Merchant Bay

Abrar Hossain Sayem
Co-founder and CEO
Merchant Bay

Interviewed by
Ackhlaqur Rahman Sachee

Merchant Bay is a tech-enabled fashion sourcing platform. It provides a critical channel for buyers to explore suppliers to source apparel from Bangladesh. Its multisided platform enables both buyers and suppliers to start doing business fast, manage orders with efficiency, and grow together simultaneously. Team MBR was in a conversation with Abrar Hossain Sayem, Co-founder and CEO, Merchant Bay, to learn about their inspirations and vision behind Merchant Bay. 

Akhlaqur Rahman Sachee: Merchant Bay, which started in 2020, provides a digital platform to connect the buyers in the RMG industry with the RMG manufacturers and the suppliers of textiles, yarns, trims, and accessories. Alongside, it provides business intelligence tools for RMG factories. What is the story behind this idea?

Abrar Hossain Sayem: The vision of Merchant Bay is to ultimately create a seamless, visible supply chain of local fashion manufacturers and raw materials so that global brands and designers can have fast, reliable access to the pool of manufacturers and raw materials while developing new products. In this way, local manufacturers in Bangladesh can scale with greater demand as they have access to many buyers and have an order management system to efficiently manage the orders. Our mission is to streamline fashion sourcing experiences digitally.

Akhlaqur Rahman Sachee: Our RMG industry is highly dependent on conventional buying houses. What are the motivations for the buyers to pick Merchant Bay over conventional buying houses?

Abrar Hossain Sayem: We are not substituting buying houses. Our industry-specific system is built in a way so that anyone involved in RMG production can enjoy benefits from it. Buying houses can be a part of our order management system by efficiently managing their orders while sourcing raw materials from a wider range of alternatives. The motivation for buyers to work with Merchant Bay is the tech-enabled visibility they have in sourcing, designing, and product development processes. With Merchant Bay, they are able to source a wider range of developed products and track orders better from remote locations.

Akhlaqur Rahman Sachee: Inefficiencies have been observed in some areas of the RMG industry since its inception. How is Merchant Bay addressing this issue? What are the benefits the RMG factories are enjoying that have implemented Merchant Bay’s business intelligence tools?

Abrar Hossain Sayem: The industry currently has inefficiencies in almost every step as the majority of the industry is not data-driven. The M Factory app is the order management and BI tool which helps manufacturers to have all their key stakeholders in one place, keep track of all action plans and monitor key metrics of the factory, which can be entered into the app in very easy ways. The M Factory app gives visibility to the efficiency loss. It also gives real-time insight about room to grow in processes involved in production. Automatically generated shareable reports give time back to the executives so that they can focus on what really matters. This way, factories can increase operational efficiency by at least 20%, as found in a Merchant Bay primary study.

Akhlaqur Rahman Sachee: Would you kindly share with us the screening process through which Merchant Bay onboards the suppliers? How does Merchant Bay assure the buyers of the quality of the products?

Abrar Hossain Sayem: Merchant Bay onboards suppliers by checking their updated business licence and manufacturing unit. Using our profile builder, every manufacturer can build and update their profile information, but it only gets online after all the verification process is done. Merchant Bay checks all the information through a physical visit. Merchant Bay assigns an account manager to buyers placing orders through Merchant Bay for the purpose of assuring the standard operating process and making sure data are being updated. The factory taking the order stays responsible for maintaining quality standards set by the buyer. However, buyers can assign Merchant Bay or a third-party quality team to do inspections on their behalf.

Akhlaqur Rahman Sachee: Merchant Bay has recently partnered up with Dana Fintech. How is this partnership going to help the businesses in the RMG industry?

Abrar Hossain Sayem: The partnership with Dana Fintech will allow our registered manufacturers to easily take Dana Fintech’s services. Dana will help Merchant Bay suppliers to build their business credit score based on different data points. SME RMGs will be able to avail digital SME loans for working capital finance from Dana lending partners based on business credit score. This way SME factories can largely benefit from the partnership. Our verified suppliers are able to access all the services from a single dashboard without even going to another website.

Akhlaqur Rahman Sachee: Order quantity is a crucial factor that is seriously taken into consideration by the RMG manufacturers while confirming the orders. How is Merchant Bay helping buyers look for suppliers to order a small quantity of products?

 Abrar Hossain Sayem: Merchant Bay is onboarding and assisting SME manufacturers to have stronger product development support and access them to receive direct orders from brands instead of depending majorly on subcontract orders. This way, this large pool of SME manufacturers can have better profitability while catering to low MOQ orders from brands. They are provided with the necessary tools and stronger IE planning to execute the low MOQ orders. Merchant Bay’s product development expertise and M Factory-based monitoring and evaluation system make them comfortable managing small orders efficiently and at scale.

Akhlaqur Rahman Sachee: Would you kindly share with us the revenue streams of Merchant Bay? How does it make money out of the services it provides?

 Abrar Hossain Sayem: Merchant Bay earns from subscriptions and commissions on a usage basis. Manufacturers pay for using the M Factory app. Buyers pay a subscription fee for product development support. Buyers currently pay commission on total value when they engage Merchant Bay in sourcing and managing orders with extended service. On the way forward, we are creating an intuitive platform to accommodate all stakeholders to use the platform as a service under a subscription model.

Akhlaqur Rahman Sachee: What are the challenges Merchant Bay is currently facing? How is it planned to overcome them?

Abrar Hossain Sayem: The current challenge is motivating the manufacturers to actively use the order management system to increase internal efficiency and collaborate with buyers. On the other hand, another challenge is to motivate manufacturers to actively develop products as per their capabilities, which can be promoted to generate demand. Merchant Bay, therefore, is investing in its product development studio to give buyers the initial product development support and create collections, collaborating with manufacturers to generate more demand. To make our tools more functional and intuitive, we are bringing everything into one mobile app. This will further reduce the time and increase operational efficiency.