Home ›› 20 Nov 2022 ›› Business Connect
A good job was surely waiting for Habibul Mostafa Arman when he completed his post-graduation degree with flying colours from Dhaka University’s Institute of Business Administration (IBA). But he wanted to do something innovative and meaningful instead of going to a nine-to-five job as a business graduate.
He used to discuss different business ideas with Md Tauhidul Islam, his friend through school, college and university, when they were students at DU. By the time they graduated, the two friends had managed to secure an investment of Tk around 2 lakh.
It was a time when the issue of food adulteration and formalin were common buzzwords in the media. The duo deeply felt the long-run effect of consuming adulterated food due to the lack of pure or safe food in the market.
After much consideration, they decided to enter the food business with safe food products and bring a solution to food adulteration.
At the very beginning, in 2015, they opened a Facebook page named Khaas Food and started with selling dry fish, honey, mustard oil and seasonal fruits. They brought the products from remote areas of the country and delivered them to the doors of consumers.
Initially, they supplied the products to friends, relatives or acquaintances. With quality products and their consumer-friendly service, Khaas Food soon started growing a small but faithful customer base.
Very soon, they started becoming more popular across the country when customers raved and boosted Khaas Food’s marketing through positive reviews on social media. As consumers continued encouraging people to buy Khaas Food’s products, the customer base grew significantly.
Currently, Khaas Food sells more than 140 products. They receive around 600-700 orders every day. Now, with the investment standing at several lakhs of taka, the e-commerce platform currently has 10 warehouses cum outlets in Dhaka city alone. They have also five other branches in Chittagong, Sylhet and Cumilla.
When they started, the entrepreneurs had to wait for an order but now it’s become tough to keep up with the orders. They have their own delivery system but they also need the help of other delivery platforms from time to time to handle the rising number of orders.
With his dream becoming a reality, now Arman aims is to make Khaas Food a top brand for safe and pure food in the country. By 2025, he wants to cover all major districts with at least one outlet in each of them.
Source of inspiration
Academically, both Arman and Tauhidul came from business background. The academic lessons and the success stories of many of the country’s famous entrepreneurs had positively influenced their decision to get into this business as entrepreneurs.
Besides, the fact that they are both from Chattogram, which is known for being a major business hub of the country, also played a role in strengthening their business mindset.
“I was in ninth grade when I read about entrepreneurship in a textbook, where I learned about the successful stories of the country’s entrepreneurs, including Ranada Prasad Saha and Jahurul Islam. This majorly influenced my decision to become an entrepreneur,” said Arman.
“Also, the natural business mentality that comes from being a Chittagonian helped,” he added with a grin.
“Moreover, when we were students at IBA, we saw that our teachers inspired the students to become entrepreneurs to be self-sufficient while doing something unique and worthwhile.
“At the same time, Tauhid and I were determined to kick-start an innovative business that will provide the solution to a major social problem. All of these things factored in when we decided to start Khaas Food,” said Arman.
Sales boost from reviews
When they came into the business, unsafe food’s hold on the market was big and the major players had either serious political or financial backing.
But Khaas Food, with talent, honesty and passion, slowly started to carve out a portion of the market with their main power — consumer reviews.
Honey was the flagship item and a major contributor of revenue when Khaas Food started. Consumers who were happy this product’s quality promoted it on their own without any incentive and inspired others to buy it from Khaas Food. It was the same for the platform’s other food products as well.
With the customers’ feedbacks playing a vital role behind Khaas Food’s growth, the entrepreneurs were inspired to launch officially as a private company and completed its registration in 2016. At the same time, they also launched the website.
“The consumers’ reviews were the biggest motivator for our growth. By buying our products and inspiring others to do the same, they kind of worked as our brand ambassadors or unpaid volunteers. We are grateful to them,” Arman said.
Lessons learned
At the time, the company’s central warehouse was in Badda. This is when they decided to add perishable items, including vegetable, fish and meat, to their collection and open a physical outlet in a residential tower that area where around 400 families lived, Arman said.
“We thought if we can sell these products to the tower’s residents, it will be more than enough. But it didn’t work out. Since we didn’t use any preservative on the products, the perishable ones lost weight, became discoloured and started going bad very soon,” he said.
“We had started selling perishables in a limited way because there is a huge number of customers. But we failed to earn money through this initiative. On top of it, we incurred a major loss. That’s why Khaas Food now has a strong focus on non-perishable items,” he added.
He continued, “That experience taught us that the perishables business is the riskiest one. It’s also is enough to give a company bad reputation.
“If non-perishable items are not sold today, we’ll be able to sell them tomorrow. But it’s obviously not the same for perishable items. The more time passes, the more unsaleable they become because we don’t use any preservative. However, we waited until developing a robust infrastructure, a strong distribution channel and a loyal customer base. After reaching a standard position we started incorporating perishable items in our product line.”
