Supply chain management of street food in Bangladesh

SUPPLY CHAIN MANAGEMENT IN STREET FOOD
VENDORS: A CASE STUDY ON AZIMPUR AND DHAKA
UNIVERSITY AREA.
Supply Chain Analysis
NOVEMBER 30, 2019
THE SMARTINIES

CONSUMER SATISFACTION ANALYSISIS
Department of Marketing. University of Dhaka. PAGE 1
Supply chain management in Street Food Vendors: a Case
study on Azimpur and Dhaka University Area.
Submitted to:
Dr. Nasrin Akter, Professor.
Department of Marketing,
Faculty of Business Studies
University of Dhaka.
Submitted by:
The Smartinies
Section: A
Department of Marketing
Submission Date: 30-11-2019

November 30, 2019
Dr. Nasrin Akter,
Department of marketing.
Dear Dr. Nasrin Akter Ma’m,
As agreed, on the 2nd
of October, we are submitting the attached report entitled “Supply chain
management in Street Food Vendors: a Case study on Azimpur and Dhaka University Area.” This
report examines the supply chain behavior of the street food vendors in the area of Dhaka University
and Azimpur and interprets the result with simple terms.
I hope you find this report satisfactory.
Sincerely yours,
Khondoker Sadman Sakib,
A representative of The Smarteenies.
MKT-322, Sec-A
Department of Marketing.

Acknowledgments
We cannot express enough gratitude to the almighty for giving us
enough strength to finish this report.
Our completion of this report could not have been accomplished
without the support of the team members, Sami, Tisha, Anif, Eva,
Rimon Thank you for your heartiest efforts.
And finally, we offer respect to the teacher who gave us this task and
guidance, Dr. Nasrin Akter.

Group Profile-Smartinies
Name ID Email
Khondoker Sadman Sakib JH-26-093
Shadmanankon5@gmail.com
Tisha Chakraborty SK-26-013
Tishackb51@gmail.com
Anif Nawaz SM-26-085
anif.nishad@gmail.com
Eva Das RH-26-047
daseva25@gmail.com
MD. Raihan Uddin ZR-26-248
rimon.raihan77@gmail.com
Rafiur Rahman Sami ZR-26-05
rrsami40@gmail.com
Thay Thay SN-26-01 thaythaydu@gmail.com

Contents
Introduction...........................................................................................................................................6
Industry Analysis: An Overview of the Condition of the Street Food Business in Bangladesh........7
Supply Chain Overview: The blend Theoretical Aspects with the Primary Research .......................8
Shop Size............................................................................................................................................................................... 8
Shop Display......................................................................................................................................................................... 8
Product Category ................................................................................................................................................................. 8
Inventory Management......................................................................................................................................................... 9
Transportation...................................................................................................................................................................... 9
Material Handling ................................................................................................................................................................ 9
Distribution......................................................................................................................................................................... 10
After Sales Service.............................................................................................................................................................. 11
Growth................................................................................................................................................................................ 11
Strategic Implications.........................................................................................................................12
Trends with strategic importance:...................................................................................................................................... 12
Challenges .......................................................................................................................................................................... 12
Opportunities...................................................................................................................................................................... 13
Future ................................................................................................................................................................................. 13
Conclusion...........................................................................................................................................14
References ...........................................................................................................................................15

Introduction
Street food refers to the food that people purchase from the street and mostly consumes them at the
street sides (Streetfoody, 2019). The street food business has been a growing industry since the last
decade. The business is formed of a decentralized supply chain system with mostly sole proprietors at
a different level. In this report, an analysis of the street food businesses of Azimpur and Dhaka
University’s supply chain system has been made. Azimpur and Dhaka University are two of the well-
recognized area of Old Dhaka. Like other places of Old Dhaka, These two places also full of popular
roadside food stalls. Because of popularity among students and local citizens, street food stalls are
increasing here day by day. This results
in more competition among the street
food businessmen. At this moment,
there is more than 200 street food
business in Azimpur and Dhaka
university. Although, 75%-80% of
them are mobile. Almost 60% is doing
these businesses for more than 5 years.
The rest of them are younger (Daily
Sun, 2019). The data in this report was
mainly collected from primary
research on the street food vendors of
the mentioned places. But some
secondary insights were also taken
from different sources. The aim of this report was to understand the supply chain condition of street
food businesses in Azimpur and Dhaka University. It was also a major target to identify the possible
opportunities in the growth of this industry.
Street food vendors are recognized by their signature food
carts.

