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Future of electronic commerce in bangladesh

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  • 1. Assignment On Electronic CommerceTopic: the future of Ecommerce in BangladeshSubmitted To:Moktar AliCourse TeacherDepartment Of MarketingUniversity Of Dhaka Submitted By: Afroza Ahmed Roll no: 94; Section: B BBA 12th Batch Department Of Marketing University Of Dhaka.Date of Submission: April 28, 2010
  • 2. FUTURE OF ELECTRONIC COMMERCE IN BANGLADESHNow a day’s use of technology in each and every sector has been very common. In thisera of globalization we can hardly find any sector operating without using technology. Sothere is no doubt and it is quite natural that business world will also use technologyeffectively as well as efficiently and take the greatest advantage which is offered bytechnology. Internet is one of the largest blessings of technology, which enables peoplefrom the distant parts or county to interact or communicate easily. It has made the wholeglobe a single village. A new horizon has been opened up for trade and commerce, namely electroniccommerce (e-commerce) by none other than one and only internet. E-commerce entailsthe use of the Internet In the marketing, identification, payment and delivery of goods andservices all are done by e-commerce using internet. This paper highlights the future of e-commerce and constraints to e-commerce development in Bangladesh. Here thechallenges in implementing e-commerce in Bangladesh are discussed. Major legal,regulatory and institutional constraints to e-commerce are needed to be identified to makethe implementation of E-commerce success. Specific policy changes aimed at bringingimprovements to the legal and regulatory environment affecting e-commerce is anotherimportant issue.The advancement of technology is a continuous process. In recent age it has given birthto a digital age. Now the buyers and sellers both have much power because of themassive use of many powerful technology as well as internet. Most of the businesstoday’s are operating under the e-commerce criteria over digital networks. Internetconnects the people with companies.It has provided easier ways to serve its customer in a superior way and build strongercustomer relationship by creating value for customer. (Kotler, 2008:493)
  • 3. To discover the future of e-commerce in Bangladesh, we must have a clear idea aboutwhat e-commerce is:DEFINITION OF E-COMMERCE:In a word e-commerce can be defined as performing business activity via internet or anyother electronic network. Book defines “Electronic commerce is an emerging conceptthat describes the process of buying and selling or exchange of product, service, andinformation via compute network including the internet.”(Turban, 2004:04)From the definition above we can say that performing any type of business activitythrough internet is e-commerce.BENEFITS OF E-COMMERCE:There is some significant benefit of e-commerce to some particular people or parties.They are mentioned bellow: 1. E-commerce provides benefits to organizations. 2. E-commerce provides benefits to customers and 3. E-commerce provides benefits to the society.(Turban,2004: 14)CLASSIFICATIONS OF E-COMMERCE:E-commerce’s different dimensions can be categorized as the following five ways:1. B2B (business to business)2. B2C (business to customer)3. C2C (consumer to consumer)4. B2E (business to employee)5. Location commerce Or L.C
  • 4. CURRENT STATE OF E-COMMERCE IN BANGLADESH:In Bangladesh there is a limited application and use of B2C e-commerce .This field is notyet much developed in Bangladesh. There are many reasons behind it one simple reasonis this country is not so developed and most of its citizens are poor and uneducated. It isquit natural that there are few customers who is willing and can shop in internet. It willtake year’s to be developed this sector in bd.The telecommunication infrastructure any country affect the Internet services directly,cause it is largely depended on it. Telecommunication sector in Bangladesh ischaracterized by:1. Poor level of penetration2. High cost to access and3. A lengthy waiting periodThe Bangladesh Telegraph and Telephone Board (BTTB) Is the one and only providerand enjoying monopoly in providing basic telephone connections. The private sectors arenow involving in cellular phones and also working as Internet Service Providers (ISP) .Itis very essential although easy and affordable access to Internet services, BTTB’s pricingand regulatory strategy on ISPs are restrictive.Due to many reasons B2C e-commerce will not be able to be of much use in the nearfuture in Bangladesh. The reasons are:1. Low per capita income2. A weak infrastructural and legal environment3. Lack of trust between business and consumers.4. Non-availability of international credit cards5. Foreign currency remittance restrictions
  • 5. 6. Delays and informal payments at customs clearance. (http://www.jobsproject.org)The above reasons contribute greatly for the non operation of B2C e-commerce inBangladesh.On the other hand, In Bangladesh B2B e-commerce is already in operation for years.Export sector has the great use of it. A major field of the use of e-commerce is readymade garments (RMG) sector. They use internet for searching potential buyer andsupplier. There some local websites which provides facility of C2C e-commerce inBangladesh. In those websites both the customer or buyer and seller can interact directlywith each other. (http://www.jobsproject.org)OPERATING SECTORS OF E-COMMERCE IN BANGLADESH:Currently there is some field where e-commerce is running successfully in Bangladesh.Although this sectors are operating in our country in very limited operations due to thelacks of adequate customer still it has many potentials to be pervasive. Anyway thesectors are: 1. Online banking 2. Hotel booking 3. Airline ticket booking 4. Ready made garment.( http://www.american.edu) 5. Oil and Gas Sector MAJOR CONSTRAINTS TO E-COMMERCE:There are various constraints to e-commerce in particular in respect of Bangladesh. If wecan overcome this barrier there is possibility that we can successfully implement and