Creating a positive culture
Talking to The Business Post, Arman said giving less in weight or adding adulterous chemical in food is a common practice in Bangladesh. Product quality is also exaggerated to boost sales when the real scenario is totally different. “That’s why there is a gap between the consumers and sellers.”
“Khaas Food is highly committed to bring a positive change among the consumers and manufactures. We bear zero tolerance against these practices and our marketing is never exaggerated.
“Many sellers do not have the return policy for sold products, even if they are bad. But our customers can return products without any hassle if there is any problem. If you want, you can get your money back or purchase other products,” he said.
Consumers and sellers nowadays consider each other competitors because of malpractices, he said, adding, “We want to bring positivity and create trust in this business.”
All about quality
Khaas Food strictly monitors and controls the quality of the food items it sells. A product’s quality assurance and quality control are ensured in two stages — first at the field level and second after they reach their warehouse, said Arman.
Quality assurance happens at the field level where the products are made or cultivated. At this stage, the main focus is on hygiene or purity.
Khaas Food also has some criteria to ensure quality and the manufactures must follow them. They have developed a standard operating procedure (SOP) with specific guidelines to maintain quality. This happens after the products arrive at the warehouse, he said.
“We have a small lab where our skilled quality control officer and technicians test the products’ quality after they arrive at the mother warehouse. The products are only stored there if they are found safe for human consumption and pass the quality control tests. We return them if they do not pass the tests,” he added.
They also select suppliers after sampling their products and finding out if they are standard. First, a taste test is conducted by consuming the samples. Then, their lab conducts technical tests in line with their SOP and the criteria of Bangladesh Standards and Testing Institution. If the products pass the tests, the supplier gets the greenlight.
Arman said they are working at an advanced level to ensure quality products. “We plan and hope to achieve the global standard in the next one year for our products with good manufacturing practices to establish a better image and make the quality acceptable to the consumers.”
Huge potential
With the economy and people’s purchasing power growing, the demand for safe food is increasing around the country. The consumers want safe food for consumption but there is a lack of such products and companies in the market, Arman said.
He said that like Khaas Food, those selling safe food are small companies operating in a small market but the market can be a whole lot bigger. “If consumers can be made more aware, this small market will see a robust growth very soon.”
According to him, the players are currently contributing only 1-2 per cent of the safe food market and the rest 98 per cent is yet to be explored and invested upon.
“There is a huge opportunity to make this market bigger. The safe food industry has massive potential and can become a big industry. Now, we are unable to reach many customers because our capacity and manpower are small.
“Like us, there are many small safe food platforms. If we work together and get the necessary support from the authorities, more customers will become aware, the sizes of our businesses will get bigger and the market will grow exponentially,” he added.
Aim of becoming a top brand
Sharing Khaas Food’s hopes and dreams, Arman told The Business Post that their ultimate goal is to become a major brand and company for safe foods.
“We have a plan to build a production hub and go for contract farming to make a positive impact on the lives of farmers and ensure fair prices of products,” he said.
Under contract farming, he said, farmers will produce products only for Khaas food. Along with fair price, this will give farmers access to market and finance both.
“At present, farmers don’t always get fair prices. They cannot produce products as expected due to funding shortage and various technical issues. We want to help them by bringing them under contract,” he added.
Meanwhile, Khaas Food plans to cover the whole country by 2025. “We hope to have at least one outlet in each district. So that consumers can enjoy our food items in person at our outlets or have them delivered at their homes by ordering online,” said Arman.
He said they also want to kick off national distribution with flagship items by 2023 so that people can find their products everywhere, including the super shops.
Challenge and recommendations
Arman said the infrastructure is yet to reach satisfactory expansion of the safe food industry. The capacity of both the market and the country needs to improve to ensure safe food items.
“A mentoring body and proper safe food certification have turned the momentum to support the safe food industry,’’ he said. Since it’s an infant industry, a more supporting environment needs to be created to ensure the sustainable expansion of the businesses and the safe food market itself.”
“Consumers are not alert enough about the effects of food adulteration and the importance of safe food for good health. More awareness needs to be created in this regard,” he added.
To the budding entrepreneurs thinking about entering the safe food business, Arman said, “One of the major factors is passion. It’ll depend on how passionate the entrepreneur is. He/she must have a clear vision of what they want to do and achieve.
“They will have to be mentally prepared for a long run marred with obstacles, failures and mistakes. They will only be successful if they can overcome them. They will need to do self-assessment from time to time to evaluate their capacity and adjust when necessary to ensure a sustainable growth.”
