There are many questions regarding the origin of Bamilo as if they are Iranian or German, is Rocket internet behind them or MTN, and many other questions. We tried to cover all of these questions in an interview with Ramtin Monazahian the CEO and founder of Bamilo.
Ramtin was born in Shiraz. His family migrated to northern Germany when he was 2. He grew up in a small village before moving to Germany to graduate with degrees in business and economics, and after that his Ph.D. in Finance. After his studies in Germany and the US, he worked in the Investment Banking field for 3 years.
After returning to Tehran in January 2014, Ramtin first assembled a team of 10 people. They would go on to launch Bamilo in July in only 6 months. Bamilo initially launched as a mobile & electronics centered marketplace, before pivoting and re-focusing its efforts on fashion.
There were some rumors that MEIG (MEIH) a joint venture by Rocket Internet and MTN in the Middle East invested in them but at the end, the important matter is their impact on Iran’s ecommerce sector not the origin of their investor. Many question the authenticity of Bamilo’s Iranian heritage – its business philosophy and its role in Iran’s growing e-commerce scene, but Ramtin is undeterred.
“I don’t think the other e-commerce companies are more Iranian than us, maybe they speak Farsi better, but the feeling that I have for this country is really deep. I moved back to Iran to build an e-Commerce business,” Ramtin confidently insists. “My personal KPI has to do with building a company that keeps the current Bamilo team in Iran and attracts Iranian talents back from major universities such as MIT or Harvard – to make them want to return to Iran and work with Bamilo.“
TechRasa spends an afternoon with Bamilo’s founder and CEO as he sheds more light on Bamilo’s operations, plans, and the essence of what they’re trying to achieve.
Q: From your experience in Iran, have you observed anything special about online shopping behaviour? How does the market compare to other countries in the region?
A: I would say that the Iranian market is both very interesting and challenging. Demanding consumers know what they want and expect nothing less than very good customer service. You see 24-hour delivery guarantees, 24/7 customer support systems, and extensive 30-day return policies in Iran, which isn’t necessarily the case for other developing countries.
One other notable thing is how customers are leapfrogging desktops and are moving directly to mobile-powered consumerism. We’re seeing a lot of growth in our own mobile app operations.
Q: What is Bamilo doing differently compared to its competitors, e.g Digikala?
A: We have a unique approach to e-commerce and follow what you’d call a Marketplace model: our objective is to provide a simple, convenient, and effective way for vendors to sell online.
We support our partners with revenue-boosting marketing activities. We also started a fulfillment service with our own warehouse and fleet as add-on services to further develop this marketplace ecosystem.
As an e-platform, Bamilo provides innovative solutions for our vendors as we strive to deliver, hand-in-hand, the best online shopping experience to our customers.
Q: There are accusations of unfair competition. Some claim that the prices Bamilo offers are below the market price. Any comments on this?
A: While it is true that there are some cases that Bamilo prices are below market level, I would not go so far as to say that there is unfair competition happening.
Remember, Bamilo is an online marketplace. We work with over 800 suppliers. It is they who decide on the listing price, discounts, promotions, and stock levels of the products they choose to sell through our site.
Ultimately, we encourage our vendors to improve their sales by providing the best offers to our customers. I’d say this is where Bamilo creates value for both customers and vendors.
Of course, there’s a lot of room for improvement and we have to continue growing our assortment and continue finding important vendors to join our marketplace. In the meantime, we’re filling the gap by acting as a direct supplier to customers.
Q: Does Bamilo sign exclusive contracts with its suppliers?
A: Bamilo does engage in exclusive contracts with its suppliers, but only for selected cases, particularly fashion brands. Currently, Bamilo is the biggest e-Commerce shop in fashion and we encourage fashion vendors to do e-Commerce with Bamilo.
One of the reasons behind having exclusive partnerships has to do with the additional specialised/dedicated branding and marketing initiatives (online advertising, retargeting, social media branding, etc) we conduct for these companies.
