Tech talk: Beware, construction ahead!

Published January 13, 2019
The Tameer Ghar duo puts their stakes on tech to cut the middlemen out of construction materials industry.
The Tameer Ghar duo puts their stakes on tech to cut the middlemen out of construction materials industry.

Building and renovating a house can be a hectic endeavour: surveying markets, vetting the materials, bargaining with vendors and still risk being ripped on both price and quality. There should be a more convenient way around it, no? Well, with, there is. It’s an online mall for construction and house-building materials which lets you search, compare and order.

The process is quite simple: you access their website, select one of the many categories — from cement to bricks — choose your product and desired quantity and checkout with a payment mode of your choice. For orders less than Rs50,000, they have cash on delivery (CoD) as well, in addition to the usual debit card mode plus major branchless banking options.

However, given the large transactions involving construction materials, usually in excess of Rs50,000, CoD and other payment channels are not the most suitable. “Our average order value is Rs60,000 which often exceeds the credit limit on most bank cards. There is hardly any online payment channel which allows such large transactions so payment has been a bit of a challenge,” Furqan says.

So, how to pay then? Well, you can transfer the amount directly into the supplier’s account after which you forward TameerGhar confirmation receipt via messaging service to get confirmation. None of the cash is handled by TameerGhar.

Since most of the orders are bulky, they are handled by suppliers themselves while the smaller ones — like sockets or switches — are carried out by TameerGhar’s own logistic partners.

The startup was founded by cousins Ahmed Furqan and Muhammad Talha Lukman in March last year. “Our families work in the construction and steel sectors so we have a good grasp of the traditional business and we also ran an online retail clothing brand so we have adequate experience in e-commerce as well. And this is a largely untapped space where we see great potential,” Furqan says. Currently they are enrolled at the National Incubation Centre, Karachi.

The construction materials industry is quite fragmented with individual clusters in different parts of the city — like ceramics in Golimar or paints at Bohra Pir — with big vendors and distributors exercising significant power over prices. But the duo is hoping to change that. “There’s no transparency at the moment: the vendors can rip you off especially if they sense you are a first-timer. At TameerGhar, almost all the details on prices and quality are readily available over the internet,” Lukman says.

And that’s where this startup serves another purpose — whether intentionally or unintentionally: price comparison. “A lot of users visit our website to just get an idea about the rates, and then shop from third-party vendors. That’s actually a market we’d like to tap into — maybe by opening an express centre or franchise, where customers walk in and have a physical experience as well, if they prefer that,” he adds.

Up until now, the cousins have been bootstrapping but are looking to raise their first round later this year. As for revenues, they charge a certain cut per sale. Generally, the commission-based income is driven by volumes, which obviously is hard for a new startup, that too in an industry like this. “Since we are still new in the business, we don’t have enough power and the margins are low for now,” Lukman says.

But bypassing middlemen and striking deals directly with producers has allowed TameerGhar to offer competitive rates — something the duo hopes will help them capture a sizeable market quickly.

The numbers aren’t too bad though. Currently, they are averaging about 40-50 online transactions a month, plus a few orders placed via phone. But thanks to the high transaction value, the monthly gross merchandise value bought through them is roughly around Rs10 million, the co-founders claim.

At the moment, their network is mostly Karachi-based which means the bulky orders such as steel or cement bags are only delivered within the metropolis. But smaller and mobile items alo despatched all over the country. “Due to our family’s background, we had the right connections with major players in Karachi so it was easier to start out in Karachi. Once the model is tested, we will expand to other cities as well,” Lukman says.

Buying construction materials is serious business with very little margin of error, especially for a scaling startup that wants to become the branded one-stop shop. And this is why TameerGhar has so far restricted itself to listing only brands — mostly big ones — while shying away from imported unbranded materials often available in the market.

Let’s wait and watch to see if the cousin duo will be able to disrupt their family’s business.

The writer is member of staff:
Twitter: @MutaherKhan

Published in Dawn, January 13th, 2019



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