The Chaldal story: They dreamt of serving 30 orders a day. Now they are eyeing one lakh daily orders

Back in 2013-14, when Chaldal dot com was just an experiment that started home delivery of grocery free of delivery charge - there was a man who would order one pack of potato chips worth Tk10 and nothing else. Every day. 

And when this went on for one month straight, the nascent company's co-founder Zia Ashraf decided to call the customer and ask — "what's wrong with you?"

Why did he not just order a dozen potato chips packets that would last a week instead of a day? 

In response, the potato chips customer said, "you are offering free delivery — right? I want to see how long you can deliver my chips for free!"

Zia put down his phone and sighed. 

Zia Ashraf. Illustration: TBS

Chaldal dot com was a new venture then. Nobody was used to ordering groceries online. The 'free-delivery' offer was a marketing strategy. But executing free delivery was a huge hassle. 

The company needed to source the food at the right price and keep them available for quick delivery. There was a man who delivered the items to buyers' doorsteps. 

Orders were very few. If there were more orders than usual, Zia would go out and deliver the groceries himself. They had to build a reputation of being a reliable grocery portal. 

Zia had to swallow the pain of deploying his men to deliver one pack of potato chips every day to that customer for many more weeks. 

Then a surprising thing happened. The potato chip customer suddenly placed an order of Tk10,000 worth of groceries! Zia raised his eyebrows and called him. "Did you just place an order worth Tk10,000?"

"Yes I did," he replied, "you passed my test of free delivery. You earned it."

Back in those days, Chaldal dot com managers would feel lucky if they received a dozen orders a day. But today, through their hard work and a smart policy — the company delivers more than 10,000 orders a day.

How did Chaldal make it to here? Well, it is a story that can potentially inspire every new startup.  

A venture out of a fluke 

In mid-2012, young apparel industry manager Zia Ashraf had to take a break from work for a few months to take his mother abroad for treatment. 

Coming back home in 2013, he was looking for a new job and asked his school friend Waseem Alim for a good reference. 

Graduating in finance from the Wharton School of the University of Pennsylvania, United States, Alim then was working for a financial market technology firm both from Singapore and the US. He was planning to return to his homeland to build something. 

He inspired Zia to think of a business venture instead of going back to the regular 9 to 5 job life. Eventually, Zia took on the job of generating ideas for their new business with full dedication and Alim agreed to pay him a monthly salary. 

Waseem Alim. Illustration: TBS

"Naturally, I thought of a RMG factory at the first instance. But the Rana Plaza collapse in April 2013 made one thing very clear that the apparel industry's compliance standards would become very high and as young entrepreneurs we could not afford it," said Zia Ashraf, Chief Operating Officer and one of the co-founders of Chaldal, the largest online grocery in Bangladesh. 

In an exclusive interview with The Business Standard, he said, the idea of online business struck a chord with him during a restaurant dinner with friends when some young men at the nearby table were discussing taking online orders and delivering T-shirts, perfumes and other items to people's homes. 

"I asked them how they took payments online, as electronic payments were not possible [at the time]. They said they collect cash on delivery (COD)," recalled Zia.  

At night, Waseem too agreed to go ahead with e-commerce, as he already knew that the COD system was already an emerging payment method in India. 

"Now what to sell online? Is it cars, lifestyle items, books, daily needs?" wondered Zia. 

All had their own set of challenges. For example, in the case of cars, the capital needed is too high. 

The biggest challenges were with grocery items, and that was why no global e-commerce player had their own grocery wing then, said Zia, so "we decided to crack the hard nut."  

Then came what should be the name? e-market BD or something like that? Nothing sounded cutting edge. 

Seeing a news headline on grocery price inflation then, the word Chaldal struck a chord with Zia as it represents the entire segment of daily needs of the mass people: Very simple, yet very communicative.  

Now, what about logos? 

Waseem Alim, now the Chief Executive Officer (CEO) of Chaldal, outsourced it to a US firm, for $100 and was presented with 20-30 logos but again, nothing looked cutting edge. 

Waseem proposed they chose an egg as the logo of their online grocery store. Zia accepted the simple logo solution, like his friend accepted his simple name for the business. 

Now onto the website. Tejas Viswanath, a Silicon Valley engineer who was a colleague of Waseem Alim then, partnered with the duo to take best care of Chaldal's technology. 

Tejas Viswanath. Illustration: TBS

Chaldal.com was born in mid-2013, turning Aleem's residential apartment into an office, inside a Gulshan building. They accumulated Tk20 lakh in total capital and a personal vehicle. 

They began campaigning about their first-of-its-kind service in the neighbourhood — Click, and receive your groceries at your door and pay cash. 

Friends were the early adaptors, no doubt. 

The 'backend' struggles 

After settling on the idea for the business, Zia's days started with a study of the wet market. 

When the three partners launched the infant business with zero experience and small capital, Chaldal was receiving 2-3 orders a day. 

Sourcing, order management, delivery, customer service, everything was challenging for them. They knew they had to source from producers to be competitive, but they were too small to go to any producer. 

Receiving the orders online, attending call centre phones, buying the ordered products from the market and delivering those to customers' doorstep, everything was being done by Zia himself.

But they never let any customer learn about the struggle they were going through then. They were trying their best to look like a well-structured firm. 

"No one knew during deliveries or call centre conversations that I, Zia, a co-founder, was speaking to them," Zia said. 