Industry Analysis: An Overview of the Condition of the Street
Food Business in Bangladesh
Street foods have always been very popular and appealing to food lovers in Dhaka- the capital city of
Bangladesh (The Daily Star, 2019). Because of street food availability, unusual and good taste, and
cost-friendly attributes, it is popular among all classes of people. But the majority of the customers of
street foods have been identified as students, job holders and lower-class people who cannot afford
pricey foods. Street foods have been identified as the second-largest source of employment after
rickshaw pulling in the Dhaka city and there’re more than 3,00,000 street food stalls in every nook and
corner of the Dhaka city. The stalls are usually set up in vans or small space in the footpaths. The
vendors or owners of street food businesses are mostly poor or lower-class people within the Dhaka
city or they have come to Dhaka from
the rural areas to earn a living (Islam
et al., 2019). The food items that
street food includes are mainly-
Samosa, Shingara, Chap, Kabab,
Noodles, Fried Chicken, Chola,
Pitha, Juice from various fruits,
Fuchka, Chotpoti, Panipuri,
Jhalmuri, etc. Though the overall
growth of the street food industry is
on the rise if we consider the
individual street food vendors then
their sales growth is reducing slowly
because of the higher competition in the
market. But the popularity and preference of street foods among the customers never reduce. Rather
the demand has been increased as people are more work-oriented these days and have less time to
make food in their own house. But there are people who do not prefer street foods at all because of its
unhygienic and health-hazardous attributes (Khairuzzaman, et.al., 2014). The reason why people are
attracted to street foods has been identified as convenience, availability, taste, aroma, variety, cheap,
taste and attractiveness. As the population of Dhaka City is around 18 million, so the market
opportunity is huge for the street food vendors to conduct their business. And the high demand for
street foods is an opportunity for them to avail profitability.
Street foods are widely popular among children

Supply Chain Overview: The blend Theoretical Aspects with
the Primary Research
Supply Chain Management is an integral part of business organizations. It is no different for small
entities like street food vendors. Despite being a small entity, the supply chain system of the street
food vendors, possesses a great level of importance. The primary data collected from the Azimpur and Dhaka
University area has been analyzed on the basis of the supply chain system-
Shop Size
As maximum street food's shops are small and moveable, it needs small or less space for this kind of
business. People use a van or moveable vehicle for running their business. As many of them don't have
any real shop at all, they have to walk the whole day to sell their products. Also, they carry their things
on the heads, sometimes in their hands and at some other times in small hand-cart. So, the average size
of the street food shop in Azimpur is 4.5 by 5.33 feet. Though the average size is quite small the
maximum and minimum size are respectively 8 by 7 feet and 3 by 4 feet.
Shop Display
Most of the food carts are very interesting in terms of decoration. They may not have enough space,
but yet they maintain an interesting look. They often use multiple colors for decorating the shops.
Sometimes they try to catch the customer’s eye by setting fancy pictures. They often use funny or
catchy types of the name for their food cart. Some food cart decoration really gives pleasure to the
eyes.
Product Category
From the various types of products, sold by
the vendors, we have determined these three
categories of products-
1)Fast Food: Noodles, Chola, Jhalmuri,
Chicken Chaap, Gorur Chap, Jali Kabab, Shik
Kabab, Tikka Kabab, Shami Kabab.
2)Beverage: Papaya Juice, orange juice,
Pineapple juice, Sharbot, Chaa, Doi Chira,
Dudh Kola Chira.
3)Sweet and Pitha: Kalojam, Roshmalai,
Pudding, Roshgolla, Chitui Pitha with different
vorta.
Street food vendors are upgrading their menu
items with recent surge of Fast food.

Inventory Management
Most of the businesses buy their materials on a daily basis from the specific or non-specific sellers.
The storage of inventory depends on the nature of their products. 60% of them use mostly perishable
raw materials and they usually do not store their raw materials. They buy their raw materials on a daily
basis depending on their estimated sales per day. Those who use dry raw materials buy their material
on 3 days to a weekly basis and store those in their own houses (#Foodiez, 2019). As usual, there is
hardly any expertise seen in the case of inventory management of these small businesses. Among the
street food stalls, hardly any business keeps documentation of inventory. As their businesses are small,
it’s very easy to keep track of their inventory without documentation. So, almost all of them trust their
own memory to keep a record of their inventory information.
Transportation
Transportation can increase the costs of the businesses
as most of the businesses carry inventory on a daily
basis. Most of the businessmen live near their working
place so that they face fewer problems in case of
transportation and can reduce their lead time as well.
In the case of mobile stalls, they carry their materials
on their own or using their own cart or van (Daily Sun,
2019). Most businesses use cobbler to transport their
materials and products or do this job on their own to
reduce costs. The rest of the businesses use van,
rickshaw and other light transportation, especially
those who sell cooked food.
Material Handling
Material handling is the movement, packaging and protection, storage and control of materials and
products throughout manufacturing, warehousing, distributing and consumption. It is basically related
to inventory management and control. Here, the shops are very small and their sales are also limited.
For this reason, they prefer to buy materials day to day basis. Also, they buy those materials from the
local market. So, they don't need to buy a bulk number of products for inventory. If they do so, they
keep some of the materials at home and rest in their van for fulfilling the customer's demand. They
don't use any warehouse for maintaining inventory as their business scope is limited.
The cart is also used to transport the
materials needed for cooking from bazaar.

