Shajgoj: the story of a unique startup
Shajgoj is a local brand that is bringing international brand cosmetics to Bangladesh. It won the Daily Star ICT Startup of the Year in 2021. Most recently, it became one of the only two Bangladeshi startups to have backing from Sequoia Capital India, raising 21 crores.
Toggle recently reached out to Nazmul Sheikh, CEO and Co-founder of Shajgoj, to learn more about the origins of Shajgoj, its current operations and aspirations.
How did Shajgoj start? Why did you decide to work on such a platform?
I worked in Grameenphone as a telecom engineer and then went to Nigeria. By 2011, I understood that the telecom industry would become saturated. At that time, I did not like any of the options I had: continuing the job, going into consultancy, or migrating to Australia/ Canada. I wanted to do something of my own and found this beautiful space in Bangladesh. So, my co-founders (Sinthia Sharmin Islam, CCO, and Milky Mahmud, COO) and I started shajgoj.com.
Initially, it was a blog site. We used to write articles on skincare like how to take care of the skin, and product reviews - everything related to beauty. When we came back to Bangladesh, we started doing a lot of research and discovered lots of problems. The market was not ready, and though products were available, the trust factor was absent. Also, the discovery of beauty products was not a good experience because beauty products were being sold on a variety of platforms. Moreover, most of the people were male-dominated sellers. There were no experiential beauty discoveries back then either. We wanted to solve all of those problems.
So, we began our mission by education first, i.e. through content. This served a few things. Firstly, it gave us brand awareness about shajgoj.com. Secondly, we were being viewed as beauty experts. When you become an expert and you have a connection to your audience through the content, it becomes easier for you to sell. That is what happened when we opened our first physical store at Jamuna Future Park in 2015. We saw our readers coming to the store. We established a trust factor through our brand identity of being beauty experts to whom the customers could talk directly and take product suggestions. This simplified the beauty experience for our customers.
However, back then, the e-commerce part was not ready. The bKash app did not become available until 2020 and logistic players were inadequate. There was no option for home delivery outside Dhaka. The home delivery option was available only for inside Dhaka, which would take about 4-5 days. Fortunately, logistics companies are gaining traction now. In October 2018, we started our e-commerce journey. As of now, we are growing very fast. Last year, we grew 4 times. This year, we're growing 3 times as well.
How did you differentiate Shajgoj from other beauty platforms?
The first differentiating factor is our content. We have thousands of videos and tens of thousands of articles. We have been doing this for almost 9 years.
We have millions of followers. We have emotional connectivity with our audience. We always say that nobody is going to buy lipstick just because it is the cheapest and has the fastest delivery. You need to believe in a story. You can never have enough lipsticks. You may have 10 colours, but maybe the 11th colour will go with your new dress. So, you will buy that lipstick in the 11th colour. Beauty is an emotional category. Therefore, you must treat it that way. I think we have been able to do that through our content and physical stores.
Secondly, our physical stores are not just outlets. Here you can take advice from our beauty consultant. Check your skin type. Try the foundation on your skin.
Thirdly, in our e-commerce part, whenever you want to face any difficulty, you can inbox us and get free advice. No need to buy anything. Bother us the whole day, no problem.
Also, we have been able to win the confidence of our customers. 86% of people come to Shajgoj because they think we sell authentic products. So, in all, I think with this content, the curation of our physical stores, and the convenience of e-commerce, nobody else is doing all three things the way we're doing. It's the difference between us and the other plays.
Content has helped us a lot. By far, we have the largest collection of content. Our service is way better than any other e-commerce player not only in the beauty space.
We're a very customer friendly company.
How did you overcome the challenges? What was the most difficult one?
The content side challenge was the resource. There was no platform before Shajgoj dedicated to pure beauty. A lot of research is required to create original content that is useful to the customer. This sort of knowledge, e.g. what niacinamide does, was not there before. It also took us a long time to find those talents who would write these articles consistently without plagiarism.
When we started our physical outlet, we didn't have much experience in retailing. We had a lack of knowledge about government rules and regulations like VAT, Tax, partners, etc. The supply chain has also been a persistent issue, especially because of the pandemic and other reasons. Bringing different brands is also an issue. We still don't have Mac in Bangladesh. Yet, we did succeed in bringing renowned international brands like L'oreal consistently. Sometimes, there are not enough vendors.
Once we began our e-commerce business, we had sufficient experience and knew how the business worked. The issue, therefore, was about capitalization as e-commerce is capital intensive. We had to raise capital which was difficult to do so from Bangladesh. Even if you are a spectacular business, you don't have enough VCs or firms operating out of Bangladesh.
