A Case Study on Cell Bazaar


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A Case Study on Cell Bazaar

  1. 1. BackgroundBangladesh‟s top mobile phone operator GrameenPhone, and USA-based CellBazaar haveintroduced a service connecting buyers and sellers in an electronic marketplace over the mobilephone. It‟s like a more direct, more primitive e-Bay, a phone-based equivalent of newspaperclassified advertisements. The CellBazaar concept was developed at the MIT Media Lab by KamalQuadir and he later founded a company and established a partnership with Grameenphone. Theservice enables sellers to list details of their products, produce or even services in a database whilebuyers can look for any of this information through SMS. It will not handle transactions, but issimply put buyers and sellers in contact with each other via mobile phone or PC.A Brief OverviewCell bazaar is a user-generated virtual marketplace, accessible by mobile phone or PC. Cell Bazaarworks through SMS code and messages; users enter the code 3838 and can post items to sell orbuy, as well as obtain market prices. This code can also be used to hear marketplace postingsthrough voice service, enabling users to browse by 8 categories: Jobs, Mobile Phones, Agriculture,Motorcycle, Car, Electronics, Computers, and To-Let. CellBazaar is also WAP-enabled (WirelessApplication Protocol), a “next generation” mobile phone technology that provides a faster way ofbrowsing the online marketplace. The marketplace is also available online for anyone with a webbrowser.
  2. 2. The success story of Mr. Kamal QuadirKamal Quadirs story is almost as interesting as CellBazaars. Born and brought up in Jessore, theworld of cutting edge business practices and innovation must now seem a long way from his roots.He says, “My childhood shaped this business in a very interesting way and the fact that it was notfrom the epicentre that is Dhaka is probably most of the story. When I w as young I would see allthese little ads in the papers and hear news of fruit, grain and agricultural products in general andhow people would be selling them at what seemed like ridiculously low prices, at times they wouldeven be bartered for other goods,” He always wondered why the prices would be substantiallyhigher by the time those products came to us, and probably more than that he was astounded byhow cheap the goods actually were. That process of thought was the seed that eventually took morethan 20 years to mature into what is now CellBazaar.Quadirs story does not just skip forward 20 years, it took almost two decades to nurture thoseinitial thoughts and his travels around the world actually shaped that. Quadir is quick to point outthat his father put a lot of emphasis on education. He attended university at Oberlin College, USA,studying an interesting combination of Art and Economics. The economics part he attributes to hisparents wishes, “no one wants to be paying through their nose for a sons education and eventuallysee that he is studying art. That concept is not understood, so I kept the economics part basically toadd legitimacy to my degree,” he says with a chuckle. In December 2005 almost exactly two yearsago, he started their journey; the first thing that needed to be done was to develop software whichwould turn his idea into reality. A Danish-American-Bangladeshi outsourcing company was hired toinitially develop the software, which subsequently has been internalized. Now the application is runand debugged entirely in-house. Initially the idea was to run the program via SMS, but then herealized the potential of the internet on mobile phones and soon started up a WAP or mobileinternet version. After that they developed the web version of the program, thus making it availableto everyone with an internet connection.The process is quite simple; when buying a product, the more specific one is about the search thefewer messages one will need. To have a look around simply SMS buy to 3838 to see thecategories and follow the instructions. To sell a product all one has to do is SMS sell to 3838 andthen follow the instructions again; it is a remarkably easy process and takes only a few minutes. Itis easy to understand why it has become so successful in such a short period of time. But there isone flaw in the whole system, which is that only Grameenphone users can buy and post through theSMS method. One massive advantage of the process is that people cannot use a fake number forphoney posts. That is a major problem faced by many of the up and coming auction websites inBangladesh. Sites such as ClickBD and bracNet suffer from a deluge of fake posts, sometimesputting down absolute strangers numbers and other times putting down numbers that do not evenexist.
