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Potentiality of E-commerce in Bangladesh

E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the Internet. These business transactions occur either business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business. The terms e-commerce and e-business are often used interchangeably. The term e-tail is also sometimes used in reference to transnational processes around online retail.

Background Of e-commerce In Bangladesh:

Bangladesh is one of the large market in the world as population but the peoples are not well enough for online market yet. Since 1970 to 2000 can be said that Bangladesh was almost in the darkest in e-Commerce business. The peoples even never imagine for e-Commerce. They just work in the computer for assignment for school, colleges and university or can be used in private organization or  government. But it was very rare in the government project.

Since 2000 the students just waked up and started a revolution with computer work in every department in the every organization and also it’s going to involve most of the government project too. The peoples are getting better and better in terms of time. Bangladesh is also going fast and like western or develops countries. The peoples are doing many things online like read newspaper and doing lots of out sourcing work and getting very good money and not only himself also giving good remittance to the nation too. The peoples are specially studying in the private universities and they are very good enough for the e-Commerce knowledge and uses development. This is very exciting that the private universities are also giving free laptop to every student and forcing them to jump and learn many things from online. This is also nice to see that they are doing online business and putting many things on their sites and selling them easily.  

Late 90s: E-Commerce started in Bangladesh in the late 90s. The earlier E-Commerce sites were actually gift sites targeted towards the Non-Residential-Bangladeshis (NRB) living in abroad. All the sites were based in abroad and had branches in Bangladesh.

Year 2000-2008: During this period of time, the E-Commerce sector observed slow growth. There were few E-Commerce websites but there were no system for online transaction which was the first condition for E-Commerce. In addition, high cost of Internet and low penetration meant that few people knew about these sites. According to Bangladesh Bank, payments and transactions by credit cards were nearly Tk11 billion in June 2008; one of the lowest in the world. The country had only about 400,000 credit card holders at the end of June 2009. From 2008, things started to look bright as Bangladesh Bank took various initiatives including implementation of e-Payment Gateway.

Year 2009: The real change came in 2009 when Bangladesh Bank allowed online payment in the country thus, officially opening up the E-Commerce sector. Another major incident of 2009 was introduction of WiMax internet in Bangladesh. It became quite popular in the country.

Year 2013: The year 2013 had been an important year in the history of E-Commerce in Bangladesh.

First, Bangladesh Association of Software and Information Services (BASIS) and Bangladesh Bank jointly observed “E-Commerce Week” for the first time in the country, supported by ICT Business Promotion Council. From January 5 to January 11, there were four roundtable discussions, two seminars, one technical session, special awareness program at Dhaka University and a special promotional campaign at Bashundhara Shopping Mall.

In February 2013, for the first time in the country, Computer Jagat, the leading ICT magazine of Bangladesh, under the supervision of Dhaka DC Office, organized the first fair on E-CommerceThe three-day fair took place from February 7 to February 9 at the premise of Begum Sufia Kamal National Public Library. The slogan of the fair was- “Festival for buying and selling at your premise.” A total of 31 public and private E-Commerce organizations showcased their products and services at the fair. Though first of its kind, the fair was a huge success attracting eighty thousand visitors. Computer Jagat also did live webcast of the fair which was seen by more than fifty thousand people in Bangladesh and abroad. Following the first ever e-Commerce Fair at Dhaka, Computer Jagat arranged e-Commerce Fair at Sylhet, Chittagong, London and Barisal with their partners and participants. Additionally, Bangladesh Bank gave permission to buy products and services online using international credit cards this year. Buying products and services from abroad using credit card is an important aspect of E-Commerce.

 Age Group Users In Bangladesh:

Through the research conducted it can be observed that the population falling between the age brackets of 25-34 years account for the highest number of users, with the 35-44 and 18-24 bracket falling at second and third places respectively. One of the most significant reasons for this observation is the fact that people falling in the age bracket of 25-34 years are more inclined towards technology and its usage. These people are at the forefront of technological revolution and are more open towards online shopping.

Gender Popularity User In Bangladesh:

If we look at the overall e-commerce activity in terms of gender and compare the males vs females ratio for e-commerce in Bangladesh, we can observe that out of the total e-commerce activities carried out, 83% comprised of males, with females involved in only 17% of the total. However, if we compare the average e-commerce conversion rate1between the two genders, we will be amazed to figure out that it was nearly similar.