What challenges remain in this industry?
It's very challenging to run a new business at any scale. A bigger scale comes with its own set of challenges which we are now facing as well. It's the life of an entrepreneur - you cannot complain. You have to deal with the stress.
Currently, the challenge is related to the duty structure which is very high: 123%. Compare it to India where the duty is 20%. Also, the government rules change very frequently. We aspire to run a compliant company so this becomes challenging for us. For example, we would charge a price of BDT 120 for a product whereas a Facebook page, which doesn't deal with such rule bindings, charges only BDT 100. Customers who look at the price only feel that we are overcharging whereas ultimately, we are underpriced.
What makes Shajgoj a unique business in your opinion?
We're like any other business but what's unique about us is that we're trying to create a category that's not present in Bangladesh. The beauty space is very fragmented. We are a fast-mover and already the largest player in this field. We have a lot of responsibility towards this category. We don't try to sell our product for the sake of selling. If you come to our physical store, or inbox us, and want to buy our product, if we find out you don't need them we don't sell them. We want to believe in long-term relationships. If the product doesn't work for you, not only will you not buy this again, you will not let your friends do so either. If the product benefits you, you will not be able to stop talking about it.
We are a very empathetic brand and we love working for our customers. The beauty space is an exciting space to be in.
Tell us a little bit about the work culture at Shajgoj.
This is something we are very proud of. 65% of our workforce is female. The company is run by females for females. We also have a very good culture where nobody, no matter how high up the position, yells at any colleague. You simply cannot misbehave with anybody. It is a red flag and you'll be dismissed. Our work culture is transparent and open. Anybody can say no to anybody. A junior executive can come to my room and say, "No, I don't like what you are doing." As for our paternal policies, they are standard as per government rules.
We are also constructing a daycare service for our female workforce. Very few companies do that. The women in our company are young and getting married. We want them to continue their career as much as possible.
Tell us a little bit about the recent investment raised. How do you plan to utilise it?
70% of our customers are returning customers. Because we want to expand, our main focus with the funds raised is customer acquisition. We have a lot of offers going towards the first purchase made by new customers. The effort to acquire more customers.
We know that the e-commerce industry in the country is very volatile and customers are often afraid of trusting new ventures. How do you plan to navigate that?
You may have noticed some brands created noise as newcomers but have now been eliminated. The players who were there before are still doing good.
Every industry has faced this challenge. We believe in the relationship with customers, which we have done very well. As an empathetic brand, we are one of the best in the region, not just in Bangladesh. We care for our customers and always try to solve customer pain points, even if some of those may not be our fault. This is paying dividends for us. We can witness the love there is for the brand. We don't see any trust issues. We are growing faster than ever and acquiring more and more customers.
The lesson is that if you do the right thing, the market will be yours. If you do a bad thing, the market will punish you. As simple as that.
What are your tips for new entrepreneurs/startup founders?
If someone is really passionate and focused on something, only then they should pursue it. They should understand that it is extremely difficult. Nothing sexy about it. Whatever they read in the media, is mostly all lies. People who speak about entrepreneurship don't know what they're talking about. I think they should learn from real businesspeople. If I were to get consultancy from someone, say between a celebrity/ startup advisor and a local 'mudir dokan' - I will always go with the local shop that has done the thing and has skin in the game. Not someone who has just read up on it and speaks good English.
How would you tackle the current volatility of the job market if you were an undergraduate student right now?
The current job market is indeed a real problem.
If I were in my 2nd or 3rd year now, I would first try to find out what industry I want to get into e-commerce, telecom, pharmaceuticals, IT, anything. Then, I would do an internship at a company in that industry and learn some real skills. One week working in a company can teach you one semester's worth of knowledge.
Students in their 3rd year can research the companies they want to work for, and knock their seniors who are already working in those companies. They can ask questions like, "Is there any internship available? Or, can I do an internship for free?"
Doing an internship, even for free, is a very good strategy to land jobs right after graduation. You don't need to look for job circulars or attend interviews. The HR will not be uncertain whether you will do a good job or not. This is a shortcut strategy.
In Shajgoj, we have seen a lot of people who started with an internship first and then landed good opportunities.
Lastly, ask your seniors about recruitment. If last year, they recruited only 5 people, it's a signal that the industry they operate in is saturated. If the recruited employee number has increased from last year, then it's a growing industry.