DigiTong

1. The micro-retailers (tea stalls, rural mom-and-pop stores) of Bangladesh are falling behind in the race to digitalization and modernization which is currently taking place at an exponential rate. They also lack the proper physical infrastructure to support growth and attract a diverse set of customers.

2. Creating pathways for these micro-retailers for a transition and ultimately transformation into digitalization, also upscaling and standardizing their physical infrastructure at a low-cost. Giving them financial, marketing, and operations consultancy for better business practices.

3. The digital transformation of the micro-retail stores will help them fight, survive and thrive the increasing competition from the big brand offline and online retailers. This will help families and communities from going into complete financial ruins. As the businesses thrive, it will also help in creating newer jobs and business opportunities for the more tech-savvy youths of Bangladesh.

In a fast-paced world, where the process of digitalization has swept across nations and changed the lives of billions of people, the mass population of Bangladesh is severely lagging behind. Whilst, it is a fact that we are one of the fastest growing nations in terms of access to the internet and the usage of smartphone but we are far from accessing and reaping the benefits of it. A lack of digital literacy, among the grassroots, is a big obstacle and this is where DigiTong comes in. DigiTong is working tirelessly, since our inception, to bring the latest easy-to-use technologies into the lives of the micro-retailers.

According to a recent statistics from UNCDF there are 1.3 million micro-retailers, with 50,000 new entrants annually, in Bangladesh. Most of these retailers come from lower-income and lower-middle-income backgrounds and the digital literacy within these groups is almost next to none. During our field research, we found the causes behind this, which are as follows:

• A lack of market awareness.
• A lack of long-term vision and goals.
• Averse to changes in their age old systems. 

All of the factors above contribute towards a lack of motivation in learning new things especially technology.

DigiTong is primarily committed to serve the under-served and under-privileged micro-retailers of Bangladesh who mostly belong to the lower and lower-middle-income classes.

Three months before piloting in July we have been working with the now DigiTong Owners and addressed the various obstacles they were facing in their businesses on daily basis. The discomfort of customers in their outlets, a lack of product diversity, a lack of uniqueness compared to the other stores in the vicinity and a complete lack of digital activity in their businesses, among a plethora of other obstacles, were contributing to inconsistent sales and very little growth and savings.

Since the piloting of DigiTong at three different locations in Dhaka, we are doing our best to minimize these obstacles every single day. Sales, have increased by 15 - 18% across all the outlets, there is a better product diversity and we are working on the field regularly to train and retrain them on the initial iteration of our Point-of-Sales software.

DigiTong is a tech-focused micro-retail startup that aims to create value for micro-retailers by building state-of-the-art prefab kiosks, and digital systems (Point of Sales, Inventory Management etc.) and use data processing and analysis to help these retailers make the right decisions at the right time.  DigiTong's vision is to digitalize the grassroots level retail stores including tea stalls (tongs), rural general stores etc. all across Bangladesh thus contributing towards improved communities and greater inclusion in the Government of Bangladesh's vision for a Digital Bangladesh and help fulfill the government's noble initiative of the ‘গ্রাম হবে শহর (Transforming Villages Into Cities)’ program. 

Since, time unknown local tea stalls (tongs), fuchkawalas (food vendor), and other street vendors have been the hub of local communities to gather and socialize and they have been an integral part of our culture. But their infrastructural and technological development have largely been ignored by the society as a whole and they have been doing their businesses in shabby, unhygienic outlets without any touch of modernity. We shall be upscaling and standardizing the tongs (tea stalls) and food carts, and make them fit for the 21st century.

A standard version of a DigiTong can be seen in the picture above. Below is a more concise version of our solution:

• Implement digital systems (POS, Inventory Management, Accounting Software etc.).
• Functional and aesthetically pleasing outlet.
• Marketing and solid branding for thousands of vendors.
• Improved product range according to market demand backed by data.
• Provide financial, marketing and operational consultancy.

Currently, we have developed our first iteration of our POS software. It is a web-based application with a very user friendly user interface (UI) made with .NET. Our POS is image based and the database is completely in Bangla.

DigiTong is the only platform with a unique combination of easy-to-use technology and modern, ergonomically designed outlets. We have researched and learned from our predecessors who worked in the digitalization process of the micro-retailers and why they failed. Through our research we learned that just pushing the digital systems will have a low adoption rate and ultimately it would be very difficult to grow and scale. Hence, we decided to research on value additions and came up with the idea to bundle our technology with the unique feature of providing our aesthetically pleasing infrastructure and also provide other 21st century services and amenities such as WiFi, surveillance camera, television and device charging ports. 

