Leaders in Supply Chain and Logistics with Radu Palamariu

#47: Aadi Vaidya Chief Operating Officer of Zilingo

July 10, 2019 Season 1 Episode 47
Leaders in Supply Chain and Logistics with Radu Palamariu
#47: Aadi Vaidya Chief Operating Officer of Zilingo
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Leaders in Supply Chain and Logistics with Radu Palamariu
#47: Aadi Vaidya Chief Operating Officer of Zilingo
Jul 10, 2019 Season 1 Episode 47
Radu Palamariu
Aadi founded the Indonesia business and grew it from scratch to one of the largest fashion marketplaces in ASEAN today.
Show Notes Transcript

Zilingo is the top beauty and lifestyle marketplace allowing smaller merchants from Southeast Asia without an online presence to list their items for sale direct to consumer. It has raised Series D funding of $226 million nearing almost 1 billion valuation.

Discover more details here.

Some of the highlights of the episode:

  • Aadi's journey from banking to e-commerce.
  • How Zilingo started- aggregating fashion merchants in ASEAN.
  • Biggest challenges for small businesses in the industry- sourcing and financial services.
  • The growth of B2B vs B2C
  • How you can find 20 logistics partners to work with you on B2C, but on B2B probably there are 2 players.
  • “We want to remove these middlemen and ensure only the right people or the people who add value stays in the supply chain.”
  • How an IoT system could reduce the risk of pilferage  - 5% to 10% of cargo can end up as lost items.
  • "I think people need to be mature faster, absorb better and lead better."


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Speaker 1:
0:00
Hello and welcome to the leaders in supply chain and logistics podcast. I'm your host Rapala MRU, Managing Director of Ellicott Global. Our mission is to connect the supply chain ecosystem in Asia and globally by bringing forward the most interesting leaders in the industry and it's my pleasure to have with us today our divide. Yeah. Who's the chief operating officer's lingo? The lingo is the top fashion and lifestyle marketplace allowing smaller merchants from Southeast Asia without an online presence to list their items for sale direct to consumer. They have raised series defunding of 226 million, nearing almost a $1 billion valuation. Our, they founded the Indonesia business and grew it from zero to one of the largest fashion marketplaces in RCN today and he also set up the B2B platform and designed the entire logistics flow from seven countries into ASEAN, primarily Indonesia to support the procurement needs of sellers. He soon also took over the entire supply chain optimization and set up hubs in Bangladesh, Vietnam, Korea, China, Thailand, Myanmar and so on.
Speaker 1:
0:59
He's the chief operating officer since 2017 at the lingo, and he now drives the company's p and l of of almost 1 billion, $1 billion and operational efficiency across business units, including B2B and B2C. He also looks after more than 300 people in six geographies and his, uh, his rapidly expanding his team. So do look him up after this podcast, uh, in case you're interested to apply. Um, [inaudible] a pleasure to have you with us today and thank you for your time. Super. So maybe, maybe start by telling us a little bit about your background, cause I know you, you didn't do all the, all your life, uh, e-commerce, right? So you came from actually Citibank and then you ended up at Duolingo. So tell us a little bit about yourself personally and how you ended up.
Speaker 2:
1:41
It's a show show who love to, uh, so I'm actually from a small town, uh, in northern part of India. Uh, grew up there, uh, without much access to, um, uh, information and, uh, of without much exposure to, to the online world, uh, itself. Uh, when I first moved to Mumbai, that was for a university. That is when I, uh, let's put it this way. So the wording for the first time in a way, and I was already 18 at that point, at 17 or 18 at the point of time. And, uh, it was, it was eye opening in many ways, uh, um, people, businesses, um, processes, et cetera. All of those things are sort of coming in front for the first time in life. And, and it was all very, very fascinating. Um, I did a degree in management studies. I'm from San Diego College in Mumbai, and, um, that's where I actually met Auntie, uh, who was, uh, a one year senior to me in college.
Speaker 2:
2:38
And, uh, both of us, uh, work together on multiple college festivals. So sort of develop the working bond from that itself. Uh, she moved on and say working in management consulting and VC later and, and moved on and started working with banking. And of course it was, it was, it was literally like one of those moments where, uh, you are, you are 20 something and you get a prestigious job and you're like, hey, this is, this is probably what I'm designed for. And that's how I landed up in Citibank. And I started working, um, with some, uh, tech and Pharma glands actually. Um, so I did two years in City Bank. Uh, I was based in the Mumbai headquarters and, um, I think over time, um, studied, uh, meeting a lot of our clients. So I used to deal with, um, a lot of local Indian corporates and I started working with a lot of, uh, as I said, starting with Pharma and tech companies and they then later also into some of the companies that were doing a financial services with non banking financial institutions.
Speaker 2:
3:37
I think the core learning that came out of that entire experience was, and of course at this stage I wasn't really sure what I really want to do in life, but the core learning that sort of started coming up, especially in the Indian ecosystem of corporates was um, that things are lowly marred by inefficiencies. Now when we are working with an BFCs who are lending to one of the embassies as working with was actually lending to truck drivers. And that's where the first sort of interaction with smaller businesses happened. And you could see that those people are not really at advantage. Um, and uh, if something could be done for them, it would definitely change the lives of many people in world. Um, unfortunately when you're working with a big of national institution, um, you're actually working in the interest of the bigger corporate detector and maybe, and nothing wrong in that, but uh, and that's the client said those guys are working on.