Male = 20%

Female = 80%

Activity of male vs female in e-commerce across Bangladesh

Type of E-Commerce in Bangladesh:

Currently, three types of E-Commerce are popular in Bangladesh. They are-

  • Business-to-Business (B-2-B)
  • Business-to-Consumer (B-2-C)
  • Consumer-to-Consumer (C-2-C)

Main obstacles:

Compared to other countries, Bangladesh is a late entrant in E-Commerce. Yet, this sector observed tremendous growth within a short time. E-Commerce can be the next major driver of Economic development but there are some issues that need to be addressed. Otherwise, this sector would never reach its full potential.

  1. Developing delivery channel to the customers
  2. Affordable and un-interrupted internet all over the country
  3. Improving the online transaction system
  4. Online fraudulence
  5. Piracy

Life cycle of an e-Commerce transaction:

e-Commerce improves the efficiency and effectiveness of business, government and not profit organization agencies. The ability of this business conductance all over the world in 24/7. Its major advantage is online and can save a lot of time and money rather than go outside and spent some extra money for shopping. However going online does not guaranteed 100% success and it totally depends on the organization.

 E-commerce payment process:

This is very clear that the peoples of Bangladesh are going to purchase online like western or Europe. There are not many sites like western but its increasing day by day in the country and also spreading the rest of the district of Bangladesh. The government also taking part of that and taking many projects to build digital Bangladesh. The peoples can realize that they can save a lot of time for doing online shopping and also can do others works too. Now a days we can see that people are giving bill online.

The e-commerce is the greatest opportunity for a person whether he or she pays the bill online or purchase anything or even can do the business to sell something’s unusable from his home or office. He or she does not need rent a office or space for sell. He just easily can sell this on his own website or even can use others site for selling goods or staffs. e-Commerce is the blessing by the God to the world. The western peoples can’t even think without e-Commerce because they are very much familiar with that and developing also day by day for better satisfaction.

The top payment methods in Bangladesh are:

Cash on Delivery: is the most commonly used payment method in Bangladesh. As per estimates, more than 95% of e-commerce users in Bangladesh prefer cash on delivery (COD) payment model.

Bank / Wire Transfer: Very few e-commerce businesses operate on the system of only delivering the product after receiving the amount through a wire/bank transfer.

bKash / UCash: Some e-commerce websites also prefer these payment models for transferring small amounts.

Credit Card: Most of the e-commerce websites in Bangladesh have merchant accounts integrated on portals to facilitate credit card transactions. However, almost all such e-commerce websites also offer multiple other payment methods and cater to the cash on delivery system.

 E-Commerce in Different Sector in Bangladesh:

Though being a under developed country, selected segments of the Bangladeshi business community has embraced technology with reasonable success. Personal computers and the Internet are also emerging as day-to-day business tools. These positive indicators are favoring the prospects of e-commerce in Bangladesh. Some sectors are given below-

  • Ready Made Garments (RMG).
  • Banking sectors (Online Banking).
  • Online Shopping.
  • Web Hosting, Domain.
  • Online cards, gifts.
  • Oil and Gas sector etc.
  • Online Transportation System, Hotel Management and Tourism etc.

 Geographic Trends Of E-commerce In Bangladesh:

Dhaka being the capital city as well as the metropolitan city of Bangladesh, prevails the list of yearly e-commerce activity in the country with 35% of total traffic, closely followed by the second-largest city and main seaport of Bangladesh, Chittagong at 29%. Gazipur City, the neighboring city of Dhaka which is less populated as compared to Dhaka and Chittagong, stands at third place with 15% of the country’s total e-commerce activity each year. Other cities with the highest inclination towards e-commerce following Dhaka, Chittagong and Gazipur City include Narayanganj and Sylhet respectively.More than 80% of the e-commerce transactions are carried out in three major citiesof Bangladesh.

