As of now, around 400 of the 450 Miyako products are imported from China, Turkey, India, Malaysia, and Indonesia. Among the rest, 43 are assembled and seven are manufactured in Bangladesh.
Soon after the Liberation War, Mohammed Idris Ahmed, a Dhaka University graduate, set up a general store named “Ahmed Trading” to sell a variety of daily necessity products.
With time, this import-focused trader turned his attention to electronic items. By the late 1980s, he stepped into the electric goods market by selling VCRs and cassette players.
By the early 1990s, he ventured into the home appliance business with just 24 units of only one product – a blender set under the brand name “Miyako.”
Fast forward to 2022, Miyako’s production line consists of 450 products spread across 36 categories. Between 1999 and 2005, Mohammed Idris expanded Ahmed Trading – now known as Miyako Appliance Limited – by introducing electric ovens, rice cookers and microwave ovens under the Miyako brand.
By 2008, he handed over Miyako Appliance Limited to his eldest son – Dr Mohammad Naveed Ahmed.
“I am not sure why or how my father was motivated to start trading electronics. But whenever he spotted a window of opportunity in trading, he would step in,” said Dr Naveed, Managing Director of Miyako Appliance Limited, during an interview with The Business Standard.
Dr Naveed was introduced to his father’s business at an early age.
“I began working at the store with my father when I was in grade nine. He was heavily focused on building Miyako as an electronics brand at a time when the home appliance market mostly consisted of products like blenders and irons,” he said.
Meanwhile, he pursued a successful and gratifying academic career before re-entering his family business. He completed his master’s degree from Dhaka University IBA, and later joined IBA’s Doctor of Business Administration (DBA) program. On completion, he started his career as a lecturer.
“I am lucky to be the first person to avail a doctoral degree from IBA. Be that as it may, pursuing doctoral studies while running a business and managing a family was very challenging,” he said. The year 2012 was a stepping stone for Miyako as the company began assembling home appliances in Bangladesh under the banner of Kinbo Manufacturing Ltd. Eventually, the brand also began manufacturing a few items locally.
As of now, around 400 of 450 Miyako products are imported from China, Turkey, India, Malaysia and Indonesia. Among the rest, 43 are assembled and seven are manufactured in Bangladesh.
“For the locally manufactured products, we have to import around 20 to 30 per cent components,” Dr Naveed added.
Barriers to ‘Made in Bangladesh’
Most of Miyako’s products run on motors that can be manufactured in Bangladesh. “Miyako has a demand for 1 lakh motors per year, which we can manufacture locally by investing in a plant.
However, a manufacturing plant will not break even in years if it only manufactures one lakh motors per year,” said Dr Naveed.
According to him, the best solution to the demand-supply gap would be selling motors to other manufacturers, but such practice is yet to start in Bangladesh.
“In neighbouring markets, big companies often share resources to build better products and have exposure to a larger market while remaining focused on individual goals. But, in Bangladesh, companies are reluctant to share resources,” added Dr Naveed.
The hidden story behind the brand name
When asked why Mohammed Idris chose to name the brand after a Japanese city, Dr Naveed recalled, “During the late 1980-90s, there was a hype for Japanese products among Bangladeshis. So, my father thought of launching his home appliance brand with a Japanese name.”
Mohammed Idris started the electronics business with an Indonesian acquaintance, Daniel Kusman. Both friends imported products from the same manufacturer for their individual markets under the name Miyako.
Dr Naveed said, “They were trying to establish a new market and could not afford to order in bulk from manufacturers individually. The company is still present in Indonesia and is currently focused on manufacturing.”
Thriving business without an advertisement budget
Miyako Appliance Limited imports, assembles and manufactures products worth Tk50 crore per year. However, the company does not advertise its products.
“This is one of our key secrets,” Dr Naveed explained. “We do not have enough budget to advertise. But Miyako puts all the money into enhancing quality.”
“We will squeeze in the budget for a 4mm copper coil instead of using a 2mm copper coil on an appliance. So, our products’ life-span is higher than that of other similar products in the market,” he added.
His siblings and he share the aim of upholding the brand name. However, the market size is of some concern to them.
Expanding distribution across Bangladesh
Miyako owns only six outlets, all of which are located in Dhaka. The home appliance brand, however, has 40 partner outlets spread all over the country which sell directly to customers. The partners also operate as aggregators by distributing to other retailers.
When asked why Miyako does not manage outlets outside Dhaka, Dr Naveed said, “Different areas have different needs. A retail shop operating outside Dhaka knows its market better than we do. It is better to have locals selling our products in their areas and spare us the sales headache.”
Miyako does not distribute products to anyone other than its 40 partners. According to him, this policy allows Miyako’s partners to create, expand and nurture their own markets.
Initial hurdles faced by Miyako
Initially, the biggest challenge faced by Mohammed Idris was marketing the products.
“Eventually, as users were satisfied with the products’ quality, word of mouth marketing worked in our favour. Customers’ shelves became our marketing channels.”
While the company overcame hurdles on the final consumers’ end, building a good rapport with its immediate customers – distributors and retailers – came at the price of high credit.
“Back in the 2000s, distributors and retailers did not have enough capital to purchase bulk products from us. So, we initially began distributing goods on credit. Cycling the realisation of credit was a big challenge at that time,” said Dr Naveed.
However, by the time people’s purchasing power increased, retailers and distributors began investing in electronics – showcasing as many electronics items as possible in their showroom.
The pandemic: a stumbling block for Miyako
The Covid-19 pandemic impacted Miyako Appliances Limited in three phases.
The first phase of Covid-19 was very good for their business. People were not keen on saving money, rather they began investing more on electronic items as they were stuck at home.
“During the second episode of Covid-19, the competition skyrocketed. Traders began importing cheaper or counterfeit electronic items as alternatives to the existing ones in the market.
It impacted our market share. The competition became very high, however, the overall scenario was okay,” said Dr Naveed.
At the final phase, sales dropped and went back to its pre-covid phase. People realised Covid-19 was here to stay and began saving more and spending less.
“Now, there are more competitors, and especially traders are selling counterfeit items. As a result, our market [share] has slightly decreased leading to a decrease in sales as well.”
Perks of doing business with siblings
All four children of Mohammed Idris are currently directors of Miyako, heading particular departments based on their expertise and interests.
According to Dr Naveed, if members of a family working in a family business have the proper knowledge, skills and experience, they can take charge and lead a company to success.
The eldest among them, Mamtaz Ahmed, oversees packaging and design. Dr Naveed handles product sourcing, planning, factory, sales and development. His younger brother Hasib Ahmed looks after corporate sales while the youngest Zaid Ahmed handles retail management.
“My mother Tasmina Ahmed oversees estate management. Moreover, there is one person who has been a part of Miyako and our family since the very beginning. He is Mohammed Harun, my father’s friend. He is Miyako’s Chief Marketing Officer,” added Dr Naveed.
Miyako Appliance Limited intends to start manufacturing rice cookers. As of now, the brand has plastic jar blenders in its product line but will soon introduce stainless steel jar blenders as well.
“Given the current market trend – with most groups of companies tapping growing market segments – we will export our products. Exporting to the West is a big dream but we currently want to expand to SAARC countries.
Our business is going good. We are not in a race, we aim to move at our pace,” concluded Dr Naveed.