Speaker 2:
4:27
But that is somewhere where I guess the first sort of hint scheme that he had only want to help the other side of the spectrum where you could actually work with these smaller businesses and maybe, um, have impact on skill. Um, and I think two, two and a half years of Citibank and one fine day on the, uh, call me and she said that he am looking at this idea of doing something for, uh, businesses in the fashion and lifestyle supply chain. Wasn't very aware of how the, how the entire supply chain works. Um, so did a bit of a study, met her a few times and uh, we started, uh, coming down to Bangkok a couple times a as well. So, uh, Bangkok, India, a couple of other countries where some of the first, first sort of, uh, places where we were, uh, doing the hypothesis or running the habitats is on.
Speaker 2:
5:11
Um, and that's when sort of, uh, we decided that hey, this really is an untapped opportunity. Um, I think where the idea also came from was we were coming from India where the Flipkart or, and the Amazon Revolution was really on the up, uh, Southeast Asia on the other hand, even though after so many trips that we made with realize that even though it has much better infrastructure, both in terms of the logistics as well as in terms of smartphone penetration, Internet penetration, et Cetera, or some, they are lagging behind as competing, let's say in India or China in terms of this entire ecommerce revolution. So I think that is where we sort of found a natural fit and we knew that if we don't do it now, someone else is definitely going to do it. They would, of course, uh, the rocket Internet companies at that point in time and all the credit to them for sort of clearing the jungle, but they were either extremely horizontal marketplaces like the, like the Lexan Lazada or they were, um, uh, people who are working on slightly higher end brands. No one was really aggregating the smaller businesses, which is what we wanted to do. Uh, and that's how we ended up in Bangkok. Um, and started the business from there.
Speaker 1:
6:15
So far I haven't, so it, you know, it's important to who you go to college with, right. Choose your, choose your good thing, crowd around you. Totally. Um, and tell us a little bit, cause you know, there's this listeners from all over the world that will tune into the podcast, tell us a little bit about the lingo and explain it very simply to them in, in, you know, in case they are not, they're not familiar with it
Speaker 2:
6:35
surely. Uh, when he started the business and from the last question itself, the idea was to aggregate small fashion machines, um, in [inaudible], um, bring them to light in terms of the digital economy and give them a platform to sell, uh, to consumers across the region. That is simply very started from, it was as simple as that. Um, aggregating small businesses and giving them a place to sell. Um, I think all the last four years, the idea of the business has evolved quite drastically. What started happening after about a year, year and a half of us doing this, what we realized is that the biggest challenge is not really selling you. The biggest challenge for these guys is not really selling. Of course, it's great to have a platform that empowers them or enables them to sell to, uh, businesses across the Dejan or maybe consumers across the region. But the challenges are a far deeper and trenched than just a distribution challenge.
Speaker 2:
7:34
The bigger challenge, for example, for these smaller businesses we're sourcing like, Hey, where do at least source from, or another bigger challenge was financial services. The banks or institutions in this part of the world were not willing to touch these businesses, these small businesses. Or another bigger challenge was that he, I have this agent who I can procure from, but what about only procure? I don't know what to procure. So when we started sort of looking into these challenges and sort of went a bit more upstream, um, we realized that, um, the B to B side of things where the businesses are dealing with other businesses, uh, is not really solved for, to a great extent. And of course we do sees a lot more sexy and people want to solve for it. Um, B2B is getting your hands a lot more dirtier. But when we did that, the output per unit effort was a lot higher. And that's when we realized that, hey, maybe this is also something that we should start exploring. Um, and today I think four years later, um, B2B is actually a larger part of the business at this point in time where we do multiple services on helping these businesses and stakeholders literally from sourcing to financial services, to trend analytics, uh, et, et, etc. So, so that's where the business has evolved to today from just being a small ecommerce marketplace.
Speaker 1:
8:48
So you would say that right now you are more into the B to B space, then you're into the B to c cause you have both elements? Both.
Speaker 2:
8:55
Uh, definitely. I wouldn't say that we move from [inaudible] to CWB. In any event, what happened actually was B2C of course kept drawing at a steady pace. And in Indonesia for example, we are still the largest fashion marketplace, but the growth can be to be was so high or so fast that as a proportion. Now the VOC business seems a bit smaller. So it just, that the growth on the one side of business was a lot higher. Um, and, and, and
Speaker 1:
9:22
somebody, somebody was asking the question in terms of,
Speaker 2:
9:26
uh, I think
Speaker 1:
9:27
you mentioned that some point that you envisioned you had cynical envisions lingo as a revolutionary new retail platform that acts as a single one stop solution for merchants and manufacturers. Um, how would you describe it? So let's, let's just go into the practicality of it. How do you envisage envisage that and how would that help people?
Speaker 2:
9:45
Yeah, sure. So, um, taking a step back, right? Like, how early does the fashion supply chain work at this point in time? And what do, what do we mean really when we say that it's broken, right? Uh, so if you're a business who's trying to procure, let's say in the u s and you want to procure from a manufacturer in Asia, let's say in Indonesia, um, it is extremely hard, um, to get that connection right and get this entire flow done in a, in an efficient manner. Now what does that be? Now? How would you end up doing it? But let's say I am, I'm a business somewhere in the u s I will reach out to an agent in my state forest who reaches out to an agent that's in the New York who reaches out to a customs agent in let's say somewhere in China who is then working with some of the regions, et Cetera, et Cetera, et cetera.