-Dhaka

-Chittagong

-Gazipur City

Statistics showing geo-targeted e-commerce trends in Bangladesh

Advantages of E-Commerce in the Perspective of Bangladesh:

The multidimensional activity of E-commerce which Bangladesh can be benefited in business sector, i.e.-

  • Expansion of the era of Business.
  • Reducing of unemployment problems.
  • Reducing of communication difficulties.
  • Access to the international market.
  • Competition against exporting in other countries.
  • Business in round the clock.
  • Helps to enhance the knowledge about business.etc

Telecommunication’s Role in E-Commerce of Bangladesh:

E-Commerce is largely dependent on the Internet and the access, pricing and the quality of Internet services and internet services are significantly dependent on the status and performance of the telecommunications sector. As per the National Telecom Policy, 1998, the telecom sector (Fixed line, Mobile and the Internet) is liberalized for private investment. Following the National Telecommunication Policy, the Bangladesh Telecom Act-2001 was enacted. In order to separate the commercial operations of Bangladesh Telegraph and Telephone Board (BTTB) from its regulatory functions, a separate Bangladesh Telecommunication Regulatory Commission (BTRC) has been established in January 2002. Bangladesh is already connected with Information Supper High Way (I-Way / Submarine Cable) and with the 16-party consortium of the 20000 km „South East Asia-Middle East-West Europe (SEA-ME-WE-4) submarine cable projects as it has already installed the 1260 km branch line cable from the landing station at Zhilanja in Cox‟s Bazaar and at a point in the backbone of the undersea cable in the Indian Ocean. The capacity of the undersea cable will be available in the national network after the installation of fiber link between Cox‟s Bazaar landing station and Chittagong, which is to be completed by 2006 which connection has drastically reduce the communication cost and ultimately the transaction cost. Last Mile connections in Bangladesh are provided jointly by public sector and private sector. At present, in addition to the state-run BTTB‟s Land & Cell operation, four cellular and five rural fixed lines telecom service providers 195 ISPs and numerous cable operators are operating in rural and urban areas of the country. Key developments of Internet service are-

The focus starts to build on the country developing into „Digital Bangladesh‟ by 2021 with this strategy providing a boost to infrastructure.

  • Mobile internet services have been giving a much needed boost to internet access.
  • Provide board band services, however, continue to struggle.
  • Rapid early growth in WiMAX services after operators launch.
  • BTRC prepares to open market for more VoIP operator licenses.
  • BTRC issued 34 additional IIG licenses in 2012.
  • Banglalion and Augere were permitted to upgrade their networks to TD-LTE .etc

Major E-Commerce Websites in Bangladesh:

In spite of various barriers many e-commerce websites are established in Bangladesh. In July, 2013, an article published on Financial Express with title “e-commerce expanding at faster pace; yet no PayPal operation allowed in Bangladesh”. E-commerce in Bangladesh is expanding rapidly, thanks to a fast growing number of Internet and mobile users, people familiar with the business. The volume of e-commerce in terms of transactions in monetary value is expected to reach BDT-2000 million in 2013 against around BDT.450 million of 2012. The products and services that now dominate the country‟s e-commerce are railway tickets, domestic air tickets, hotel booking, electronic products, books, gift items, jobs, hotel reservation clothing and some food items. Major e-commerce websites in Bangladesh are given below-

  • daraz.com.bd
  • quickbuy.com.bd
  • bagdoom.com
  • ajkerdeal.com
  • bikroy.com
  • e-courierbd.com
  • kaymu.com.bd
  • chaldal.com
  • rokomari.com
  • sohoz.com
  • biponee.com

e-CAB (e-Commerce Association of Bangladesh):

Recently in Bangladesh e-CAB (e-Commerce Association of Bangladesh) has started their operation for provide a common platform for discussing and exchanging views on business conditions and issues, both domestic and international, affecting companies or organizations involved with E-commerce or online marketplaces through which trade is facilitated or commenced. e-CAB’s aim also to take action for preservation of rights and interest especially, of the members of the organization and generally for the development of the business services who are related with E-Commerce business, nationally and internationally. To take all steps to support, protest and prevent constitutionally all governmental law or proceedings imposed against any member of the association. The trade organization shall discharge its activities considering the state policy and overall public interest and also it shall not arrange participate or support any activities in contrary to the regulations of the state and subversive to the social peace & tranquility.They also collect maintain, distribute or supply all data statistics and other information necessary for the Email promotion and advancement of business of E-Commerce through letters, circulars, periodicals or though press and other publicity media and to obtain or develop information books, brochures, visual aids and education items for members and to distribute them on a pro-data, on profit on loss basis.

 

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