E-Commerce is a very profitable business platform in 20th century. And Bangladesh is not late to make it a part of it’s fastest growing economy. 5 years ago most of city living people were not familiar with the “E-Commerce” terms but now they are. E-Commerce in Bangladesh is flourishing and already the government is considering it as a vital progress of “Digital Bangladesh” slogan.
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What is E-Commerce
E-Commerce stands for electronics commerce. Any kinds of buying or selling any products or service via electronics or online media is called e-commerce. If you want to keep the definition more easy, then I will tell buying any service or products without physically going to any store. It’s the e-commerce. Buying and selling can be done in various ways without visiting your local store. You can buy products from e-commerce website, Facebook page, etc.
E-Commerce in Bangladesh
In Bangladesh the definition of e-commerce is same. But certainly it’s progress and impact can be varied in compared with other countries in the world. Bangladesh is moving towards an unique slogan “Digital Bangladesh”. Government of Bangladesh which has been formed by one of the largest and oldest political party Bangladesh Awami League first introduced the concept of Digital Bangladesh. This slogan represent an unique vision for the country and every sector is moving towards achieving that in next couple years.
E-Commerce in Bangladesh is growing fast and it already started making impact in people’s lives. This new industry with huge possibilities are still marching in Bangladesh. People can now buy products or service from their home with their mobile phone. People can now interact with business brands via social media like Facebook. New businesses and new niche markets are growing rapidly than it happened before. Everyday new entrepreneurs are finding their niche markets and selling their products to people online without any physical store. Consumers can now pay businesses with their mobile phone. Thanks for the growing cashless platforms in Bangladesh.
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Progress & Future of E-Commerce in Bangladesh
From 2012 actually e-commerce concepts started establishing in Bangladesh and now it’s 2019. Lots of things happened within this 7 years. In a recent round-table on “Local e-commerce industry: issues, challenges and solutions” speakers told “local e-commerce market size is about Tk 1,000 crore and 100 e-commerce ventures are making Tk 700 crore in annual sales. Every year the market is doubling the total number of orders per day. Currently the e-commerce marketing in Bangladesh is generating 30,000 orders per day”. It’s a clear sign of progress with pace.
According to the Financial Express Bangladesh, The cabinet has already approved National Digital Commerce Policy 2018 on July 16. This is a very young age of the e-commerce in Bangladesh and local entrepreneurs are working closely with the government to make the policy more effective and helpful for the industry
Challenges in E-Commerce industry in Bangladesh
Although the industry is shining but there are many challenges that should be faced to keep up the e-commerce trends in Bangladesh. After studying and researching about e-commerce market, I have realized that the major challenge for this industry is transport & logistics, online payment and trust between B2C (Business to Consumers).
Logistics & Transport – Challenge for e-commerce
In Bangladesh, logistics & transport system is one of the main challenges to keep the e-commerce trends keep up. Currently e-commerce businesses are getting most of their sales order from Dhaka city. But consumers are continuously complaining about the delivery system. After talking with few local e-commerce ventures here is the process of order fulfillment in Bangladesh.
First consumers visit website → place their orders → businesses confirm the order via phone call → seller call delivery company → delivery person from delivery company pick up the package → deliver to the customer → take payment → payment deposited to seller account.
This is a long process and to keep the service quality good most of the time it’s a hassle to maintain it. Also it requires lots of human resources and quality control inspection that requires more expenditure and it means more costing. Also due to heavy traffic in Dhaka city, most of the orders get delayed and customers lose their minds sometimes. Because if you want to eat Pizza you can’t wait 3 hours to receive it. But it’s changing. Few logistics companies are already established and doing their best to improve the overall logistics.
Online payment system – complexity & lack of flexibility
It’s true that Bangladesh is moving towards a cashless economy. But due to complexity and flexibility most of the e-commerce ventures can’t fully consume online payment system for their e-commerce operation. Most of the online shopper in Bangladesh don’t want to trust online payment system to order something from online.
Also online payment processing fees are higher (more than 2% per transaction). It’s making the costing higher. Getting approval for online payment gateway is a complex procedure as well as it’s integration facility is little bit complex. According to Bangladesh Bank NPS payment stats there are 1,60,29,875 credit/debit/pre-paid cards issued in Bangladesh. But still people want to pay cash after getting delivery of the products and they don’t want to make payment upfront via online due to lack of trust.
Top E-Commerce businesses in Bangladesh
There are already 100+ large companies are incorporated to run e-commerce operation in Bangladesh. Here is the list of top e-commerce businesses in Bangladesh.
Currently Daraz is the largest e-commerce company in Bangladesh
Most popular e-commerce store for groceries
- Priyo Shop
- Sheba XYZ
Home service can be available from online
- Food Panda
Most popular food delivery service in Bangladesh
Foreign companies in Bangladeshi e-commerce
Many large foreign companies already started to make their move to get their foot in Bangladeshi e-commerce industry. Here is the few bullet points to see how foreign companies are considering for e-commerce in Bangladesh.
Alibaba acquired Daraz Group
The Chinese e-commerce giant Alibaba already made their first move. They already acquired Daraz, the largest e-commerce business in Bangladesh.
Amazon & Walmart is coming Bangladesh in 2020
According to Rezwanul Haque Jami, vice -president of the e-Commerce association of Bangladesh (e-CAB), Amazon & Walmart is coming in Bangladesh in 2020. Walmart already has an office in Bangladesh and doing market research for 1.5 years. Amazon also came to Bangladesh to conduct meeting with government officials and they have planned to start operation in 2020.
Improvements required for speed up progress
May be I have already accomplished my goal to share my analysis about how E-commerce in Bangladesh is growing fast and what’s the future can be. It’s a no joke but obviously it’s still in early stage. The industry just born and like a child we need to nurture it in proper ways to make it efficient for all.
There are lots of concerns among the local business and authority should take this industry as a booming sector for country’s economy. To do so, it requires extensive research on our neighboring countries and their e-commerce policy and practices. Technology is changing in dramatic ways and we have to learn and act fast to do parallel development for e-commerce industry in Bangladesh. We already have a lots of tasks regarding improvements such as logistics/transportation, policy, foreign and local venture policy, entrepreneurs friendly policy changing, etc.
I personally hope that the day already came for the people of Bangladesh to be a part of a revolution in terms of e-commerce in Bangladesh.