  3. 3. : A market in your pocketCellBazaar is an electronic trading forum that enables anyone with cell phone to conducttransaction through its online platform. Launched in 2006, the US-incorporated company nowboasts more than a million users in Bangladesh. Originally developed as a classroom project byKamal during his days at the famed American educational institute MIT as a graduate student, theconcept of CellBazaar has proved to be ideally-suited for developing markets with low internetpenetration. CellBazaar experience has shown that widespread availability of mobile phones couldprove to be an ideal alternative, compensating for low internet density that previously was thoughtto be essential for any online business transaction. The idea has widely been acclaimed byinternational experts as a model of bringing the benefits of e-commerce to the doorsteps of thirdworld rural populace through a simple mobile phone handset. CellBazaar‟s method of providingservice has been a bit unconventional from the traditional business point of view. It does notactually conduct transaction but simply puts buyers and sellers in contact with each other viamobile phones. Signing in CellBazaar or posting any items on it is free of cost. One exclusive aspectof CellBazzar is that for the first time it has provided a window for the farmers or producers ofagricultural products to directly negotiate prices with their customers and agro-processors. Thus, ithas come as a sort of alternative for the country‟s isolated and uninformed farmers and traders whohave little bargaining power to get rid of the exploitative middlemen. With the introduction ofmobile commerce in the government pipeline, local experts believe that CellBazaar and its existingusers would definitely have an edge over its competitors in the changing scenario. However, theywere also skeptical on the issue of security and transparency of transaction through such a mediumin the Bangladeshi context.Buying Selling ProcessCell Bazaar is a service where mobile phone used as a 24 hours electronic market place. In CellBazaar Sellers can post their product information to sell and buyers can search their desiredproduct to buy, using their mobile phone.Sellers use their mobile phone interface to post goods they want to sell. This information is storedon the central server. The sellers have the ability to - o Post them o Change or update o delete the listed good after saleBuyers use the cell phone to search for the goods they want to buy. They have the option ofoptimizing their search by -
  4. 4. o They have the option of optimizing their search by Price, brand and location o They can bookmark favorite items and return to them laterOnce a buyer identifies a likely item, the buyer uses the application to contact the seller by SMS ora direct phone call. After reaching an agreement, buyer and seller meet to close the deal.How it works?CellBazaar works on four synchronized platforms - SMS : CellBazaar service can be availed by sending SMS to a dedicated port “3838” from all basic mobile phone. WAP: GP subscriber can avail the same service through their WAP enable handset browsing wap.cellbazaar.com with easy graphic interface WEB: CellBazaar is also available in WEB www.cellbazaar.com. Buyers and Sellers with internet facility on computer can also avail the benefits of CellBazaar („seller‟ need to be a GP subscriber). IVR: Convenient for customers to listen to the latest posts by dialing “3838” and take buying decisionPlatforms SMS SMS (Short Message Service) has been phenomenally popular since its introduction in Bangladesh. CellBazaar leverages the simple, widespread power of SMS to bring the market to your phone. By sending simple text messages to 3838, you can post items for sale, look for items to buy, and obtain current market prices of products or services. WAP WAP (Wireless Application Protocol) is the next generation of mobile phone technology. 12% of all mobile sets in Bangladesh are already WAP-enabled, and this number is growing rapidly. WAP provides an even faster experience as you browse a simple graphic menu to access the entire marketplace.
  5. 5. WEB WEB version shows the entire market at a glance on computer screen. Anyone with internet access can browse the market, and post items for sale. Items posted by WEB, WAP or SMS are instantly visible to users of any platform. WEB platform also makes the local mobile- based market available to an international audience. VOICE Any Grameenphone user can dial 3838 and listen to the latest items on the market in Bengali. After dialing 3838, users choose from 8 categories: Jobs, Mobile Phones, Agriculture, Motorcycle, Car, Electronics, Computers, and To-Let. Every few hours, users will hear new information through this service.CoverageWhat is most interesting about CellBazaar is that it is not Dhaka-centric, there are currently roughly10,000 items listed in over 60 different locations around the country, from Lakshmipur to Pirojpurto Magura and even in the remote areas of Kurigram. This is where the idea really comes to life, ithas the possibility to connect the nation in a way no one could have even thought of before, theoverbearing middlemen who hike up prices could be done away with and personal finance could behandled from ones own pocket.ConnectivityAlthough 75% of Bangladesh‟s population has no access to electricity and Internet penetration isonly 0.03%, CellBazaar has more than one million users. A quarter of them use the service on aregular basis, with about 550 new items posted each day. Almost all of that is by mobile phone,though CellBazaar also offers an online platform.CellBazaar empowers the rural community by giving access to the population where even electricalpower fails to reach and bring the market into the palm of their hands. The service allows forgreater transparency for traders such as farmer and fishermen to get better pricing for their goods.CellBazaar gives the rural community better access and leverage into the market. As a result, arecent research report found that 59% of the postings made on CellBazaar are from rural areas.PartnersGrameenphone is Bangladeshs leading telecommunications service provider with more than 18million subscribers. It is a joint venture between Telenor, the largest telecommunications serviceprovider in Norway with operations in 12 other countries, and Grameen Telecom Corporation.Grameenphone has always been a pioneer in introducing new products and services in the localmarket. GP was the first company to introduce GSM technology in Bangladesh in 1997. CellBazaar isGrameenphones exclusive provider of community-based, user-generated product & service marketon the mobile phone, via SMS and WAP technology.
