Portfolio Spotlight: SupplyLine

THE LOWDOWN: WHY ACCELERATING ASIA INVESTED

• Team: The team has the right mix of related skill sets from trade marketing and distribution in the Fast Moving Consumer Goods (FMCG) field, product development, and financial product development.
• Problem: 1.4 million small retailers don't have access to proper financing and an efficient restocking system.
• Solution: A digitised end-to-end platform that connects small retailers to various suppliers and at the same time facilitate invoice financing through partner banks and financing institutions.
• Traction: Acquired 1,200+ active users in the first five months of operations. Gross Merchandise Value (GMV) doubles every month and 90% of its retailers use the stock order and restocking system.

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THE INDUSTRY

Bangladesh, a country of 165 million people, houses a US$34b FMCG Market. Moreover, Bangladesh's FMCG market is growing at a rate of 6.4%, with publicly-traded companies in the same vertical posting a 10% growth during the covid 19 pandemic. The projections predict Bangladesh will  become the world's 11th largest consumer goods market.

The massive market is primarily serviced by small retailers, with at least 95% of sales coming from neighbourhood stores, known locally as mudi dokaans. There  are 1.4 million mudi dokaans in Bangladesh, making it one of Asia's most fragmented retail markets.

These retailers source their stocks from traditional distribution companies that still run on manual systems. Unfortunately, this has created a massive bottleneck in the restocking tier of these mom and pop stores.

Since these retailers rely heavily on a few distribution houses, prices often carry an above standard markup. As a result, their access to good deals is severely capped while they continue to suffer inefficient ordering and restocking procedures.

In addition, small retailers don't have access to proper financing and rely on local loan sharks and micro-credit operators leading to an inability to hold higher inventory volumes and lower spread on goods sold.

SOLVING PAIN POINTS

SupplyLine is putting together a solution on three pain points of the classical distribution system and retail.

1. Inefficient restocking procedures
2. Disconnected relationships between retailers and suppliers
3. Cost-of-money borrowed from loan sharks are eight to ten times higher than that of the bank's

The solution fills the gap by offering a single route-to-market platform for retailers, brands, and lenders. They have built a trading platform where retailers can;

1. Order from the mobile app — addressing the inefficiency in the procurement journey. The app effectively shortens the restocking turn-around time from the usual 10) days down to only 24 hours.
2. Access to products direct from brands and top tier suppliers and the ability to check and compare prices from different sources, thereby getting the best deals available.
3. Access to the right financial product has led to a lower cost of money and higher margins on goods sold.

SOUND REVENUE MODEL
SupplyLine's revenue model is involved in every transaction facet inside the platform, making it optimised for income generation:

1. Revenue from sales operations. SupplyLine earns a commission/fixed fee from suppliers and brands inside the platform.
2. Income from the fintech: SupplyLine earns a service charge for every loan upsell and servicing. Income from the distribution network will also be monetised as a future revenue source.

ABILITY TO SCALE QUICKLY

SupplyLine is asset-light and has a solid, organised lender inclusive model, making it easy to expand to newer markets. It projects to be present in significant markets within Bangladesh by 2023.

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