Breaking Pakistan's consumer habits: MAGNiTT interviews GrocerApp Co-Founder, Ahmad Saeed
GrocerApp a Pakistan-based online grocery delivery startup, recently secured a $1M Seed investment round, led by Dubai-based Jabbar Internet Group. Following the companies funding news, we took the opportunity to speak with GrocerApp's CEO and Co-Founder, Ahmad Saeed to explore the startup further. Ahmad shared how the startup has handled user behaviour changes in Pakistan, the most transformative aspects of the country's Foodtech industry, his plans for the future, and much more.
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How does GrocerApp work?
GrocerApp is a simple mobile application, designed very similar to an offline supermarket with categories such as personal care, oil, pet care, and so on. Customer can fill up their cart and place an order in a 3-step simple process. Once we receive the order, we have dedicated fulfillment centers in each city we operate in. Our pickers get the order, they pack it, QA it, and then handover to logistics who deliver to the consumers doorstep. This is all done using extremely sophisticated technology. From receiving the order to handing it to pickers, who have dedicated applications, to warehouse management software to logistics solution – technology is the backbone which has helped us to scale fast.
What were you looking for from your investors, beyond capital?
We managed to find the best set of investors in MENAP (Pakistan) – they have huge experience in tech startups, especially e-commerce. Souq and InstaShop are the 2 most successful tech startup stories of this region and finding investors who had invested in both is simply amazing. Strategic investors can help you scale, setup right teams, setup right KPI’s, provide clarity on what to chase, and more importantly, what not chase - these are some of the skills/knowledge that you won't find anywhere else.
How did the current climate affect the app's usage? Did you see an uptake in consumers/demand?
Yes, I believe COVID-19 has significantly increased the demand. It’s a complete mind shift – breaking consumer habits of buying offline to online (especially in countries like Pakistan where being online is at the infant stage). At the start of COVID-19, we saw a 100% increase in orders and revenue for almost 2 months, but as soon the pandemic went into a decline, the percentage of growth has also decreased but we are still are growing at around 20% MoM.
Have you faced any challenges with user behaviour in Pakistan? E.g. do people struggle to trust in a digital shopping platform? And how have you overcome this?
Trust is the biggest factor in any part of the world for e-commerce companies and there are multiple ways we are approaching it. One is that we offer consumers to check their groceries at the doorstep at the time of delivery. Customers can view the quality and quantity of products before paying the bill, which gives them some comfort and also replicates the offline experience of checking items prior to purchasing.
We offer free returns if notified within 24 hours of the delivery. This has helped raise the trust level between us and the consumer.
We also have a very good AppStore/PlayStore and Facebook ratings of all-around 4.5 or above with 6-7000 reviews overall, which is another thumbs up for consumers.
What do you foresee as the largest challenges to scaling GrocerApp beyond Pakistan?
For now we are extremely focused on Pakistan and are not thinking about scaling beyond that for now. Pakistan is the 5th largest country in terms of population with a retail market size of $150B. The Grocery Retail market is around $60B, so we are focused to win this market in the next 5 years and are developing technology and operations in a way that can help us scale in Pakistan very fast and in a cost-effective manner.
What do you believe are some of the most exciting/transformative things happening in the Pakistan foodtech scene right now?
I have been witnessing distribution networks of brands who had not adopted technology for years, now move towards a tech-driven approach in their business - from auto order punching to auto refilling, and so on. This has been helping retailers a lot. I think that the more efficient and smart distribution network we have, the more beneficial it will be for retailers like us.
It’s safe to assume that after this round, you're going to have some exciting growth plans. Can you share some of GrocerApp’s short-term plans for expansion with us?
We have already scaled to 2 new markets in Pakistan - Islamabad and Rawalpindi (twin cities) who have a combined population of around 5 million. We have also scaled our operations, category, technology, and growth team – we have made a lot of investments in human resources and expanding our teams.
We will also be prioritising building our supply chains even further, increasing the size of our fulfillment, and setting up multiple centers within each city. This will enable us to deliver far more orders at a larger scale.
GrocerApp aims to transform the shopping experience. What is your big-picture vision for the future of GrocerApp?
We want to be the largest retailer in Pakistan in 10 years time (online or offline).
What advice would you give to yourself five years ago?
I think the best advice I ever read was from Travis Kalanick - "Fear is the disease and hustle is the antidote". You fear that your startup may not work, what if you don’t get investment, what if a bigger competitor comes in? Hustle is the answer to all, work twice as hard! Make sure you have read each blog, each book, and presentation on raising investment, you have reached out to every single investor of Pakistan (even the ones outside of Pakistan), and you have attended every event even if there is a 1% chance of meeting a potential investor. Don’t give up!
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Pakistani startups saw $18M invested in H1 2020, with the overall number of deals increasing by 13% to 17 deals from H1 2019, illustrating the potential of Pakistan to become the next big South Asian entrepreneurial hotspot. Discover more trends in our H1 2020 Pakistan Venture Investment Report.