Speaker 2:
10:28
So the whole process is marred by middlemen. There are middlemen after middlemen after mailman. It should those sucking in five to 10% of the margins, making it extremely expensive for the final brand to eventually procure those items. Or making it extremely hard, uh, in the first place to even understand what to procure. Uh, so one of the things that we call talk about a lot internally is called yarn to closet. So what we are seeing or what we are envisioning or what we are telling our teams internally is that our objective is to make the yarn to closet process. Uh, as simple as possible. We want to remove these middlemen and ensure only the right people are the people who add value, stay in this supply chain. Uh, so we work today for example, with people from, uh, who are producing Yun to fabrics, to readymade garments to brands and eventually consumers.
Speaker 2:
11:19
And those are really the people who are adding value. Other than that, it's just, it's just some sort of information arbitrage that is happening and you're making money on that. So the idea is to remove that information arbitrage. Um, with the help of technology enabled these businesses, whether they're in the u s or Latta, I'm or in Asia itself to see or to directly connect with these bigger manufacturers or suppliers or businesses. Uh, and the tool allows them to do that because it is highly localized both in terms of currency and language. And then to let them procure and choose what they want to procure and Jews and of course enable them or we help them to do it better through multiple things, including a trend analysis tool or a financial services tool. As I told you [inaudible]
Speaker 1:
12:02
and let's, let's go a little bit in terms of the, because there's, as you said, there's the underneath this, so this is, the vision is clear, but underneath it is, you know, you have a lot of, you know, on the operation side and you're in charge of supply chain optimization, you set up hubs in all those centuries. Tell us a little bit, what does that mean? I mean, how, how do you make it happen? How do you measure it? How do you intentionally,
Speaker 2:
12:24
sure. So, um, and I'm glad you mentioned the point about supply hubs as well. Right? So the thing is all of this, and one of the realizations that we've had over the last four years is that all of this current work simply by having an app or a tool and then just praying and hoping that this will work out, you need to have people on the ground. Um, and you need to have these hubs created where technology is actually empowering these hubs. But technology in my view personally is an empowerer. It is, it is not going to replace the human touch. It is not going to replace these physical hubs that we're trying to create. So one of the hubs that we have created is in a teleport in southern part of India and other hub fair we've created is in Bandung, in outskirts of Jakarta, in Indonesia.
Speaker 2:
13:11
What happens there is that we have, uh, an office or a team of people on the ground who are actually going and meeting. These manufacturers are pretty much all on, on a weekly or monthly basis. What they do there is that they go and understand what is the biggest problem that these guys are facing. Now to give you an example and to make it a little more tangible, right? So one of the factories that we were working with in Indonesia, uh, told us that he, our biggest challenge is that I have 10 lines, if you, if you understand the concept of lines in manufacturing of clothing. Yeah. So he said, hey, I have 10 lines here. And um, somehow I'm not able to figure out, but my production capability is going down and I'm just not able to figure out what's happening. Uh, now I have these deadlines and I'm not really sure what is going wrong where.
Speaker 2:
13:57
So we worked and we helped, uh, establish and ERP mechanics and quality control mechanism for them. They're using the technology that we have plus the partners that we work with. Uh, and we were then able to figure out which of these lines were actually doing better and which of the lines we're not doing better and why those lines were not doing better. So these technology or these tech basically enables them to see that corner, let's say a heat map basis. This particular line has five defaults or this particular line has only one default. And then you can actually figure that out, take it out and solve that problem and then fix it. So those are some of the things that you've started doing. And again, on a very, very tangible level, this was a very, very microscopic example where literally to the level of line efficiency is something that you're trying to solve for. And then of course there are metrics attached to these things on which factory is doing better in terms of uh, let's say the lesser defects, um, better sort of delivery timelines, um, et cetera. So, so that is, that is sort of on a very ground level of how this is working.
Speaker 1:
14:59
How about this fascinating. And I mean, uh, I didn't realize that you go into that much detail and then, I mean the, I'll, I'll, I'll side track a little bit with the question now. But so how do you charge on the, I mean, in terms of the business guys? Okay. Cause if you, you know, somebody posts an item for sale on your website and then you sell, then you get a card. It's quite straightforward. Right? But in this case, I mean how [inaudible] like a subscription. I mean, how do you shop shop?
Speaker 2:
15:23
I think the model is still the same. The model is very clear to us in our head where, uh, we don't want to charge the business partners that we work with. Um, unless they sell. The idea is to make sure that as you sell or when you sell, we charge you for it. Now these tools on the whole, um, uh, and we don't enforce businesses to necessarily pay a lot of money for these tools. Of course there might be a minimal subscription fee because if something is for free, people don't value it. Um, but other than that, the whole idea or the concept for the business as a philosophy has been the fact that tech tools, all of those things are going to be more like growth hacks. These are the things that are actually going to get you people get you these people in to start working with you because you don't what will happen.
