Shaheen Siam Chief Strategy Officer, ShopUp
Interviewed by Raiyan Rabbani
Mr. Shaheen Siam is one of the founding members and current Chief Strategy Officer at Shopup, Bangladesh’s leading full-stack B2B platform for MEMEs, and has built businesses in logistics (REDX) and e-commerce (Mokam). He has 13+ years of experience in building and scaling startups in Bangladesh and has raised USD 200M+ in venture capital from renowned investors such as Sequoia, Flourish, Prosus, and Valar. He is regularly working to build and launch products in the Bangladesh ecosystem. He is a graduate of finance from IBA, Dhaka University. Team MBR was in a conversation with Mr. Siam and was fortunate enough to receive his take on the logistics industry in Bangladesh.
Raiyan Rabbani: Conglomerates in Bangladesh increasingly prefer thirdparty logistics over having fleets of their own, which is surely helping the logistics industry grow. What are the perks of thirdparty logistics, and why are conglomerates choosing it over in-house fleet operations?
Shaheen Siam: Investing in your own fleet of logistics takes time, effort, and money. If there are reliable thirdparty logistics service providers, these conglomerates can focus on providing and ensuring service quality while maintaining product and service delivery reliability. In addition, they can save on capital expenditure costs as well as costs relating to the maintenance of delivery vehicles. If you look at old conglomerates, they had to have in-house logistics facilities, but in recent times, they prefer to outsource it to a third party. For logistics service providers like us, for example, we invest in an
asset-like model of leasing vehicles rather than having to heavily increase capital expenditure.
Raiyan Rabbani: As Bangladesh is an importdependent country for raw materials and capital machinery, the economic success of the country largely depends on logistics support. How successful, do you think, is our logistics industry in playing its role in ensuring smooth import operations?
Shaheen Siam: Over the last few years, there have been significant changes to logistics services within our border in terms of importing foreign goods. For this reason, crossborder transactions and facilitation in this industry played and continue to play a vital role in ensuring the smooth flow of imports into the country. Another consideration is multi-nodal transportation, in which logistics are used not only on roads but also on rivers and rails. Over the years, these have developed to facilitate imports for the logistics industry in terms of ensuring smooth import operations.
Raiyan Rabbani: For logistics companies, infrastructure plays a crucial role when it comes to providing uninterrupted service to their clients. Would you please tell us what you think about the way infrastructure is being built in the country right now?
Shaheen Siam: : It’s definitely better than it was a few years ago, but recently, it has grown at an exponential rate with both private sector investments and government projects in infrastructure. Road networks, for example, are more developed than other forms of transport networks. In RedX, for example, we have more capacity to handle much larger quantities in logistics and deliveries. But at the same time, government interventions and plans need to be aligned with the facilitation of logistical services provided by private companies. It has to be ensured that the current momentum of infrastructure development can be continued at the same rate.
Raiyan Rabbani: While providing fullfledged logistics support to their clients, logistics companies often face bottlenecks in multiple steps, which hampers efficiency. What would your suggestions be for overcoming these obstacles?
Shaheen Siam: To ensure optimal use of these multinodal transportation systems, which are currently considered a barrier to the logistics industry, we need to collect more data on other modes of transportation than just roads since rails and riverways are yet to be explored to their full potential. This is due to issues with this form in terms of reliability and the loading and unloading of goods and services. But it can be predicted that soon enough, investments in those modes will increase. For this, the government needs to ensure sufficient improvements in both rail and sea transportation.
Raiyan Rabbani: Railways and waterways can play bigger roles in ensuring smooth transportation in the context of Bangladesh, where they seem quite underutilised. What are the factors, in your opinion, responsible for this scenario? What can be done to ensure optimal utilisation of railways and waterways?
Shaheen Siam: It is a fact that railroads and waterways are both unreliable in terms of effective delivery, and in addition, there are issues relating to the loading and unloading of goods at docks that may hamper the effectiveness. As previously stated, it is too early to suggest strategies for ensuring optimal railway and waterway utilisation. However, because the use of those other modes of transportation is expected to increase in the future, I believe there should be an increase in capacity in the form of capacity planning beginning now.
Raiyan Rabbani: GIM, Truck Lagbe, REDX, and some other logistics support providers of the new generation have managed to stand out in the industry. What is the prospect of such tech-savvy logistics companies in the context of Bangladesh?
Shaheen Siam: The first thing technology did when it was introduced into the industry was match demand with supply and thus bring visibility and control. Technology disrupted the status quo of the prevailing logistics industry. Customers now have full access to the status of their deliveries from sourcing to delivery, thanks to the technology now used in this industry. Everything now, from loading and unloading to lastmile delivery, can be tracked in real-time. Any parcel lost in the process can be found and immediately refunded to customers.
Raiyan Rabbani: The government of Bangladesh is determined to boost exports from some particular sectors, such as active pharmaceutical ingredients, smartphones, and so on. Advanced logistics support is required to make such efforts fruitful. How ready is our logistics industry to support these industries grow their exports?
Shaheen Siam: The industry went through some radical transformations relating to infrastructure development as well as technological advancements. Many businesses have seized this opportunity. As for exports, this poses a challenge in dealing with the increased number of exports at the moment. Despite this, I believe that freight forwarding could be improved to ensure an optimal flow of exports.
Raiyan Rabbani: A well-formulated national logistics policy is a pressing need to reap the full potential of our economy. What are the issues you expect to be addressed when it comes to formulating such policies?
Shaheen Siam: One thing to keep in mind is how different types of logistics companies can better coordinate and cooperate when it comes to logistical services. This especially extends to cross-border companies where there are separate jurisdictions with separate policies. These policies should be harmonised so that Bangladesh can fully realise the benefits of national logistics. Besides this, the government can step in and form a committee to ensure such policies are enforced, taking into account the needs of these various logistics companies.
With a total market value of over 6,000 crores, the ceramics industry in Bangladesh has been one of the country’s fastest-growing manufacturing industries. Thanks to sustained economic growth and increasing urbanisation, the industry meets 85% of domestic demand and has the potential to become the country’s largest export industry in the not-toodistant future. With domestic sales increasing by 20% per year on average, export sales increasing by 26% per year on average in the last three years, and total production capacity increasing by around 200% in the last five years, the industry is poised for future success.
The industry benefits from rising incomes, rapid urbanisation, and duty-free access to some international markets. There is still much to be done to address the problems this industry is facing, such as uninterrupted power and gas supplies, which are essential to continue competing in global markets. If Bangladesh’s ceramics sector can get over the obstacles, it has every chance to develop and increase its contribution to the nation’s foreign exchange earnings. It stands to see what the future holds for this industry.
Md. Shah Jalal
IDLC Finance LimitedDownload View