nasir
Was the Bangladeshi SME environment accommodative?
Many entrepreneurs often complain about the sheer lack of credit support or other infrastructures to accommodate new businesses. Nasir agreed.
"Over the past 7 years, I applied twice for loans to the financial institutions in Bangladesh. I received a Tk52 lac order from a large shipping company and I needed the loan. Just because I am from an F-commerce platform, I was declined," he explained.
The second time Nasira applied for a loan from the SME foundation was this year to recover from the pandemic. The application was for a Tk12 lac loan to import some raw materials from China.
However, only 2.5 lac was secured, "which I could have managed on my own anyway," said a rather disappointed Nasir.
Despite having a valuation over Tk1 crore, he only received a very small amount of loan and eventually, he declined.
But there were other problems as well. As Woodpecker was becoming more and more popular, many copycats scammed their customers.
"Once an SP of the Armed Force Battalion ordered an item from one of the copycats. They kept his money and then blocked him. Then he came to our office and we had to prove that we are not the frauds who embezzled his money," added Nasir.
Nasir hoped to get the blue verification sign from Facebook within the next year to avoid similar predicaments in the future
What does the future look like for Woodpecker?
Woodpecker intends to move into the furniture business in the future.
"We currently do not have plans to directly get involved in manufacturing dining tables, beds, sofas or other heavy furniture. But there are many other smaller furniture like shoe racks, kitchen racks and other amenities, customised mirrors, shelves, etc.
We want to make some ready-made items outside the periphery of our typical customised products," Nasir added.
Woodpecker has already sent some samples of these items to countries like Canada and Australia to assess the viability of these products. They are also developing a user-friendly website that would assist users to choose items based on their preferences.