Distribution
Variety, taste, cost, attractiveness, and convenience are the reason of eating street food. They are cheap
cost readymade food suppliers. The street food businesses are sole proprietorship type business. They
collect their necessary raw material from nearby suppliers. Mostly, they collect raw materials from
Kawran Bazar, a well-known wholesale market in Dhaka City, at a cheaper price. For example, The
Rotzaa sells tacos, chicken shawarma, burger, hotdogs, and spring rolls. In selling all those foods, they
require chicken, flour, carrots, different sauce, oil as a raw material. They buy their products on the
basis of daily requirements. Then, they process it and sell it. They have a cart where they put all the
raw materials and beside the cart, a stove is installed where all the food is processed. But there was no
table system that exists. All customers have to eat food standing near the cart. There was no inventory
cost because they buy raw materials on a daily basis. So, they don’t need to store it in a warehouse.
Their transportation cost is medium as they buy raw materials from nearby wholesalers and using
normal local transport. Their
handling costs also small. They don’t
need any kind of investment for
information because they can get
information by measuring their daily
sales. As they provide varieties of
food items, customer experiences are
good. They need 2.30 hours to
produce their food items. One more
example is Master Kitchen where
singara, samosa, noodles, and bun
are sold. They collect potatoes, flour,
noodles from local wholesalers and
they bring it to the cart by using
normal transportation. They bought it
on daily basis. Their transportation
cost is small because they collect necessary raw materials from nearby suppliers. They buy products
on a daily basis so they don’t need any warehouse to store them. Therefore, their inventory cost is also
low. They have no facilities cost and material handling costs. A small business can run on estimation.
And their food items are kind of convenience products for local people. Another example is Manifold
Coffee. They sold different types of coffee and smoothie. They bought Milk, Coffee Powder, Sugar,
Coffee Syrup, Pesta, Strawberry, Oreo, Kit-Kat chocolate from New Market. They bought it on weekly
basis. As they buy it for a weekly basis, they need to store until the next purchase. So, they need a little
inventory cost. Recently they reduce the price of hot coffee and cold coffee because they found that
nearby coffee sellers are selling coffee at a lower price. As it’s a price-sensitive market, the seller
reduces its price from 50tk to 40tk. He also reduces the amount of coffee by providing it in a smaller
cup than before. They collect plastic glasses from the Nilkhet wholesaler. As customer experiences are
increasing day by day, the business has expanded much more than before.
Some food carts are located near office spaces to target
middle aged man when they are out for a smoke.

After Sales Service
In the street food business, after-sales service is
not a very common task. As many street food
vendors sell through their movable vans, the
option of the after-sales service becomes
relatively lower. Most of the street food business
is not involved in providing after-sales service.
Most of the owners said that our task is providing
food according to their order, so there is a limited
chance to provide after-sales service. But some of
them told different talk. One of them told that if
any customer said their food is rotten than they
take it seriously and take a proper replacement.
The owner of Saltu Mamar Dawat said he
provides sauce with a burger, pizza, and other fast
food as much as the customer wants. The most
important thing they maintain a personal
relationship with their customers so that they visit
frequently to their food cart. In terms of their
familiar customers, they try to provide their best
service.
Growth
Last year, at least 40-50 business is initiated while 20-30 left businesses for different reasons and
issues. In the case of famous street food outlets, sales are increasing because of social media impact
and other trends. Those who are in the bottom line of the competition accused new competitors of
decline or an increase in the lower margin. As the same kind of business is increasing so as the
competition, their customers are being spreader among a large number of competitors (Foodiez, 2019).
This results in a decline in the growth of these businesses. So, the number of businesses is increasing
but a number of successful businesses in terms of growth are still limited.
You can ask for additional spice or sour sauce,
it’s free. But that’s about all the after sales
service you can expect.

