Udhaar team.
Udhaar team.

Ever got into a petty quarrel with a neighbourhood store owner over a payment you had already made but he didn’t remember? And it was simply your word against theirs with no way to prove? What if a third party could intervene and settle the dispute?

Well, that’s the bet of one startup, trying to bring in more transparency in retail. Oscar Udhaar is an app run out of Karachi that turns the paper-based ledger online. How does it work? Download the app, sign up with your phone number and choose your language (between English, Urdu, Sindhi and Roman). Then simply start adding customers and create entries against those names.

Every time a transaction is recorded, the customer is automatically sent a text message (or WhatsApp), giving both parties documentary proof of their dealing. The retailer can also look at his/her account statement for the day, week, month etc.

As of now, the app has reportedly over 75,000 downloads with monthly active users standing at around 34,000-35,000 last month, according to founder Fahad Kamr.

Udhaar was started as a side product of an existing tech company that provided software-as-a-service (SaaS) solutions to larger enterprises. “Our office was by Teen Talwar, where I got into a conversation with a neighborhood kiryana store, whose owner, Babar, would open at 7:00am and close at 1:00am, seven days a week so he could keep track of his daily sales, credit items etc in the prized paper register and guard the wooden cash drawer. This prompted us to understand his operations to uncover problems that could potentially be solved with technology and so came Udhaar app,” recalls Kamr.

Within the local ecosystem, not many players have gone after the retail segment but that doesn’t mean Udhaar has no competitors. A couple of Indian solutions — such as Khatabook and VCredit — are fairly popular in the Pakistani market, and have raked millions of dollars in funding. What is Kamr’s plan to mark his turf then?

“First of all, we are a Pakistani company with a better understanding of the local market and its nuances. This allows us to have a direct relationship with retailers here and improve things/add features. Also, our solution ensures that the data stays within the country instead of going to India,” says the founder.

While we are on the topic, some of you might be wondering what’s so difficult about this app after all? Can’t this be pulled off by players already serving the retail market, namely the telcos and banks?

“Honestly, banks and telcos can choose to do anything if they want. But we are a complimentary service, operating outside their core, so they don’t really see us as a nuisance,” says Kamr. Okay so forget competition then, but why go all by yourself instead of partnering up with the said players, especially in this age where many of them have opened up their APIs?

“We do closely work with the telcos on a number of fronts and integrating with them is definitely a possibility in the future,” he shares.

As for income, Udhaar is still free to use and they haven’t introduced any monetisation channel yet. “There are multiple possible revenue streams, such as credit and payment solutions or eventually selling our other SaaS product but we haven’t decided on that yet,” says Kamr, adding “honestly, the idea behind this app wasn’t moved by monetary concerns.”

The startup raised $1.1 million, mainly from investors in the United Kingdom, a couple of years ago. Looking at how terribly the retail segment is underserved by startups, one wonders the reason behind that. Is it the cost, the operations or just lack of interest?

“Might not seem like it at first, but this is actually a pretty expensive business; customer acquisition that requires going directly to the retailer and demonstrating the app, server bill that comes in at a pretty hefty figure or the SMS costs that come with every transaction recorded,” Kamr says.

Difficult sure, but the opportunity pie is huge at the same time. Nielsen, the market research agency, puts the countrywide tally of retailers at around 675,000 for fast-moving consumer goods alone. Estimates from a number of sources put the sector at roughly 18 per cent of Pakistan’s gross domestic product, which should come in at over $50 billion.

Will Udhaar manage to carve its own share? Only time will tell.

The writer is member of staff:


Twitter: @MutaherKhan

Published in Dawn, April 12th, 2020



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