SanaSafinaz made $4.6m via eCommerce in 2017 and 23% less in 2018. Here's why.

A series of events that have royally backfired during C19.

According to sources familiar with the digital business unit (DBU), SanaSafinaz anticipated that 2018 eCommerce revenue would be 23pc lower than 2017.

When it was launched in mid-2014, the DBU generated $55,300 in eCommerce revenues. In 2015, revenue grew by nearly 1,900% to $1,050,000. In 2016, revenue grew by 245% to $2,576,000 and in 2017, revenue grew by 178% to $4,600,000. In doing so, the founding team grew revenues by 8,300% in just 42 months.

The DBU contributed 18.5% to overall revenues in 2017, when including 22 physical retail outlets, which generated a combined $20.2 million dollars at nearly $720,000 in annual earnings per store. In this way, the DBU annual earnings equated to that of six physical stores. For this monumental achievement, Google featured SanaSafinaz in a case study in digital excellence for Southeast Asia.

From its formation to Q4 2017, the DBU was led by Haris Ahmed, the head of retail business at SanaSafinaz. He was assisted by Tariq Hameed Siddiqui and Moeed Sheikh. Within the span of a year, the entire DBU founding team left SanaSafinaz, with Siddiqui joining a competitor and Ahmed forming Tudors with Sheikh.

In January 2018, the board of directors at SanaSafinaz hired Uzma Khan as the CEO of the company, with Amir Tamkeen hired to lead the retail business and Arshad Jamal charged with the DBU, overseen by Tamkeen. According to sources close to the DBU, by September 2018, revenues reached $2,660,000 with total 2018 revenues anticipated to be $3,550,000, a 23% drop from the previous year. So what went wrong?

TCS Holdings, killing digital business units nationwide

Founded in 1989 by Sana Hashwani and Safinaz Muneer 30 years ago, SanaSafinaz is owned and managed by Arif Hashwani, Sana’s husband. The female founders also operate an off-the-books bridal business and a designer furniture business, while actively positioning themselves as role models and leaders of female empowerment.

After 30 months of positive results from the DBU, SanaSafinaz invested in Magento enterprise, assisted by WebWorks. This was to grow the infrastructure, an area of weakness that often crashes sites during season launches. When the site went live in Q1 2017, the clothing and accessories retailer drove demand for eight thousand orders to be dispatched and sought out cash on delivery (CoD) providers to fulfill the orders.

Given that Stallion Deliveries, an ARY Group-backed CoD provider owed SanaSafinaz in excess of $100,000 in unpaid collections, they were not offered the task. In light of similar concerns with Leopards Couriers in the past, TCS Holdings was offered the corporate account to assist in order fulfillment for six thousand orders.

Sources shared that in the haste to fulfill orders, TCS representatives did not scan parcels at the SanaSafinaz warehouse before loading them into the delivery trucks. While this saved time in loading the truck, the end result came back to hurt the DBU in the form of $30,000 in missing orders. The existence of four tracking systems within TCS added to the confusion around claims of quantities collected. In response to this, the board of directors of SanaSafinaz began pressuring the founding DBU team to recover the amount or pay for it themselves. By Q4 2017, two founding members of the DBU resigned to pursue alternative opportunities.

“The owners of SanaSafinaz began to doubt the integrity of the founding DBU over $30,000 even though the team was on track to deliver millions in record annual sales,” said a source. “In doing so, the directors proved that years of loyalty and results meant nothing to them and that one mistake could fuel intense mistrust and toxicity.”

By Q1 2018, the board of directors appointed a new CEO to lead SanaSafinaz. The focus on problems and customer complaints, rather than appreciation for corrective actions taken, has resulted in multiple long-term employees moving on.

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This article was first published on BKJ.com

On the 13th of November 2018, 17 days before this article was published, Uzma Khan (CEO of SanaSafinaz) was contacted for a statement & clarification request pertaining to the series of events described above. She was offered a 24-hour deadline and failed to respond even at the point of publication. Should she respond to the questions shared, the story will be updated.