Beanbags have started emerging across startup offices in Egypt, replacing the traditional tables and chairs. But the trend is not stopping there – more and more Egyptian households are welcoming the beanbag into their homes, and even some universities see the value in offering an alternative casual seating opportunity on campuses.
Aiming to locally manufacture something “hip” for the Egyptian market, four students from the American University in Cairo (AUC) founded Ariika with a starting capital of LE 9,000 out of their own pockets.
Today, Ariika went from manufacturing two to three beanbags a day with one machine in a spare room of a factory belonging to one of the founders’ fathers at the very beginning, to producing 3,000 a day in the team’s own factory with 60 machines. Until the end of 2011, Ariika’s revenues stood at LE 600,000, boosting to LE 13 million in 2017, which led the company to sell a stake of 10 percent for $3 million to a Kuwaiti investor.
Six months of researching later, Khaled Atallah, Shahir Arslan and Hassan Arslan launched Egypt’s first company for branded, locally manufactured beanbags.
“We had to do all the dirty work. We were bootstrapping every Friday – we enjoyed not sleeping. We literally slept two hours a day,” Hassan recalls. The then 20-year-old students did everything themselves, starting with setting up the website, to acquiring the fabrics and designing the pieces, until finally delivering each product themselves.
People only see the cover of our book, but what’s inside the book is what makes us different
On May 5, 2011, Ariika had launched a campaign on AUC’s New Cairo campus, spreading the beanbags across the university grounds. Students engaged with the products and to the team’s surprise, they broke even on the third day after the launch.
“I think that happened because we did it according to the book. I am really proud of going about our business theoretically,” Hassan says.
The step up
A year later, it was time to go B2B. Catering to giant corporate clients like Emaar and Heineken, Ariika managed to customize beanbags and offer an advertising added value to the mix. In 2014, Coca Cola and Pepsi were bidding on who would exclusively buy the floating beanbag for the summer season.
The secret sauce
Regarding what sets Ariika apart from other companies, the founders believe that the internal organizational structure, monitoring system and evaluation mechanism are the main differentiator. In their third year, the firm implemented a Key Performance Indicator (KPI) system for their employees and connected their departments with an Enterprise Resource Planning (ERP) system.
“People only see the cover of our book, namely our marketing efforts. But what’s inside the book – the internal theoretical world – is what makes us different,” Hassan explains.
“We launched in Dubai and Saudi Arabia, and are launching in Kuwait soon,” Hassan tells Business Forward. “We are also buying another factory.”
Generating revenue, generating profit, reinvesting – this is the secret to quantifying one’s business, according to the now 26-year-old. “If you want to grow significantly, you need to do that.”
To remain at the forefront of the industry, Ariika constantly tries to look into innovative campaigns and causes.
For example, the company partnered with the Egyptian Society for Mercy to Animals (ESMA) to create a beanbag that can be transformed into a shelter for pets; a percentage of the profit is allocated to the ESMA foundation.
Furthermore, it created the air puff beanbag, which was the first of its kind in the Middle East.
“Our vision is to be the number one comfort innovative product providers in the Middle East. That is what we strive for,” Hassan states.
The team believes that it conquered the beanbag industry in Egypt, and is yet to do so in the MENA region.
“I can safely assume that we have more than an 80 percent market share of the beanbag industry. We are still spreading in the MENA region and it is not farfetched to say that we could compete globally in the western hemisphere,” Hassan concludes.