Strategic Implications
Trends with strategic importance:
1. The transportation of goods from the supplier is done by the seller himself.
2. The cost of transportation is almost nonexistent because the sellers are used to carrying the goods
on their cart or by the rickshaw they use for their own transportation.
3. Inventory management is viewed as unnecessary because the sellers have a “sell less but not
waste” mindset.
4. Account management is viewed as irrelevant because the sellers calculate the profit by the
calculation of (how much I spent this morning - how much I have in my box now).
5. A food cart operates with very little investment of below 3 thousand tk daily cycle.
6. Paying a supplier or deliveryman or any kind of intermediary is unimaginable for the food cart
owners as they have an extremely narrow margin.
7. This line of work is chosen as better than doing nothing or begging.
Challenges
Competitor: Recent brand chains like Kazi farms
kitchen, CP, 2go are focusing on hygiene and
environment more than the carts ever could. Which
is taking away a considerable amount of consumers.
Lack of public trust: The new and aware consumers
are more health-conscious. They are concerned
about the hygiene of the food served. The food carts
have not adapted to these changes and are rapidly
losing public trust.
Lack of legalization: Most of these shops are
situated on roadside walkways, government
properties. As a result, they are often extorted by
corrupt law enforcement officials or local hooligans.
Well decorated, healthy, hygenic and still
street side! kazifarms kitchen and cp may be
what the future of street food looks like.

Insufficient funds: lack of funds is the main problem for food cart owners. They came to this very
low -skill ceiling and low-income business because they have no money to start actual shops.
‘’a shop needs 5 lakhs just to decorate, if I had that much, I would not be operating a
food cart, I would be owning an actual restaurant”-says Mr. Jahangir
Limitations of a one-man business: The obvious limitations of a one-man business applies here too.
The shops are not able to serve too many customers at once. And serving needs to halt whenever any
material need processing.
Opportunities
Microfinancing: What these food carts need
most is financing. Before any kind of change or
service is offered to or from them, they are in
dire need of some additional capital.
Centralization: It is possible to train these cart
owners in the latest practices of services and
bring them under one umbrella of a brand name.
Providing them certificates that can showcase
their trustworthiness to the customers can be a
good step in bringing everyone back. However,
that will also have some downsides which need
to be considered carefully.
Revising individual brand image: Next in line
waiting for food cart businesses is revising their
brand image to match the modern consumers.
Cleaner carts, planning a brand, hygienic
practices and choosing better locations can greatly help improve the brand identity of these food carts.
Future
Unless the food cart owners make a drastic change to their service image and hygiene practices, they
may soon go extinct. But some owners are catching the hint and adapting accordingly. Individually
branded food carts are becoming more common.
” From 2009 to 2016 the most profitable business I did in my cart was making noodles, but now
people don’t eat noodles from carts like ours, they go to fancy restaurants”
The rotzza revised it’s brand image with modern
practices and foods.The owner uses gloves when
preparing food to appeal to the customers with
hygiene sensitivity.

Conclusion
Marketing communications have led to the growth of junk food in Bangladesh by a great margin. With
the increasing number of fast-food businesses, the number of street foods is also improving at a high
speed. Now in this report, we have analyzed primary research on the street food vendors of Azimpur
and Dhaka University area on their supply chain behavior. We have also conducted secondary research
on the industry of street food. From the industry, we found a huge growth in the business of street
foods. In our primary research, we came to understand that the street foods in the Azimpur and Dhaka
University Area are very much alike. They share a very simple supply chain network. Most of the
vendors do not keep any records of their business transactions, let alone the supply chain accounts. As
most of the street food vendors are illiterate, they have a very narrow idea about the management of
the supply chain system in a current way. In fact, the traditional method of a producer to customer
chain of supply is mostly followed. The future of this industry can be glorified if the micro-financing,
centralization and hygiene factors can be ensured in this industry.

References
Streetfoody (2019). What is Street Food? [online] Streetfoody.it. Available at:
https://www.streetfoody.it/en/what-is-street-food/ [Accessed 27 Nov. 2019].
The Daily Star (2019). Eat Street Evolution. [online] The Daily Star. Available at:
https://www.thedailystar.net/lifestyle/eating-out/eat-street-evolution-1378756 [Accessed 27 Nov.
2019].
Foodiez. (2019). Top 10 Street Food to Try in Dhaka. [online] Available at:
http://www.foodiez.com.bd/Buzz/Details?title=Top-10-Street-Food-to-Try-in-Dhaka [Accessed 24
Nov. 2019].
Daily Sun. (2019). Talking About Street Food and Its Business Trend | daily sun. [online] Available
at: https://www.daily-sun.com/magazine/details/377610/2019/03/15/Talking-About-Street-Food-
And-Its-Business-Trend/2019-03-15 [Accessed 24 Nov. 2019].

Supply chain management of street food in Bangladesh

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