Having a modern outlet and the extra facilities incentivizes the DigiTong owners to learn and adopt the technology we provide them. On top of that we ensure they do not have any difficulties in using our tech through constant training and retraining and adjusting the user experience (UX) of our software through regular feedback. In fact, we make sure to include it in our terms of service before delivering the outlets that they would be open to using our digital systems.

DigiTong will create a massive impact in the ongoing digital revolution that is currently taking place in Bangladesh. We would also enable the creation of additional sources of revenue for the business owners and directly impact in increase in sales and customer satisfaction.

DigiTong Outlets (Physical Infrastructure): Our beautifully designed outlets will bring a new pace to the stagnant micro-retailers. Since launching at 3 different locations, the sales have gone up by 15 - 18%. Customers seem to enjoy spending more time at our outlet compared to other nearby tea-stalls.

Extra Features: We provide modern services and amenities to empower not only the DigiTong Owners but also the customers that visit our stores. They are treated to an entertainment system through our TV, we provide charging points for their devices, and the WiFi service seems to be the biggest hit, as more people from the grassroots now have access to the world at their fingertips, they engage in all the latest news, trends and also stay connected to their families abroad.

Digital Systems: Our digital system will be able to track sales from anywhere in Bangladesh. We plan to create and curate a massive collection of sales and inventory data. This data will in turn help us provide valuable analytics to micro-retailers and manufacturers alike. Both parties will benefit by knowing what to store and produce (more of) at specific times of the year through our outstanding analytics thus creating a positive impact in the overall economy of the country.

DigiTong is a B2B2C business. One on hand, we primarily support and help the micro-retailers of Bangladesh grow to their maximum potential on the other hand we serve consumers through our outlets. As a result we shall be showing two different numbers in the following segment:

1. Micro-retailers (DigiTong Owners): 3, Consumers: 1,050/Day

We have 3 outlets in Dhaka as of now and each outlet stays open for 14 hours daily on an average. They each serve around 350 customers every day on an average which brings the total number to 1,050 customers per day.

2. Micro-retailers (DigiTong Owners): 200, Consumers: 70,000/Day

With the right investment and strategy, we shall be able to grow to 200 stores at the minimum by next year who will cumulatively serve 70,000 people every single day.

3. Micro-retailers (DigiTong Owners): 14,000, Consumers: 4,900,000/Day

Our projections show that with proper growth strategy we can grow to a minimum of 10,000 stores within the next 5 years who will cumulatively serve 4.9 million people every day. 

DigiTong works to serve the impoverished and under-privileged segments of our society who works in the micro-retail industry. As a commitment to serve the under-served our first 3 DigiTongs are owned by women. 

Bangladesh has an almost 50-50 gender split among her population. Unfortunately, women are still neglected when it comes to various job and entrepreneurship opportunities. At DigiTong, we want to do our part to involve and even prioritize women entrepreneurs and create a new sector of financial and social inclusion for women. Within the next year we plan to establish 200 DigiTongs and we would do our level best to partner up with at least 100 women micro-retailers. According to research from various sources, women-owned businesses can make a key contribution to household incomes and economic growth, as women generally invest a higher proportion of their earnings in their families and communities than men. The social benefits of women’s involvement in economic activity are also immense: women who become entrepreneurs in Bangladesh were found likely to have fewer children than the national average, indicating they are more aware and open to family planning.

In the next 5 years, out of our target 14,000 outlets, we would work to achieve the following split among our DigiTong owners:

5% People of the third gender

10% People with disability

35% Women

50% Men (Including unemployed youth, the elderly)

Our problems specifically for the next year is mostly financial but overall the problems for the next five years might remain more or less the same unless something drastic happens or we, at DigiTong, make an immense positive impact in the grassroots through the next couple of years that things are bound to change.

Financial: To grow to the number of outlets we are projecting DigiTong needs to raise quite large figures of investment for at least 3 rounds of funding in the next 5 years. Big rounds of funding starting at Series B still remains elusive in Bangladesh as the investment into tech startup scene is still very nascent.

Legal: A lot of micro-retailers rent spaces from landowners who do not follow the law of the land in leasing out their spaces. The business owners seem to be at the mercy of these landowners because they hold the power to ask them to move their businesses with very short notices. This would put our DigiTong owners in jeopardy as sometimes the successes of their businesses largely depend on the location and the support from the local community.

Cultural: As the grassroots people of Bangladesh has virtually almost no digital literacy, we expect a lot of DigiTong owners to be averse to changes and not implement the technology we provide at their businesses properly or to the maximum extent. 

