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Thu 15 Aug 2019 08:31 AM

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Entrepreneur of the Week: Sean Dennis, co-founder and CEO of online marketplace Seafood Souq

The new platform aims to transform the trading of seafood products and address the lack of transparency and information in the market

Entrepreneur of the Week: Sean Dennis, co-founder and CEO of online marketplace Seafood Souq
Sean Dennis, co-founder and CEO of online marketplace Seafood Souq.

A Dubai-based online marketplace is tackling seafood fraud, product mislabelling and high pricing by connecting international sellers with regional buyers through a 100 percent traceable supply chain in partnership with Emirates SkyCargo.

The business to business (B2B) platform called Seafood Souq was launched in June by friends and start-up founders Ramie Murray (Middle East shellfish farm Dibba Bay Oysters), Sean Dennis (US blockchain start-up Loyyal), Denis Konoplev (UK-based AI platform Disperse) and Sheikh Fahim Al Qasimi (UAE corporate advisor at investment firm AQ&P and the department of government relations for the emirate of Sharjah).

Chief executive Sean Dennis speaks to Arabian Business about how Seafood Souq will ultimately help regulate the region’s seafood market.

What are some of the challenges in the region’s seafood market and how does Seafood Souq tackle those issues?

[There is a] lack of transparency and information in the market. [The region] very much operates in a closed off market where, if you want information, you’re going to have to call up five or six different distributors or suppliers. There’s no set way of necessarily doing things, no set way of communication or medium for payment.

Difficulties are incumbent in traditional business practices. Different parties in the value chain don’t necessarily speak to each other and information isn’t necessarily passed on. If there’s one bad actor in that value chain, then that affects the end consumer, and no one would be able to pinpoint the part that went down.

Seafood is a highly valuable and highly perishable item; 30-50 percent of seafood could be mislabelled so you think you’re eating tuna – it may or may not be [tuna], likewise with cod or salmon. There’s also the dates; mislabelling all the way throughout that value chain is very dangerous. What we really want to do is provide traceability throughout the value chain.

We track the entire cold chain using temperature logos the second it leaves the factory from where it was packaged, so you can see if the cold chain was broken at all, or where it went wrong and where we can correct it. Likewise, because you’re buying direct from the supplier like a Norwegian farm, for example, you’re dealing directly with them through our platform and so all the data and information is available through Seafood Souq.

What are your expansion plans for Seafood Souq?

[We’re] global in as much as suppliers can come from anywhere in the world. [We’re] regional in that our buyers are [regional]. The plan is – as quickly as we possibly can – to reach out to the rest of the UAE and into the GCC.

So [we’re expanding] to the UAE within this year. Within the next 12 months, I want to be fully in the UAE and look to go into other countries. Towards the end of the [next] nine – 12 months, I want to expand across the other Gulf countries.

What is your business model and pricing strategy?

Because our sunk costs, or our monthly costs, are particularly low, we don’t need to make much money on each individual transaction. We’re so confident that the buyer is connected directly with the seller and has their story and knows who it is, because our first, middle and last mile processes are so efficient.

Again, working with Emirates SkyCargo, a buyer will not, and should not, be able to bring in a product cheaper than we can.

I think within 12 months, I will be looking to get very close to break-even point

We make sure we’re - at most - at market price, but the percentage depends on the value of the product. Eventually, there will be a machine learning algorithm which makes sure the percentage we have is maintained across the platform so if one product goes to a 4 percent fee then the other can go to 12 percent to average out.

The range is currently a moving target but buyers should always be able to purchase on our platform and either pay the same or save money from where you’re doing it right now.

Are restaurants and consumers now more concerned about the origin of their seafood compared to a few years ago? Why did it take so long for a platform such as Seafood Souq to be set up in the region?

Reasons this didn’t exist before is we’ve seen, in the last 10-15 years, the B2C marketplaces take a massive stronghold globally. High street retail brands really suffered at the hands of the Amazons and the other shopping capabilities that have come with the birth of e-commerce, and it was only recently, in the last five years, that it started to come into the GCC region. The business model has been legitimised and there’s now a need for it.

So if you’re setting up a restaurant or you’re a supermarket, you will either go direct to the source or buy through a distributor here [in the UAE because] it’s not your principal focus – you’ve got 50 other things you’re focussing on. The traditional businesses available in the market have not been able to provide that additional information you’re looking for. So there’s always been that want to know [but] I don’t think the awareness was necessarily there.

It’s the same thing as we’ve seen everybody suddenly wanting organic. Did we care about our health before? Yes. Were we aware that certain things may or may not be good for us? No. Certain reports have come to light over the past few years of the inherent problems in the seafood industry in the same old fishing practice. If we continue to fish our seas the same way we are right now, we will overfish the vast majority of our oceans. We need to adopt more sustainable fishing methods.

What effect will Seafood Souq have on the F&B industry? To what extent will restaurants or retail outlets benefit?

What the restaurants want to know quite often is the country [source] and sometimes they will, sometimes they don’t [know]. We’re giving them data beyond that. We’re telling them the product they ordered is from this particular farm in Norway, for example. So they know it’s Norwegian salmon, the particular farm, the way it was farmed, the date it was taken out of the water and how it was transported. They get full information in a service industry where [outlets] are upselling product.

It’s difficult for many tech companies to make a profit. When do you expect to be profitable and is it difficult for you?

I’ve started numerous tech companies in my life. I’ve had good experience doing this to a certain level, with both these last two companies [Loyyal, Century 21] getting to profitability, there has been a major aim which differentiates us from a lot of tech companies: it’s creating a real business model rather than worrying about it later.

In [Seafood Souq] in particular, four of our founding team [members] are multi start-up founders. This isn’t our first time and we’re not going into this blind thinking that we’ll figure it out later. It’s done as a legitimate business need and there’s a legitimate way for us to actually make sure we cover our costs and hopefully make money at some point, very soon, as opposed to saying we’ll figure it out later. Unlike most tech companies, which just go on data or market share, as a marketplace, we are within reach of being able to get to profitability. I think within 12 months, I will be looking to get very close to break-even point.

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