Until the call centre team was built, Zia and Waseem used to take the call centre cellphone home to receive calls even at midnight, on alternate days, while Tejas, the other co-founder and the Chief Technology Officer was and still is working from the United States. 

There were instances when some curious customers asked to visit the Chaldal office and warehouse, but Zia declined their request citing the no in-person visit policy of the e-commerce company. 

The team members were sharing Chaldal updates on their Facebook profiles on a regular basis, which created awareness among friends and they started to try out the service. 

Still, 7-8 orders a day. 

The team dreamt of 30 orders a day.  At one point, it came true. 

Then they needed people for assistance, but hiring people was not an easy task as those called in to be a delivery man prefered working for a traditional shop, while a skilled call centre executive would not leave his stable job in well-known companies to join an uncertain endeavour.

However, the team of three founders eventually hired three men, who still work with Chaldal. Makhdum, who began as a delivery executive, is looking after Chaldal's biggest accounts now while Moshtaq still works as the man behind maintenance. The founders also hired a driver at the time for the only vehicle they had, and he too still works at Chaldal.  

Later, before taking off, Zia and Alim went for professional marketing agencies' services, but every one of the agencies complained about the egg in the Chaldal logo. 

"We were a little offended and opted out each time," Zia said. They instead hired a team member for graphics, product photography and website updating. 

Now, no one complains about the egg, instead they are curious to know the story behind it. 

In less than a decade Chaldal is a family of 2,800 team members and delivers more than 10,000 orders a day at your doorstep, including fresh produce, fish-meat, packaged consumer goods, or diapers. 

Chaldal's average daily turnover is at Tk1 crore now, while analysts and over 20 of its renowned investors home and abroad see much bigger potential in the startup.  

A firm of principles that sticks to policies  

Unlike a group of failing e-commerce players in the country who embraced a quick shine then faded away, Chaldal preferred organic and steady growth so that sustaining it faces no risk at any point. 

Rejecting any lucrative plan for shortcuts to hyper growth that often include deep discounts, price war, expensive fancy marketing, Chaldal always sticks to one mantra — customer experience. 

Religiously following the mantra is the secret behind its pioneering success in the world of delivering 100% fresh grocery items from a warehouse. 

Prior to Chaldal, no e-commerce in the world did this, as all of them were using nearby store pickup and delivery models. 

"We send everything from the warehouse because it enables our quality checking, alongside pushing us to build the one-hour delivery infrastructure within the city," Zia Ashraf said. 

"The potato chips customer is a mere example of how we were sticking to our policy from day one," said Zia Ashraf who came good on his management background, while Waseem Alim is a Chartered Financial Analyst. 

Another factor Chaldal injected into its DNA is compliance from every aspect. 

"We know e-commerce service is VAT-free in our country, but we used to double check with the officials concerned and experts if any clause for such [a model] remained unknown to us," said Zia. 

Right now, the firm is facing a difficulty for a silly non-compliance — its riders have to use modified two wheelers, which is prohibited by law. 

"No company here builds or sells bikes with built-in goods carriers, we have to get existing bikes modified. 

We repeatedly went for approval of the delivery bikes from authorities but are yet to get any as someone had filed a writ petition against unauthorised modification after a carelessly added box fell apart from a running motorcycle and the vehicle tailing it on the road suffered a needless accident. 

We need a solution, authorities should either allow us to add carriers on delivery bikes or change the law. We are ready to follow every specification if directed,"  Zia said.   

The takeoff  

Until 2015, Zia personally went to source products, before Chaldal entered its next level. Yet, maintaining product quality is paramount for them and customers who tried the service  have mostly been retained due to the convenience and quality that Chaldal offers. 

"Nowadays, many of our customers don't even know where the wet market is, near his/her residence in the capital. Many of our investors and policymakers use our online services regularly, and we have them as satisfied customers, without actually knowing who they are," said Zia.  

Once dependent on buying products from retailers and wholesalers, the online grocery shop started to procure many products from producers or manufacturers. 

There had been no commission for the online retailer when they used to buy one or two pieces initially. However, they began enjoying some commission when the number increased and finally when Chaldal procured in bulk, brands and large suppliers entered into special deals with them. 

Chaldal also does not procure from just any source out there, they look for BSTI certification, product standard, and of course, a decent retailer commission. 

The business of no gross profit once, began making gross profits (which is the difference between the buying and selling price). 

"Chaldal never sells any product lower than its purchase rate," said Zia. 

But its costs to keep services seamless, and requires continuous investment to stay at the top and grow to its full potential. That is why, Chaldal still does not make net profits. 

Chaldal's inventory, order routing, and delivery - everything is software-driven. 

Most importantly, it has built a network of smart warehouses within the seven cities it has already reached in the country. 

Several big name institutional investors are backing Chaldal, including local firm IDLC, Mir Telecom, and foreign investors like the International Finance Corporation, Y combinator, Xploration Capital, alongside individuals like Fintech entrepreneur Taavet Hinrikus, who co-founded Wise. 

The startup is also diversifying its area through acquiring other relevant startups, such as homemade food delivery platform Cookups, online drug store BanglaMeds, alongside building its own subsidiary Chaldal Payments Ltd that recently obtained the central bank nod to launch e-wallet services. 

Each branch is helping Chaldal build a strong internal ecosystem. 

The 30 orders a day dreamers, now eye Tk1 lakh orders a day.