Our suppliers understand that fruitful partnerships go both ways, and that mutual sense of security must be present from both ends.
Q: Thoughts on your main competitor also entering the fashion e-commerce space?
A: I think it’s great. It’s very good for the industry as it would grow the local e-commerce space. Ultimately, I think it’s beneficial to the Iranian market. That’s what we at Bamilo and care about, first and foremost: empowering the Iran consumer with assortment, choice, and fair prices.
Q: Can you tell us about your warehousing operations?
A: Bamilo operations fall under 3 main categories: cross-docking, drop-shipping, and fulfilment by Bamilo. These options cater to the different needs of suppliers depending on their size, existing facilities, and online activity.
Partners who opt for cross-docking and drop-shipping options receive support from Bamilo in terms of order QA, packing, and last-mile delivery. Those who opt for end-to-end logistics support enjoy both warehousing (storage and handling) and order fulfilment services from our ops team.
We have tailored our services with a few key things in mind: lead time reduction, supplier requirements, and customer satisfaction. Bamilo has strategically located fulfilment centers both in Tehran and other province areas.
Q: Care to shed light on your last-mile delivery system?
A: After almost 2 years in the market, we’ve established an internal logistics system that ensures near-100% fulfilment for orders within Tehran. For other areas, we have screened and selected reliable partner 3PLs who are capable of fulfilling deliveries within our rigorously set SLAs.
As you know, e-commerce business is very fluid. Being campaign-driven, the system we put in place is flexible enough to expand and grow to meet ad hoc capacity as needed.
Everything is rather dynamic – efficiency is always a constant challenge, but that’s the beauty of this business.
Q: There are claims that you have distorted the market by providing premium salaries to local talent. Any comments?
A: I think we can agree to disagree on this front.
Iran is home to a very talented and capable pool of individuals. What Bamilo simply did was offer a fair price and match the quality and level of service these candidates are able to bring to the table. We offer competitive rates.
Bamilo believes in meritocracy and results-based performance and management and unafraid to compensate talent based on these metrics. I personally believe capable, driven employees are the best assets any organization can hope to have.
Q: Why do you have a high employee turnover?
A: International employee turnover is on average 20% , while our employee turnover is 12%.
Let’s be fair here, turnovers are part and parcel of startup life. As a business successfully evolves, it ends up outgrowing its initial hires. The same thing happened with Bamilo – we simply outgrew our first joiners or sometimes, our hires outgrew us.
Also, startups can be demandingly high-pressure environments. Let’s face it, it’s not for everyone. Good news though I think in the past three months we hired 10 people and fired no one.
Q: Black Friday was a foreign concept here in Iran until you guys brought it in. What was the campaign’s turnout?
It is, to date, one of Bamilo’s best performing campaigns.
Black Friday is something celebrated around the world and it was the epitome of what we’d call a win-win-win situation.
First, our suppliers won, many of them sold more than 18x what they would have sold on a regular day.
Second, our customers won, thousands enjoyed never-before-seen, door-buster prices. Here’s a small trivia: there was a time when over 5000 visitors waited over half an hour to get a chance to avail of our campaign offers.
Three, Bamilo won, we made our suppliers and customers happy. And we set a new record for the most number of orders made in a single day.
I have no doubt that we’ve successfully set a trend with Black Friday and that next year, more businesses will join us in bringing great offers to the Iranian market – both online and offline.
Q: What values has Bamilo created in the market these past 2 years?
A: Not only did we create 300 new jobs, we’ve also re-shaped the recruiting process in Iran. Many companies have started adopting our hiring procedure by having multiple analytical tests before the interview.
We’re also doing group assessment interviews with multiple interviewers to carve out talented candidates. Second, our movement opened an ecosystem enabling SMEs to find new markets and increase sales volume. I can proudly say that we’re empowering SMEs and giving them an array of online, hassle-free tools to grow their businesses further. And the best thing about it? Vendors don’t have any fixed cost for using our platform. Everything is performance based. Where else would you get something like this?