  6. 6. Grameenphone Community Information Center (GPCIC) is a shared premise; where the rural peoplecan have access to wide range of state of art services such as Internet, voice communications, videoconferencing and all other information services. Set up with technical assistance from the GSMAssociation, the Grameenphone Community Information Centers (GPCICs) are equipped with theminimum of a computer, a printer, a scanner, a web cam and an EDGE-enabled modem to accessthe Internet using the EDGE connectivity.Katalyst aims at poverty reduction via private sector growth, mainly through small & mediumenterprises (SME) development. KATALYST is funded by DFID, SDC, Swedish Sida and Canadian CIDAand is implemented by Swisscontact and GTZ International Services and works together with theBangladesh Ministry of Commerce.Thakral is a Joint Venture between the Thakral Group of Singapore (operating in 30 countries) andEsquire Group of Bangladesh. Thakral is IBMs exclusive representative in Bangladesh and works onsoftware development on mainframes, data warehousing, etc.BracNet provides enterprise organizations with a high-speed dedicated Internet access via a CiscoPowered backbone engineered for mission critical data. It is an affiliation of Brac, the world‟slargest non-government organisation.BRAC Bank Limited, with institutional shareholdings by BRAC, International Finance Corporation(IFC) and Shorecap International, has been the fastest growing Bank in 2004 and 2005. The Bankoperates under a "double bottom line" agenda where profit and social responsibility go hand inhand as it strives towards a poverty-free, enlightened Bangladesh.Prothom Alo is Bangladeshs largest circulation Bengali language newspaper and a key influence oncultural trends. CellBazaar provides Prothom Alo classifieds on the mobile phone.The Daily Star is Bangladeshs largest circulation English language newspaper. CellBazaar providesDaily Star classifieds on the mobile phone.
  7. 7. Service in BangladeshGrameenphone launched the CellBazaar service in collaboration with the company CellBazaar Inc.in July 2006. CellBazaar Inc. was founded in 2005 with the concept of “CellBazaar” developed at themedia Lab of Massachusetts Institute of Technology (MIT).The major objective behind the Cell Bazaar service concept is: Create an electronic market for buying and selling through mobile phone Leverage mobile as the most widespread communication device in developing world Overcome the digital divide by using the mobile phone as a computer Work as a Market Transformer and M-commerce Facilitator Provide first data-use experience to mobile users and prepare them for 2d-generation technology Give a birds-eye-view of the market and Information hub for sellers and buyers. Bring GP subscribers under a common platform of buying & selling Connect the isolated and uninformed segment to the hub of information Provide a compelling value-added third generation service to GP users Contribute to economic development of farmers, traders and businessmen Give 24 hours market information in CellBazaarService Cost & Benefits for Customer BenefitsBuyers Birds-eye view of entire market for comparison of prices, product etc. Comparison shopping without having to travel to marketsSellers „Mobile is the Shop‟, without spending any money on infrastructure Bypass middlemen and go directly to buyer, increasing gross revenue Less risk of bringing goods to marketBuyers & Sellers:Gathers market information to make smart business decisions
  8. 8. Cell Bazaar Users Students Businessman Housewife FarmerSuccess StoriesS e lle rSeller: Nuran Nabi, Rice seller, Location: Dinajpur Nurun Nabi sells rice, via his rice warehouse andshop in Dinajpur. He has started posting rice information on CellBazaar and received phone callsfrom rice mills in Dhaka region. Now Nuran Nabi is selling Rice to the buyers of Dhaka region. Hemet CB team at Dinajpur CIC and expressed his enthusiasm for the service.BuyerBuyer: Md. Ferdous Sheikh, office employee, Location: Dhanmondi Mr. Ferdous was looking for carfor 3 months through traditional channels and also visited several traditional channels. And finallystarts visiting CellBazaar for 2 months and found Toyota Starlet, 1989 model, Dhaka Metro 110623,for 3 lakh Taka. The sellers Mr. Matiul Haque Farooque received 60 calls until evening on the day ofposting. The buyer Ferdous Sheikh called at 4:30 pm and after negotiation they closed the deal in2.5 lakh.