Speaker 2:
16:08
And this is something that we've tested before. If you go out and you tell someone that he am gonna establish the stools or I'm going to put these tools in your factory, it's extremely hard to get a buy in. If you start charging for it from day one till the time that person doesn't see some sort of output coming out of that, they won't. We've actually converted factories where we started working with these tools for free, let's say, and six months down the line they were like, hey, this is extremely useful. And we were like, hey, we want to charge something for this. And they're totally comfortable doing that. So we need to for show them an impact. Again, we don't want to be yours as someone who comes and says that he, no, no, no, buy this, buy this, buy this and I want to charge money for this. You want to show it back first. Um, two philosophies that we work on for our businesses and for us ourselves is improvement in top line and improvement in bottom line improvement. And the line is a lot easier method to get an in improvement and bottom line is a more longer term play and we feel like both are extremely critical, but you need to go from the top line approach first, install the things that will help improve bottom line and then over time start monetizing
Speaker 1:
17:11
and, and, and in terms of, in terms of, uh, okay, so if we are to look at some of the current challenges that you faced. So all this, this is really interesting and I'm sure that you, you know, that's why they have you write the, you know, operations people that they have to fix problems. So what's some of the biggest problems that you face in your operations at the moment? I
Speaker 2:
17:28
think, um, in terms of the ecosystem on the whole, um, it's an, from the first question I was mentioning that would be very grateful to the likes of a rocket Internet who cleared the jungle. Um, as we started going upstream, the jungle is still there. Like it's, it's not yet been cleared. It's extremely hard. So a lot of people ask us that. He who's your competition? Or who are you? Like, it's very expensive. It's very hard to explain. So when there is no comparison, it becomes hard for not just of the people you work with, for the investors, for the media to really understand what you're trying to do. For example, uh, if Uber is burning or even Uber was burning millions dollars, uh, and Lyft comes in and sees that, hey, you're not, I'm also going to burn maybe $1,000 lesser, but you know, but there is a comparison here.
Speaker 2:
18:16
So when we come in and we try to tell a business that, hey, you know what, why don't you work with us and do that? And they're like, he but who are you? Like what, what are you guys? So I think education is a big, big challenge. Um, the upstream side of things of the bub side of things is still under educated, I would say, in, in, in these entire scheme of things. And the second bit is that the entire ecosystem as I spoke, um, is still very geared for a B to c side of things, especially here. Uh, China is not on, which is great because Alibaba cleared that jungle there. Um, but Southeast Asia as Yan of which we feel has a tremendous potential with, um, the entire us, uh, China trade battles, etc. Happening, uh, is still undereducated. So I think, uh, in terms of both education and ecosystem development where, uh, as an example, if I were to be a little more specific, um, you will find 20 logistics partners to work with you on B2C, on B2B probably to number is to, because people have not even thought about those challenges or those issues that he, if you were to ship something from a as simple as an Indonesia to a Philippines, what would clearly happen?
Speaker 2:
19:22
What are the custom duties that are going to be actually involved in? And are you gonna do seafood? Are you going to do effort? How you're going to work around those things? So in BOC, solutions are ready. We spoke in B2B, it's still a lot harder.
Speaker 1:
19:34
I mean, and also, I mean let's, let's, let's, let's face it, I mean with heart problems come also potentially very good business opportunities. So easy problems.
Speaker 2:
19:45
Totally. And I guess that has been the reason as I mentioned, uh, that the output per unit effort that we are seeing on B2B is just extremely high. It's, it's like if someone is actually coming in and trying to explain that, hey, this is what we're trying to create, um, people really do get it. Especially the businesses who work with clients globally. They do definitely get it.
Speaker 1:
20:05
And now the question that jumps to my head to my, you know, in the flow at the moment, like, so how do you, let's say I'm applying right back to you. No, you don't really, I mean there's not, not so much. I mean basically you can quite unique into it in what you do. So when they ask you, so you're like, who you're like, what, what are you, what was the simplest way?
Speaker 2:
20:23
Yeah, I think, I think, um, could question, uh, and we've been thinking about it for quite some time as well. Um, we used to go with multiple approaches. So to someone who will say that, hey, I can help you procure better, or to someone else who will say that, hey, you know what, I am also the biggest POC marketplace in Indonesia and doing well in Thailand, Philippines, I can help you sell better. Or you can go with the approach that, hey, you, what? It's very hard for you to get access to banks, et cetera. But we partner with a, you will be with multiple other financial institutions. Dbs, we can help you get financial services better. Um, but it's, it's, it's just a complicated pitch every time because you're trying to tailor it for the client. So that approach of course still works. But one of the good things that happened, um, uh, that our tech guys, uh, who work out of Bangalore in India did, was that we created a, a single UI or single UX experience for our businesses.
Speaker 2:
21:20
And so recent development, not a very complicated piece of tech, but one of the landmark things that we did actually where now there is a single app which we go and show the business and we say, you know what, this is us. So it says source, it says pro CSL, it says financial services. It says ERP, hrms, whatever you want in one piece. So we say, hey, we are a single stop solution for you as a business to do whatever. And uh, we would think we were talking about this internally. There are a couple of people in the team who had their own businesses and they were like, hey, if I had something like this, it would have made life so much easier because I can just go and say, I want to procure this, I want access to financing, I want to also sell your, it's all there in one place. So a single stop solution. Now, uh, of course when we go and need multi million dollar clients, it's a lot different there. We pitched, we try and pitch in a more tailor made fashion. Uh, but for smaller businesses, it's the single stop solution.
Speaker 1:
22:12
No super. And, and, and you know, the fact that you've got people within and you know, you're, there's a couple of obviously entrepreneurs, there's a lot of entrepreneurs within the company as far as, and I know, and if they said that, uh, well scratching your, let's put it this way, scratching your own each is a very good strategy for, uh, for making it.
Speaker 2:
22:31
And I think what [inaudible] is totally aligned. What helps a lot is that we are talking to our manufacturers like all the time and we're talking to ourselves all the time. And of course B2B is comparatively newer, but you see sellers are B2B buyers. So you keep meeting them, asking them that he, what is it that is going to really help you? Yes. Yes. Um, one, one listener had the,
Speaker 1:
22:53
I had the question in terms of going a little bit into your main consumer portfolio and then target markets for it.
