The Apon Story: Financial inclusion through Grocery and Credit Innovations
Saif, Sarfaraz, and Husein discuss Apon from 3 different perspectives
In our recent webinar with Saif Rashid (CEO of Apon Bazaar), Sarfaraz Ali (Chairman of Apon Bazaar & CEO of Khulshi Mart), and Husein Merchant (Investment Officer - South Asia at Village Capital), they discussed topics ranging from the inception of Apon Bazaar, their values, their approach to doing business, and their trajectory going forward.
The session kicked off with Saif shedding light on the early days of Apon and how it sought to create value for RMG factory workers and help them achieve a higher standard of living.
We learned about:
How Apon came into being, and what pain points they sought to solve
What the early days of Apon were like and how they evolved over time
What encouraged Sarafaraz to become one of the early investors in Apon
How Village Capital, another one of Apon’s early investors, values Apon and why they decided to invest in it
📺 Watch the episode on YouTube
💼 Actionable Insights
If you only have a few minutes to spare, here's a summary of our key takeaways and highlights:
Saif Rashid: Apon started in 2017 aiming to support RMG workers by reducing their cost of living, thereby improving their standard of living. We started with a single grocery store inside an RMG factory where workers could buy daily necessities at a convenient and cheap price. The idea was that, by having access to food and non-food groceries which is more than 40% of the expenses that RMG workers spend, we could improve their livelihood. However, over the years we have branched out into other domains like financial inclusion, gender issues, nutrition - all through impact or a business model. We are a commercially driven business looking into impact and sustainability at the same time. We started with our core focus on empowering RMG workers and we never deviated from that core focus. But, our business model has evolved and now we’re scaling.
Saif Rashid: Back in 2016, we reached out to an 800-worker factory to let us open up a shop there which they graciously agreed to. Unfortunately, they did not let us continue there for long as they did not believe that Apon could be impactful for the workers. After that, I spoke to over 30 different factories over 10 months before got the chance to set up shop in Islam Group’s factory. We never had to look back after that as we got some of the largest factories, one after another, to agree to let us open Apon locations there. However the biggest challenge was working capital as, with every branch that we opened, we had to inject capital for purchasing inventory.
Saif Rashid: Whenever we open up an Apon location in a factory, there is tremendous demand from workers. However the primary obstacle is being permitted to open up a branch in the first place. Nowadays we screen the factories that we reach out to as there is a broad diversity of mindsets among management; we are also expanding to other industries such as leather and packaging factories on top of RMG factories.
Sarfaraz Ali: Coming from a background in retail, I immediately saw the value in Apon. Retail stores sought to bring a degree of standardization and accountability for customers but they were primarily catered toward the rich and affluent urban class. Apon made this accessible to the working class. Moreover, Saif bhai has a lot of prior experience working in the development sector, and working with underprivileged people. As a result he understood the target customers very well .
Sarfaraz Ali: Keeping in mind that many other factories are manufacturing a multitude of different products out there, there is tremendous potential for growth. When I first joined forces with Saif bhai 3-4 years ago, we were primarily focused on product sourcing, distribution, etc. But now we are more of a FinTech company than a grocery store; we have an app that workers can use to order online, we do not even require an actual physical store so we are also making inroads into factories that do not have the space for us to set up stores in such as factories based in multi-level buildings.
Husein Merchant: In terms of the due diligence that Village Capital did, we were reaching out to companies that were at a very specific stage and we did an initial filtering based on the business models of the companies that we had reached out to. In the later stages, we had lengthy discussions and visited the companies in person. Other key indicators were the impact that they had and the ability to absorb the capital that we would be providing to them.
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