  9. 9. MarketingTelevision AdCellBazaar launched their second television campaign during Eid 2008. Featuring a middle classDhaka family, tired of their old TV. Will they break into Bank of Joba, will they collect enough moneyto buy a new TV? CellBazaar service to the rescue: by selling the old TV to a buyer on CellBazaar,they now have enough money to buy a new TV. This advertisement is also the marketing debut of3838 Voice service.CellBazaar launched their first television campaign during Eid 2007. Featuring a newspaper sellercalled Shamsu Hawker, who begins a new career buying and selling used televisions via CellBazaar.The advertisements unusual setting on a train, as well as positive imagery of Bangladesh, created asensation among TV viewers. The character "Shamsu Hawker" has become a nationally recognizedicon and popular cultural figure.StickerCellBazaars grassroots marketing has created top-of-mind share all over Bangladesh, using theubituitous car, taxi and microbus. Our stickers are now the most visible piece of marketing in thecities. DAILY STAR, in their recent cover story described our marketing strategy:"They seem to be everywhere without obtrusive ads, and that definitely must be a first forBangladesh."BookletsCellBazaar has launched educational booklets for four target audiences: villagers & farmers, old &retired, young professionals, and tech-savvy teenagers. There are detailed booklets for those whowant step-by-step instructions, as well as short leaflets for customers who want to carry a "quickguide" in their pocket. Available at all Grameenphone centers across the country.BillboardOn the occasion of CellBazaar winning the 2008 GSMA award in the category of "Best Use of Mobilefor Social & Economic Development", Grameenphone launched several billboards in the capital city.Focusing on Corporate Social Responsibility (CSR), the billboard thanked the people of Bangladeshfor using the CellBazaar service and making it popular, which resulted in this internationalrecognition.
  10. 10. Awards The Tech Museum Award 2007 Telecom Asia Awards 2008, in the category of “Asian Telecom Innovation of the year” 3GSMA Global Mobile Award, 2008 in the category of “Best Use of mobile for social and economic development” The Manthan Award South Asia 2008, in the category of “Best e-content development”MANTHAN Award 2008Digital Empowerment Foundation and the World Summit Award (WSA) are organising together withthe Center for e-Governance, the South Asia Conclave on ICT & Digital Content for Development aspart of efforts to strengthen the Digital Content Movement in the countries of the region.The strategic direction of WSA is to strengthen the digital content industries and the creativedevelopment in the region. WSAs plan up to 2015 foresees a myriad of innovative content in fixedline and mobile Internet applications. WSA takes great pride at leading this vision thanks to thecooperation with the Manthan Award, which now proactively encompass the entire South Asia forthe World Summit Award.GSMA 2008CellBazaar received GSMA Global Mobile Award 2008, in the category of "Best Use of Mobile forSocial & Economic Development." The GSMA Global Mobile Awards are the Oscars of the mobilephone industry that serves a third of the worlds population. TheGSMA represents a stage for allplayers in the mobile world to attract the attention of their peers and the global media.Founded in 1987, The GSM Association (GSMA) is a global trade association representing more than750 GSM mobile phone operators, and 180 manufacturers and suppliers across 218 territories andcountries. Members represent more than 3 billion GSM and 3GSM connections - over 86% of theworlds mobile phone connections. The GSM Associations Board comprises top-levelrepresentatives of some of the worlds leading mobile operators, such as AT&T, China Mobile,Orange, Telefonica Moviles, T-Mobile and Vodafone.CellBazaar received "Asian Innovation of the Year" award at 11th Telecom Asia 2008. This is thefirst year that Telecom Asia presented an award for Innovation.The other nominees in this new category were mChek from Bharti AirTel (India), M-Money fromMaxis (Malaysia) and Globe Telecom (Philippines), Mobile MiniPC from SK Telecom (Korea), Recallfrom Idea Cellular (India), and X-Series from Hutchison 3 (Hong Kong).
