The term E-commerce or electronic commerce is related to the online transaction. Selling product over the internet is a form of E-commerce. Currently one of the most important aspects of doing business is E-commerce. In the economy of Bangladesh, the E-commerce industry has a subtle contribution as the Internet penetration percentage in Bangladesh has reached around 13.2%. So it has been seen frequently that customers are nowadays using the online stores in Bangladesh to buy their desired product. As a result, online business in Bangladesh has been growing at an extraordinary rate.
Today, the market size of the local E-commerce industry stands at Tk 1,000 crore and about 100 formal E-commerce ventures account for Tk 700 crore in annual sales. The report, which had been given in a recent roundtable conference arranged by some of the leading owners of the online stores in Bangladesh also reveals that currently, the market is catering to about 30,000 orders each day.
E-commerce provides the following features −
- Non-Cash Payment − It enables the use of credit cards, debit cards, smart cards, electronic fund transfer through the bank’s website, and other methods of e-payments.
- 24×7 Service availability − The business of enterprises and the way they provide services to their customers, which is operated by E-commerce is available anytime, anywhere.
- Advertising / Marketing − E-commerce has increased the range of advertising of products and services of various enterprises. It helps in to make the marketing management of products a lot easier and better.
- Improved Sales − Using online stores, orders for the products can be generated anytime, anywhere without any human interference. It gives a big boost to existing sales volumes.
- Support −Multiple ways are provided by E-commerce to give pre-sales and post-sales assistance to provide better services to customers.
Communication improvement − E-commerce enables ways for faster, efficient, reliable communication with customers and partners.
Growth of E-commerce in Bangladesh
The size of the E-commerce market crossed the Tk 17.0 billion-mark in 2017 from Tk 4.0 billion in 2016, according to the data available with the E-commerce Association of Bangladesh (e-CAB). e-CAB general secretary Abdul Wahed Tomal when asked told the FE that the market size is expected to reach Tk 70 billion (Tk 7,000 crore) by 2021.
Ten leading companies [both foreign and local] are present in the online market, they are:
Daraz, Pickaboo, Kiksha, Ajker Deal, Bagdoom, Priyoshop, Shadmart, and Backpackbang
Well-known companies with online stores in Bangladesh are Sheba.xyz, handymama, Bikroy.com, Sindabad, Easy.com.bd, Flight Expert, Gozayaan, chaaldal, Meenabazar, Shwapno, Directfresh, Khaasfood, Hungrynaki, Pathao food, and foodpanda.
The number of online stores in Bangladesh and E-commerce pages is 2,500 and 150,000 respectively.
The contribution of E-commerce as a percentage of GDP is less than 1%, and if we take industries connected with E-commerce under consideration it nears 2.5%. Currently, there are 1,000 E-commerce entrepreneurs in the country, who are running online stores in Bangladesh. There are approximately 8,200 Facebook pages also running this online business in Bangladesh.
Pros and Cons
Advantages to Organizations
- Organizations can expand their market to national and international markets with the least capital investment using E-commerce. An organization can easily locate more customers, best suppliers, and suitable business partners across the globe.
- E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage the paper works by making the information digital.
- E-commerce helps to simplify the processes of online businesses in Bangladesh and makes them faster and efficient.
Advantages to Customers
- It provides 24×7 support. Customers can inquire about a product or service and place orders anytime, anywhere from any location.
- Users are provided with more options and quicker delivery of products through E-commerce.
- Online stores in Bangladesh provides users with more options to compare and select the cheaper and better options.
- E-commerce provides options of virtual auctions.
- It provides readily available information. A customer can see the relevant detailed information within seconds, rather than waiting for days or weeks.
Advantages to Society
- Customers do not need to travel to shop for a product, thus less traffic on the road and low air pollution.
- E-commerce helps in reducing the cost of products, so less affluent people can also afford the products.
- E-commerce has enabled rural areas to access services and products, which are otherwise not available to them.
- Online stores in Bangladesh helps the government to deliver public services such as healthcare, education, social services at a reduced cost and in a better manner.
- There can be a lack of system security, reliability or standards due to poor execution of E-commerce.
- Special types of web servers or other software might be required by the users, setting the E-commerce environment apart from network servers.
- Sometimes, it becomes difficult to integrate software for online stores or websites with existing applications or databases.
- There could be software/hardware compatibility issues, as some E-commerce software may be incompatible with some operating system or any other component.
- Initial cost − The cost of creating an application for online business in Bangladesh, in-house may be very high. There could be delays in launching an E-commerce application due to mistakes, lack of software and lack of experience.
- User resistance − Users may not trust the site being an anonymous seller. Such lack of trust makes it difficult to convince traditional users to switch from physical stores to online stores.
- Internet access is still costly and is inconvenient to use for many potential customers, for example, those living in remote villages.
Helpful Tips to setup Your Online Store in Bangladesh
Consider your interest:
You should choose an online business according to your interest. As you know, there is a greater chance of success if you’re much interested in your business rather than just the idea of generating profit. Once you have identified your interest, you should then examine the demand for the products and services you want to market. If there is a higher demand, then you have the ability to succeed.
Check the online market competition:
Your business has a greater chance to succeed if there is a high demand for the product, but little market competition. If the online stores in Bangladesh you are planning to put up has already tight competition in the market, then you would want to think of ideas that will make your business stand out from the rest. You have to present your business in a more competitive and attractive way.
Come up with an efficient business plan:
It is easier to start a business online compared to a traditional brick and mortar store. However, this does not mean that you are not going to make use of an efficient business plan. Before starting out online stores in Bangladesh, you should have a solid business plan as it can determine the success or failure of a business.
Check the legalities:
You will be required to obtain a license before you can put up your online business in Bangladesh. You have to check the legal requirements of your place to make sure that you are not breaking any rules.
You should come up with an advertising method to attract customers to purchase your products and acquire various services. Online advertising is a powerful tool, but you should not also disregard the power of referrals through word of mouth.
You should come up with a regular business hour or time. Don’t treat your business as a hobby, but treat it as a steady source of income. You should strongly abide by the business operation, especially when it comes to business hours.
You should provide business contact details so that your customers can easily contact you. In recent time, it has been easier to find any location in Google maps and people trust them. So, without any second thought, open a Google plus account and point your location. It will make your customers be able to easily find you. Besides that, you may provide other regular contact details like including:
- Phone number/ Customer Care number
- Business E-mail address
As a leading member of the LDCs, Bangladesh could be a potential user of E-commerce. Although a few numbers of people are getting the benefits from online stores in Bangladesh, development of online business in Bangladesh must have strongly reflected on livelihood. By flourishing this potential sector all people of our country will be benefited. The e-marketplace is a store of information which acts as an information agent that provides buyers and sellers with information on products. To increase participant in online shopping, the sources of consumer confusion, apprehension and risk need to be identified, understood and dealt with. It can be concluded that through adopting E-commerce intensively and extensively businessmen can improve their income level along with the improvement of customer satisfaction and the buyer can reduce their cost of living along with improvement of their living standards.