Financial: For us to grow to 14,000 outlets in the next 5 years we have figured out a few schemes that is guaranteed to give us great results if executed properly. Instead of completely relying on investments we are building sponsorship packages for organizations and high net-worth individuals to fund micro-retailers for a DigiTong ownership. We are also in talks with a few banks to create a micro-financing product specifically designed to cater to DigiTong. We are also testing out down-payment and installment schemes for entrepreneurs who are willing to be a part of the DigiTong family. Lastly, we shall seek to grow our investor and mentor network beyond Bangladesh and connect with major investors from across the world and try to raise money from global players.

Legal: DigiTong would work with the landowners to help them understand the value of having a DigiTong at their respective communities and ensure our DigiTong owners get into legal contracts of tenancy and work out win-win deals for all parties involved.

Cultural: The only way to overcome this barrier is by keeping open communications with DigiTong owners, show them the benefits of implementing digitalization into their businesses, and constant training and retraining. Once we are able to show them tangible outcomes of implementing our tech the majority of our obstacles will be gone. 

Currently, we are a team of three people including two Co-founders and an Operations Executive. All of us work full-time for our startup.

All the members of our team have first hand experience of previously working on the field along with the masses. One of our co-founders, Navil Mostafa, was the co-founder and CEO of the first motorcycle ridesharing startup of Bangladesh, AmarBike and our current Operations Executive has previously worked with him at AmarBike. The team has acquired vast knowledge on how to run a startup working with the masses, experienced in dealing with customer complaints, customer service, customer retention, training the masses on how to use our tech among many other things. We have also learned how to build scalable tech for the masses. Most importantly, through the failure of AmarBike, we have learned that our operations and growth strategy should run hand-in-hand i.e. find product market fit quickly, build a great product and scale fast. 

Our other co-founder, Nikson Amin, has previously run a franchise of a big brand home apparels company in his local Upazila. Through that experience he has learned to deal with vendors, suppliers, and clients. He gained a massive amount of knowledge on procurement and inventory management.

And lastly, the idea and feasibility of DigiTong has been researched and tested to the point where we were comfortable to pilot the product in different communities across Dhaka. We have researched about similar startups abroad and how they scaled and became sustainable. All of these factors combined makes us the best team to deliver this solution.

Since we are working in the retail sector, DigiTong has great partnership opportunities with the FMCG companies. Currently, we are in talks with a few companies who are willing to place their products at our stores among them are two coffee companies with whom we are trying to figure out on how best to utilize their products and their coffee machines at our stores. 

Additionally, DigiTong has kept space for placing printed advertisements on our store and we are also willing to put advertisements on the TV we provide. A few digital marketing agencies have shown interest to pilot a project with us and find out how we can price it and then scale it. 

We are also in talks with a few fintech companies and currently, trying to find out how we can integrate our tech and implement their services through our stores.

In the images below you shall be able to find out our value propositions and our business model canvas respectively:

Currently, we are actively seeking direct-equity investments to grow our startup and build at least 15 more DigiTongs by the end of 2019. Additionally, we are also seeking sponsorship from various organizations or high net worth individuals who are willing to participate in helping out one or multiple micro-retailers. We have secured two verbal commitments from renowned companies for a sponsorship deal where they would be able to fund to micro-retailers convert their businesses into DigiTongs. 

Since DigiTong is a for-profit organization our ultimate goal is to grow with investments and sponsorship, and start generating revenue. Once we move past piloting and launch the full-version of our product we will be able to establish multiple sources of revenue. They are given in the following image:

Further down the line, once we generate enough sales and inventory data, we would be working with big data anal and supply chain automation process.

Tiger IT is one of the biggest names in our tech industry and we believe associating ourselves with an organization like Tiger IT will give us multifaceted benefits. DigiTong has many obstacles ahead of us and applying to the Tiger Challenge and winning it will take us a few steps further in our journey. 

A partnership between Tiger IT Foundation, Solve and DigiTong shall help us bring in the changes that we want to see in our society quicker. Getting selected shall also help us connect with the right investors, sponsors, get media attention and definitely connect with mentors too. 

Since DigiTong is a social venture, first of all, we would love to partner up with like-minded individuals and organizations who seek to help out people and families become DigiTong owners through sponsorship deals. We would also like to partner up with FMCG companies like Unilever, Pran etc. to create a diverse set of product portfolio and also various tech infrastructure service providers to help us fit our kiosks with modern services and amenities. Meeting and connecting with VCs is also one of our goals as we would like to raise our seed round as soon as possible.