  11. 11. ChallengesOne of the challenges that theyve faced is introducing CellBazaar into the daily lives and setroutines of the Bangladeshi people. Many people had trouble conceptualizing the idea that theyhave a worthy item to sell, and that a few simple text messages can connect them to a virtualmarketplace. In the past, a rural village person couldnt even imagine that they wanted to sellsomething and the whole world would be willing to buy it. The biggest challenge they have ispeople blocking that audacity and courage. So far over a million people have used the service sincelaunch. Bangladesh is a country of 150 million people. Fundamentally the real issue is aboutchanging peoples patterns and if once they learn how to use it, they‟ll start doing it reallyfrequently.Some might say Cell Bazaar is only for the educated, because it requires a certain level of English tobe able to use it. It is a correct statement in many ways and then again it does not wholly justifyitself. At CellBazaar they have found out that most SMSs made come from Polli-Phones (a mobilephone service for the villagers by GrameenPhone) with prepaid sim-cards that offer special dealsfor young people and then finally post paid users in that order. If that is truly the case then a simplelisting should not be that tough to make, but over and above the education barrier is the fear oftechnology barrier. There is a common acceptance that technology is only for the young people andonly they know how to use it, but that misconception must be shattered if we are to truly advancetechnologically. For ideas like CellBazaar to truly work the nation must come along for the ride,educationally and technologically, both the country and the company stand to benefittremendously.CellBazaar has its intricacies as well, as mentioned earlier people often sell more than one item butonly understand enough to list one item. What happens then is that when the call is made to inquireabout one item, the potential customer is told about all the other items for sale. Also one post canbe valid for quite a long time because things like fish and livestock, their stocks are constantlybeing replenished and the market price is always fluctuating. This means one can adjust the price inones post to suit the market price as well as keeping the post alive so that people will continue tocall. What was interesting was that many people did not know they could adjust the prices of theirposts, as one wholesaler was surprised by the price that was listed in for his onions, a post he mademore than 6 months ago. Logically with prices quite low now, one could have seen his old post at ahigh price and would not call him because of that. These are a few areas the company could lookinto, keeping their users updated.
  12. 12. Entrepreneur DevelopmentCell Bazaar is associated with afoundation called AQF, a family-runassociation which is involved in at leastrecognizing and help promotingBangladesh entrepreneurs and theirinnovations, ideas, if not being able topatronize it. Cell bazaar seems to haveidentified the core problems faced byinnovators and entrepreneurs in Bangladesh and they are doing their bit to help them.CellBazaar enables entrepreneurs and small businesses to provide products and services to millionsof people in Bangladesh through a mobile phone-based electronic marketplace. It gives anopportunity to entrepreneurs to start and grow operations in a market that wouldnt otherwise beavailable in their local community, thereby creating jobs, stimulating the economy, and deliveringproducts and services that improve the lives of millions of poor people.The CellBazaar marketplace is available to more than 25 million people in Bangladesh, includingfarmers that use the service to sell their harvest at fair market prices and struggling students thatfind and connect with tutors.Some Negative Aspects Experts argue that Cell Bazaar have a number of competitive advantages over rivals like ClickBD and Bracnet where the latter parties face major problem of phoney posts with fake phone numbers. But there could be a case of fraud which makes people scared. Some critics also argue that the CellBazaar concept has very low user retention rates, meaning they have very high number of first time users who eventually don‟t stay with them in future. As part of the Digital Bangladesh initiative, the government is looking at authorizing m- commerce (that is money transaction through mobiles). CellBazaar will have a tested platform and a constantly growing user base that can be the first users of m-commerce. But still this concept is new for the people of Bangladesh and there is always a point of the “matter of trust” which is very difficult to build in the minds of consumers.