Speaker 2:
22:59
Yeah. If you can give us some idea. I think, um, uh, it would have been a lot simpler answer about a year ago. It's a lot more complicated today of what we've started realizing as we started going upstream was that he, it's not just the, um, uh, readymade comment manufacturer who needs help. It's not just the brand who needs help. You know, what the fabric guy also Julie needs help. You don't want the young guy also really needs help. So the target consumer is pretty much every stakeholder in the fashion and lifestyle supply chain, starting from yon to fabric to RMG to brand and consumer. And we are tailor making solutions for all of them. Of course for a consumer solution is far different from the all the other businesses in the supply chain. But you tailor make, so for fabric for example, it's a lot easier for you to, uh, sell online as compared to what Eddie made good because fabric specifications that are lot more standard.
Speaker 2:
23:53
The problem though is what the fabric guys face is that there are very few people making fabric as compared to, let's say, a readymade garment manufacturer. Um, so, uh, it's, it's, it's, I wouldn't see the problem they face, but the problems that arise from the, in the fabric to wrap readymade comment section is very different. So there are actually, uh, cartel of middlemen between the fabric guy and the manufacturer, uh, which is skewing the prices so bad. Uh, this, this is something that utilized in Indonesia, um, that if you are able to move that cartel from there, the prices of fabric, which is actually 60% of the readymade carbon sprays, uh, follows, uh, and the efficiency that you can bring in by just doing that is immense.
Speaker 1:
24:38
It tell us a little bit, maybe you have an example of, of, you know, one specific, I mean, I'm sure there's many, but this one specific case study, maybe the more impressive one, right? In terms of some actions that you took or some changes or tweaks in the system that, that really created the
Speaker 2:
24:53
no, definitely, yeah, I can actually talk about a couple of them. Um, uh, maybe one on the B to B side on the B to c side. So on the B to B site, this particular example, right. So we were, uh, working with manufacturers in a Bobo and Bandung. Um, and um, there are only, currently there are only two major hubs for fabric, um, in Asia pretty much globally as well. So India is really, really good for cotton and China's really, really good for Polly. And then you have to have on Korea, et Cetera, doing more specific sort of fabrics, more high end fabrics. But India and China broadly are doing a lot more fabric, um, into other part of manufacturing. Now. Um, Indonesia fabric is a sunset industry. So very, very few people are really manufacturing fabric in Indonesia. Uh, so these manufacturers, and you're talking to them, they said that he, you know what the biggest pain point is?
Speaker 2:
25:44
Fabric procurement. And because I have to either fly down to China every three months, every six months, and find out what's happening there. I don't understand the language. I don't know what currency they're using. Um, or I have to talk to these agents who are here in my city or in my town and they will do it for me. Now when we dug deeper, we realized that these agents actually, uh, are nothing but in, in, in, in, in, in new individual businessmen who is actually going to China. What he does is he goes, he gets the swatches of fabric into Indonesia Max a bit by like a hundred percent, and then shows it to these guys. Again, they don't have any options, so they are just buying it a, so the project that we started there was that he, let's eliminate these middlemen. What we do is we have a small team in, uh, in China and Hong Kong as well, but we'll aggregate these fabric manufacturers and get them onboard onto our platform and directly present these, uh, as a solution to our clients.
Speaker 2:
26:38
And that changed life for many of these people. Of course, it's not as, as it sounds, the, these are very highly entrenched into the system. These agents, and again, there are catalyzation. I have literally been in rooms with exporter associations where they've threatened me, that he do not try to solve us, US suppress. So it's not totally, it's not that straightforward, but there have been, uh, instances where we've actually been able to connect these manufacturers and our directly with fabric manufacturers, uh, and prices and cocks, cost of goods has gone down by 60% up to 60%. So that has been one of the highlights and something that we very, very proud of. Um, and the second bit on the BDC side of things was when we entered Indonesia about three years ago now, two and a half, three years ago, uh, years ago now. Um, it was extremely hard.
Speaker 2:
27:26
It was extremely challenging to get items delivered to all parts of Indonesia. Of course, everyone was doing Jakarta, Java data back that you've got a mega city region, uh, some people who are doing valley, some people are doing Sumatra, but either the timelines were like 15 days or no one was offering gash and delivery, which is like 90% of the beam method using these countries. And that is when with the, uh, sort of an American amalgamation of our ops and deck systems. Uh, we built this app optimization slash route optimization tool, partnered with about five different are providers of uh, last mile logistics. Um, and, uh, sort of built this, uh, a mechanism where the orders were now to be shipped wire, which particular road to which particular provider depending on, uh, capability, capacity and reach. Um, and the sles dropped by nearly 50%, and we were doing, uh, cr across Indonesia deliveries, which Zod enabled within six months of launch. There was another thing that happened, I think and um, sort of pushed us to becoming a, of a loved and accepted brand in the country.
Speaker 1:
28:34
No, I mean for sure. When you're saving people money, typically it typically and time it typically works. But, uh, like in, in, in many industries where there's a, there's middlemen, uh, of course the middle man will not be very happy, appreciated. So, you know, maybe you can convert them. I Dunno. All that had been, I have this dying diehard, right. So I'm moving a little bit to, to a different skew of a question because we have a, we have a listener that was asking about sustainable development about, and I think this is a big topic, sustainability in general. And you know, you, you hear a lot about global warming and a lot, all of these things. Um, so have you, have you, is this also on your agenda? Do you do things specifically, you know, for, for, for sustainability agenda or how does it work for it?