Customers enjoy wide assortment at competitive prices, especially for those based outside Tehran (where location plays a big role in inhibiting access to a wide array of goods). Every mother in Iran can now order quality home appliances for her family’s home – now that’s value.
We also enabled entrepreneurs to start their own businesses after leaving Bamilo. Ex-colleagues started their own business equipped with the Bamilo experience, of course.
Q: Bamilo hasn’t necessarily been very active in Iran’s start-up community. What are your plans for the future?
A: Good question.
You know, this boils down to how you define and measure the word ‘activity’. Has Bamilo set up a startup conferences? No, we haven’t. Have we conducted hacker meetups and other tech networking events? No, we haven’t.
These past 2 years, we’ve been focusing on a few key things: 1) properly establish an online marketplace in Iran that will connect small, brick-and-mortar / mom-and-pop shops to the broader Iranian market, and 2) attract, hire and cultivate entrepreneurial talent in order to establish #1.
I think both have direct contributions to Iran’s start-up community, no? Ask all the ex-Bamilo employees who have gone on to establish their own interesting tech-focused ventures, ask the 20-something-year-old student who was able to grow her accessories business by having an online shop with Bamilo, and ask the electronics shop owner who now has customers all the way from Ramsar to Bandar Abbas. I think this is start-up activity, but you decide.
You can expect us to continue doing what we do best and also close the gaps on the things that we have yet to explore. Last Nowruz we had an offline exhibition center for the public. In it, we had themed days that focused on technology and the startup scene in Iran. We have more interesting things lined up your way this 1395 [current Persian year].
Q: One of Digikala’s competitive advantages is that they focused on the content. What’s yours?
A: Indeed, content is very important. Maybe we could have done a better job at the beginning. Digikala is doing great with their content. Creating content at that scale would take ages for us. But Digikala has limited products and one of Bamilo’s main advantages is us having a greater assortment.
So the trade-off is that we have more products and less content while Digikala has more content and fewer products. I think something in between would be best, not very detailed like Digikala and not so simple like Bamilo. I think we are both headed towards the same direction.
Q: Digikala started their recommendation system. Do you have any plans for this?
A: Yes, we’ve also started something similar recently.
Q: Is Bamilo funded by Rocket Internet?
A: MTN is our investor and they are supporting us. Rocket Internet is not in the game right now.
Q: When you entered the market the price of banner ads tripled. Any comments?
To become number 1, you have to quickly test the market, listen to customers, and adjust your services accordingly. This is the strategy we adopted.
Iran is home to a very interesting online environment – where Facebook, Google, and affiliate marketing don’t work well. Bamilo had to adapt. We used banners ads to capture the traffic we needed to grow.
Q: No doubt it is challenging to venture into e-commerce here but what are your pieces of advice or tips to anyone who wish to start an e-commerce venture in Iran?
A: You know, there’s a cardinal rule that startups follow the world over: “customers come first.” I firmly believe in this and strive to challenge the way Bamilo delivers customer experiences every day.
Having a level-headed team with high degrees of motivation and experience (and acceptable level of intelligence) is the key to success – the best businesses are not built in isolation.
Personally, I think niche e-commerce websites have a good chance – be it handicrafts, imported, or exclusive products. Mass-market initiatives are suited for bigger players with deeper pockets.
Q: What are your plans for 2016?
A: Definitely a bigger and better Bamilo this 2016!
We’re excited to contribute to and further grow the e-commerce ecosystem here. We see this panning out in several ways: by increasing partner suppliers and also our product assortment on-site, connecting with complimentary services 3PLs, and creating more interesting campaigns for both our customers and vendors.
Also looking forward to making our platform even more mobile-friendly – one of our big hairy audacious goals is to have the Bamilo app installed in every mobile device in Iran. We’re ramping up our efforts this year and that includes growing our in-house IT team.
The past 2 years, we’ve enabled SMEs to sell to all over Iran. This year, we’re hoping to empower them to sell to the Middle East.