  13. 13. Future Plans Cell Bazaar is planning to start grooming its brand ambassadors in a systematic fashion. This should be led by initiatives by the government, the media and the business sector. Cell Bazaar needs to choose the brightest young entrepreneurs in the perspective of Bangladesh, and leverage their global standing to bring in good attention to Bangladesh Cell Bazaar must deploy the brand ambassadors to attract positive attention, good media, business interest, new partners and financial investment from the world. Individual success stories will drive this phenomenon, and therefore it should deploy those successful entrepreneurs as the frontline for Bangladesh‟s message to the world that “We the Bangladeshi‟s are eager to be part of the global family of successful entrepreneurs”. We are in the Asian century, and Bangladesh can have a seat at the table and a stake in the digital future. We can secure that space and establish Bangladesh as a brand through global digital projects from Bangladesh such as Cell Bazaar.CellBazaar looks for overseas expansionCellBazaar, the country‟s pioneering mobile phone-based online marketplace, is setting its sight onneighboring countries as a way of possible overseas expansion. It‟s award-winning founder Mr.Kamal Quadir said his three-year-old company has already been approached by at least two majortelecom operators from India and one from Pakistan as part of potential tie-ups. He said over thenext six months the company would hold talks with potential suitors as the company plans toreplicate its success stories in other developing countries. However, the key challenges are alwaysadapting to local needs. But fortunately, CellBazaar‟s core platforms, SMS, WAP, WEB, use a corewhich is programmed in English, with an add-on layer which is in Bangla. Kamal said his companysees no problem in winning new markets. The way their add-on layer is built, adapting to newlanguages will be relatively easy. Another key aspect will be to build a database that is tailored forthe geographic spread.
  14. 14. : New Idea DevelopmentIdea No: 1Cell Bazaar can introduce a mailing system in which their can a option of auto reply systemwhenever there is match of criteria and preference provided by both the buyer and sellers-theyboth can be sent an e mail notification( as provided by the job portals usually). In this way the sellerand the buyer both can be benefitted. It can be call from the Customer Service Center maintainedby Cell Bazaar who will notify the seller and the buyer .For this purpose Cell Bazaar can either useautomated software or maintain a Customer Service Center.Idea No: 2Cell Bazaar can create a different dimension in customer care in very dynamic segment with thehelp of Grameenphone Community Information Center (GPCIC). It is a shared premise; where therural people can have access to wide range of state of art services such as Internet, voicecommunications, video conferencing and all other information services. The Cell Bazaar and GPCICcan work together. The companies can provide their requirement of raw materials from varioussegments of Bangladesh and with the help of GPCIC it can be communicated to the farmers. In thisway the farmers can negotiate their price with the companies and the companies can get manyoptions from which it can select the best offer without any intervention.
  15. 15. ConclusionCellBazaar is an electronic trading forum that enables anyone with cell phone to conducttransaction through its online platform. Launched in 2006, the US-incorporated company nowboasts more than a million users in Bangladesh.It does not actually conduct transaction but simply puts buyers and sellers in contact with eachother via mobile phones. Signing in CellBazaar or posting any items on it is free of cost.CellBazaar‟s main aim is to provide their customers with the best deal available in the market andto serve the customers better through their website. They are constantly adding more products tomake it easier according to the consumer needs.CellBazaar experience has shown that widespread availability of mobile phones could prove to bean ideal alternative, compensating for low internet density that previously was thought to beessential for any online business transaction. The idea has widely been acclaimed by internationalexperts as a model of bringing the benefits of e-commerce to the doorsteps of third world ruralpopulace through a simple mobile phone handset.Over the last year, CellBazaar has grown rapidly; it now has 1.5 million users and averages 90,000hits a day (including page views and SMS messages), 600 new items daily and 688 categories. Itsregistered seller base is 51,000 and its unregistered user base is thirty times that size. The diversityof products posted has resulted in constant innovation and change. As the company grows andmatures, it looks set to be the first Internet model start-up in Bangladesh‟s history, with globalmedia interest, local imitators, overseas expansion plans, and international-standard managementand staffing.CellBazaar reinvented the use of mobile in Bangladesh and gave the possibility to virtually anyonepossessing a mobile to buy and sell products at reasonable prices for both parties. Giving peoplethe possibility to use different platforms allowed Cellbazaar to overcome problems of isolation,literacy and even disability.