Speaker 2:
29:23
Sure. I think, um, and going a little back, actually in time or when, when, when I was studying in university, there was all these stew type of people in the class, right? There was one group of people who wanted to go into corporates and, um, uh, on money. They were tagged as people who want to earn money. And then there was another, uh, section of people who wanted to go and help people. So help people and our money. I think what Zilli Mu has enabled us all to do is, um, uh, not just be in that sort of, uh, uh, uh, Co, I wouldn't call it corporate, but not just be in an environment where you are trying to build a business, but also help people, uh, and also had the planet and how does this happen? Right? It's, it's very entrenched, uh, that as an, when you start optimizing a particular supply chain, you eventually start helping things on a more macro scale.
Speaker 2:
30:16
Now, unlike an electronic supply chain where Foxconn exists and is pretty much building iPhone for everyone in the world, the fashion supply chain is so, so, so fragmented with hundreds and thousands of manufacturers across the world that if you were to in any way sort of aggregate these businesses and bring some sort of efficiency, you will save, uh, not just time or money, but also the planet in some ways. Now to be a little more tangible, right? So, um, building a t shirt for example, or manufacturing or t-shirt takes about, I don't know the exact, I'm forgetting the exact number, but about the 20,000 liters of water, I'm assuming from growing cotton to then manufacturing it to then shipping in, et cetera. So the whole process is about 20,000 liters of water. Now the thing is with z Lingos, uh, 10 analytics tool, um, if you are able to actually, uh, predict better what sort of you should you should be building.
Speaker 2:
31:08
They mentioned one go waste. Like someone is definitely gonna go and buy it and not seeing 100% shorter d that the item would get sold, but the probability of getting sold increases. And if you're actually able to do that, you are saving water, you're saving the planet. We also work, uh, across, uh, there are efforts across the company where we are trying to, uh, reduce waste. So again, one of the things that we're doing with our fabric manufacturers is that one of the bigger challenges for these guys is now let's assume I get an order from Ziba and I have to procure 10 tons of fabric. They will generally order Drayton's, uh, accounting for the stage. And generally there will be a obvious digital [inaudible] and an under done would be left and what you do with that, right? So we've actually designed a program where we are procuring this x excess fabric putting into the platform and then selling it. So that has, again, not just helped these guys get better money but also reduce wastage on the whole. And of course all of these days back to saving water's your emissions, etc. Etc. So very, very committed. I don't think these are different things and I'm not a big fan of people doing business and then allocating half a percent of the top line on CSR. I think both need to be interlinked and I think we are going in that right now.
Speaker 1:
32:21
[inaudible]. Um, we, we had a, we had, um, another question in terms of, uh, in terms of focus. So for now you seem to be quite focused on own ostium and southeast Asia. Are there plans a, and I think you touched briefly on it, but are there plans also in Middle East? There was one listener that was specifically, I've been less because he's from there.
Speaker 2:
32:41
Yeah, no, definitely. So in fact, when we started, it was a, a big, um, Asia to Asia story as young [inaudible] story. But I think as we've, um, mature and grown over time, we will, should realize the fact that, um, it's super hard to beat Asian supply both in terms of quantity and pricing. Um, but, uh, you need to have a global vision in terms of the demand. So we're very, very open to exploring demand in other parts of the world as well. In fact, as I mentioned, and I gave the example of a u s business, that is actually a real example. So we actually have set up an office now in the u s and in Sydney, in Australia as well with, um, uh, I think, I don't know why the sterilization didn't happen earlier, but of you're actually able to sell faster, better, uh, with higher margins in developing oil because I think the proximity is lesser to the supply and hence it's easier show. Totally. Definitely. Middle East is one of the countries or one of the regions on the readout as well to grow.
Speaker 1:
33:41
Um, well we talked also a little bit about, um, about, um, disruption about the, the new things that you're doing about the new things that you're planning to do. Um, there's, there's also, there's, there's existing, obviously there's some existing providers in the space of supply chain and ecommerce and all of that, but where, which one, which one of the initiatives that you're doing do you think will make the most, uh, impact in terms of disrupting, if you may? Right. And you've talked about the one stop solution. I mean, I think in in my head that probably is it, but I'm just going to ask the question because it was specifically framed like that. Yeah. Yeah.
Speaker 2:
34:17
I think, um, we need to go deeper into factories, into manufacturing. I think that is what is going to cause the next wave of disruption in the supply, in the supply chain of fashion. I give one example of a ERP, uh, and better line management at Tetra. And again, since the whole system is so unregulated, even a small piece of thing happening that helps. So for example, today, um, uh, efficiencies and uh, the lines et cetera being managed on bipods even for the factories that are producing for the biggest international brands. I'm happy to share some content around how we are changing those things as well. But, um, I think, uh, one of the things that our factory you want to keep talking to us about is pilferage and they see that there is a lot of stuff that is actually getting stolen from the factories.
Speaker 2:
35:08
So, and this is something that we are having an active discussion with some of our investors who are very keen on looking on things like this in terms of technology creating disruption. Um, uh, and, and with the three to five years view, right? So via VR you're actually thinking of installing not just a software but hardware and Iot is in these factories where you have uh, uh, um, no one needs to manually then upload that, hey, these are the products in my warehouse. Now if there is an Iot that and the, the, the inventors auto updated onto the, onto the systems, um, they are, the chances of build region theft reduces drastically. And again, this is not a small problem. It's a five to 10% of the items getting lost. Uh, another problem on a big challenge that one of our bank dishy, uh, partners told us was that he, I have about 40,000 people working in my factory.
Speaker 2:
35:56
I think 5,000 of them don't exist. So they are cost, uh, workers who are just somehow getting that endurance done and they never come to work. So now again, you can think of the solution as a putting a, a fingerprint Lido because 40,000 people doing fingerprint video, 40 days going to go into that. So we are actually thinking of, uh, installing some sort of RFID chips in these factories so that as you walk in a and three or it card detect right gets right and you are in and you're in, your attendance is done. So I think that there will be some sort of disruption in domes of the entire process in which these factories are run. Uh, some sort of blockchain contracts are something that are on the radar as well because again, um, trust is broken. Supply chain is so fragmented. So if you have a close knit blockchain sort of solution around contracts, that can also definitely help. So you're looking at, into, into, into or into blockchain, into Iot to some sort of hardware as well as as, uh, go on a and that is, I feel going to be the next change of, uh, the supply chain. No, I guess in the fashion space.
Speaker 1:
37:05
Hmm. Well, I mean, I can, if I can chip in with my own observation upon going to to a lot of conferences and I've, I've just returned from Europe and I have attended a in industry 4.0 this, this was not for fashion specifically, but it was for manufacturing in general. Um, and talks, you know, fortune 500 companies are all about all this, you know, uh, industry 4.2 Iot, blockchain, machine learning, artificial intelligence. But again, I think, you know, where you guys operate in, where most of the other 99% of the companies that exist are not fortunate by a hundred. Yeah. You know, they are not at the, at that level of development, technology and so on. Right. And then you need to kind of, you know, the, like you rightly said, they run maybe manufacturing lines on a, on a, on a board, or they run their company on a, on an excel spreadsheet, and it's just the reality of today's world, right? So then how do we, um, uh, help all this companies also upped their game, right. So it's interesting what you mentioned because it almost sounds in my mind as in you will have a plethora of uh, or that you are aiming, you are, you're trying to get to a plethora of different tools always on, not like you're building a tool box and depending on where the company is or the manufacturing or the producers, okay, let's, let's see what you need to make, make biggest impact, right? New Business.
Speaker 2:
38:20
I think data is gold, right? End of the day, about not tying back to the questions you asked earlier, that obviously monetizing on these tools today, maybe 100%, not maybe some percentage, but the idea is that if you don't get a large chunk of these businesses on the platform up front and really realize what the problem is and then double down on that, you're going to be living in a dream void where you will be solving one small problem, which probably doesn't even matter to the larger masses.
Speaker 1:
38:48
And let's talk a little bit about, you know, about people, because ultimately this is what makes all this beautiful technologist work and, uh, and, and, and come together. So, you know, you have about 300 people that are at right now in your team. So what makes it, you know, what's the most difficult, let's say, because it's also when you're building such solutions that can be quite broad and you're kind of building a product that doesn't exist or hasn't existed, it's much more difficult to find the right type of mindset, then it's easier for Citibank, let's say, to find another banker than it is for you guys to find somebody that hasn't done what you've done, you know? So how do you, how do to tackle that?
Speaker 2:
39:24
I think, um, they bottom question extremely, extremely hard, um, uh, to hire the right people. I think that is probably one of the biggest challenges. Um, when you're building something like this, which has not existed before or something that is revolutionary in sites, uh, it is not truly of expedience specific experience that matters. Of course it is important or it would be, it's a good have that someone has come from let's say a supply chain background or someone's done some sort of marketing services in, in another company before that. That's all helpful. But I think what is the, the, what is the most important part is that attitude and sort of alignment to the vision. Now, there have been a lot of people who've come and spoken to us who are great cvs and a great experience, but when you talk to them about the vision that he, the idea is to transform the fashion supply chain, which is about 3% of the global GDP.
Speaker 2:
40:16
That's about a three, $4 trillion. People are just not able to fathom it. And the idea is, and a lot of people tell us that he, in 40 years, you guys are raised a lot of money. So, so good valuation. We feel like we're not even a percent done because, um, all this has happened at base because no one has really touched that space. Like it's watching you. Once you start touching it space, the opportunity is just immense. Uh, we are looking for people who have that audacity, have that courage or have that alignment to the vision that he, we are here to change the world in some way or the other a, but change it for good. Um, and I think that is the most critical factor here. We've had people hired straight out of university. We also have people with 20 plus years of experience, but you know, where when you doctor to them you realize that they talk the same language and they understand that vision. Um, but it's been, it's, it's been extremely challenging. It's been extremely challenging. We have about people from about 15 different nationalities. So we scope for people from across the world who understand the vision and who want, who want to really make a change.
Speaker 1:
41:19
How about the future? How about you, you know, back to the people that end and you know, it's, it's a common question whether you are graduating or to be truthful. Also if you're 50, I mean if just picking an age, right? I mean let's say it's senior in your career because it's getting to a point where things are shifting. So quickly that you know, that, you know, maybe you are very experienced in something that might not be relevant anymore. What do you see in the next five, 10 years, right? In terms of skill sets, what should people, I mean, what should people focus on? What should you be learning or what type of, it can be soft skills. It can be hard to know, but maybe both.
Speaker 2:
41:55
Yeah, I think um, especially for a company like ourselves, which is going so fast, uh, in domes of a soft soft skills, let's see. First and I talk a lot to our, uh, youngers or team about this, um, is, um, a leadership and management because what has happened in the past as well is for us definitely. And I'm assuming for companies who have been revolutionary in the past, like the googles and apples of the world who grew fast and, um, where leadership positions come faster is I believe that it won't be a conventional company check fee where you would probably become a manager after five years and you probably have a team of 10 after 10 years, it will all come faster. So I think, um, uh, the leadership ability, um, the team management, et Cetera, would become extremely critical. What that also means is, and that is I think the slight a of a, of an issue, if I may put it that way, is that people need to be mature faster.
Speaker 2:
42:57
Um, but then you have the Instagrams and Facebooks of the world making it an instant gratification world and how maturity levels do go down, uh, because of these things at times. And we see it. Uh, I think people need to be mature. Foster people. You do absorb better. People need to be leading better. And I think that all needs to happen faster. So I think in terms of the soft skills, those are some of the things that we possibly look at. We look at people who are mature enough in what they're doing, irrespective of the age, et Cetera. Um, in terms of hard skills, I feel, again, it will be important and I try and teach myself this too. Um, not being an expert, but at least know about things. Like when we started the business, I didn't know much about fashion. I didn't know much about supply chain, but we've been on the ground for four years now.
Speaker 2:
43:41
Really learning what other problems or how really does an Iot work out what truly, uh, is a customer supply chain looking like? Uh, one thing I regret is I don't code, but I would love to. I think it's extremely important that you know, what people, other people in the company you're collaborating with are doing. Not probably to the extent that a CTO will know, but at least the basics. So I think it'd be important that you have a plethora of, uh, skills in terms of at least understanding what people are doing and be a mature leader.
Speaker 1:
44:10
MMM. Let's, let's, let's, let's take it personal and take it to you. Get this, come to yourself because you have, you have, um, you know, in four years you have grown tremendously with the company and you probably are a very good example of, of what it can, what did you know, what you just said? We know learning fast and maturing fast. Yes. What has been, what has proven to be some of the most successful things that taken you there? And also some of the challenges that you've gone through because I'm sure there's been both, right?
Speaker 2:
44:35
I think persistence is something, uh, I think, and it came to me immediately as you asked. I think it's not been an easy date. Um, personally also have failed multiple times. I have been to meetings where people tune me out that hey, you are, you are a small company. Who are you? I don't care. And what are you talking about and get out. And um, and uh, and there have been instances also where we've spoken to some of the biggest industry leaders and they've been extremely humble. So I think our persistence is first. Um, you can't sit and have a broken heart and be sad about things. I think you need to keep moving on. Uh, because to be frank, the best part about our voice today about the 20, 24 century today is that there are many opportunities. So there is no time to be disheartened and you need to keep moving on because opportunities are all going to dry down.
Speaker 2:
45:19
Um, and I think the second thing has been humility. Um, and [inaudible] I have y'all talk a lot about this internally, that we need to be a humble team because we've seen the biggest of the people because of the investors, because to be a business leaders being extremely humble and we've also seen a lot of aggressive people go down the back way. So I think that is something that is ingrained in the philosophy of the company as well. And that I take very seriously personally, that whoever you might become, uh, you need to stay humble because you are your to solve a mission, um, and the company and the mission matters more than who you are personally. And I think it's very important to know that.
Speaker 1:
45:54
Yes, yes. How about is the leader right? Then maybe a, maybe as a, as a principal or you, maybe you may, you may have a principal, you may have, I don't know, an advisor. What would be something that you would, apart from what you just shared, that you would, uh, that you would do as a leader consistently?
Speaker 2:
46:10
I think, oh, I would fail faster of a Cliche, but, uh, again, um, uh, giving a bit, a bit better example or, or more than tangible example of what that means really is that, uh, we have a lot of people coming into the organization who are, uh, top performers and they always want to deliver something to you, uh, which is 110% perfect and it doesn't work because things are moving really, really fast in times of sense. So you can't just be looking at quality of work. It has to be a quality of work plus time as another axis into this entire situation. And you need to realize that because if you can deliver to me something 100% creed after 10 days versus 80% in two days, I would prefer the first option. I think that is the biggest advice that I would love to give people that please don't forget about the time aspect of things because things are moving really fast. So, uh, perfection plus time, uh, need to work on in that.
Speaker 1:
47:08
Yes. Yes. Super. Well, I didn't thank you very much for the sharing, really, really insightful conversation and discussion and very, very, um, good examples and practical case studies. I'm sure that the audience took a lot, so appreciate you having us, uh, you know, uh, join, uh, joining us today and good luck in, uh, you know, in building the company even further. Brilliant. Thank you so much. Thanks. I appreciate it. Thank you for listening to a podcast. If you liked what you heard, be sure to follow us on Rhoda Paula, mario.com/podcast for all the show notes, links and extra tips covered in the interview. Make sure also to subscribe to our emailing list to get the news in the nick of time. If you're listening through a streaming platform like iTunes or stitcher and you like what we do, please kindly review and give us five stars so we can keep the energy flowing and get more people to find out about our podcast. I'm most active on Linkedin, so do feel free to follow me to stay tuned for our latest articles as well as future guests for the podcast. And if you have any suggestions or any other idea, please feel free to write to me. I respond to all, and also please make sure not to miss our next episode where we are. We'll be having a few on the c level and top leaders
Speaker 3:
48:14
change joining us. Stay tuned.
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