  • 6. operate e-commerce. So in order to make the future of e-commerce in Bangladeshprosperous we have to have careful watch on those. The constraints are:1. Inadequate telephone connections in Bangladesh2. There is no strong independent telecommunication sectors regulatory body3. Lack of encryption law that precludes acceptance of digital signature.4. There are no other options of Letter of Credit (L/C) to conduct internationaltransactions.5. Bangladesh does not issue international credit cards for cross border transactions.6. Interest rate ceiling on export loans. (http://www.jobsproject.org)The status and performance of the telecommunications sector holds the control of entry,value, and the image of Internet services.Bangladesh is characterized by poor level of penetration (0.4 telephone for every 100persons, Graph 1), high cost to access, $341 connection fees each telephone, one of thehighest in the world, and a lengthy waiting period -- average waiting period for a newtelephone connection varies from three months to ten years. It’s very difficult oestablishing a strong and independent regulatory body. Perfect framework can be ofimmense whereby volume, efficiency and accessibility of the telecom services can beenhanced.FUTURE IN BANGLADESH: As today’s business activities are no longer confined within the boundary of its won country, company should adopt new technology in order to cope up with current situations. Now a day’s click only company is much more popular. It refers to company who sales only its product on internet. The emerging popularity of such company has encouraged other brick and mortar companies to adapt to the new technology to remain competitive in the field. In the developed countries there is
  • 7. hardly any company which to some extend does not use technology. In Bangladesh the situation is different. Bangladeshi firms which operate locally do not use internet generally. In Bangladesh most of the application of e-commerce is for export business. Export oriented companies use this facility to contract customer. If the firm can not use this facility it will fail to remain competitive in the industry. Since Bangladesh is an underdeveloped country, there is a little possibility of prosperity of e-commerce in Bangladesh. As the per capita income of our country is low, only few customers can afford to use internet as well as order and purchase on internet. Our infrastructure is so undeveloped and does not have the ability to support the whole country with such facility. We all know that poverty is a curse. But no on can deny the fact that this curse is surrounding us from all sides. In our country the literacy rate is only 53% (UNICEF, 1999) and almost half the population lives below the poverty line. Most people still remain unaware of consumer protection or consumer vigilance concept The use of internet or e-commerce to be successful in Bangladesh largely depends up to the philosophy of businessman. Its operation will be only successful when the business man believes that it’s less costly, efficient, convenient, effective, faster and competitive. In fact it’s not sufficient only believe of the businessman. In reality it must be profitable. But in Bangladesh there are some conservative businessman who is not willing to change their current venture style. Some people believe that use of internet will reduce the employment rate, as result per capita income will fall and national economy will on crisis. Some also think that using internet or e-commerce is an expensive venture which can not be afforded.The future of e-commerce in Bangladesh may be prosperous. Because day by day theliteracy rate of our country is increasing. Today’s young generation is being inclined totechnology more and more. They are very interested to discover any new technological
  • 8. offering and advantages. Although ours is poor country majorities of our educated peopletoday has a personal computer and have access to the internet. Companies are alsobecoming more and more technology oriented. To remain competitive in the industry, tosustain in this competitive age of globalization it is must to use internet to get updatedinformation about market changes, opportunities and threats.Now in Bangladesh there are many multinational companies operating with successfuloperation. As they are multinational they have there own intranet service as well asstrong communication network of internet in the field of education will also notice thatthe knowledge of computer is also a mandatory to know. In Bangladesh we can see nowthat from the very beginning level of school the computer is being taught how to operate.There are different types of compulsory subject on computer in different stages ofeducation. In our country most of the internet users are the students, teachers, employees,employers, researchers and all classes of educated people. Almost all educated person hasaccess to the internet now a days. it is not at all a matter of being surprised that not onlythe professional but also the housewives are also using computer and internet.This kind of inter users group are mainly the ultimate potential customers of all productoffered by e-commerce. As a result in spite of having poor and deprived population thereare lots of people who are blessed with all the resources, facilities and luxuries of thesociety in order to enjoy superior facility provided by the new world. These classes ofpeople may make the future of e-commerce bright and a profitable venture inBangladesh.If we try to dream about making the future of e-commerce successful we have to increasethe use of internet and develop a favorable environment.E commerce has great potential future in Bangladesh. So the govt. should be favorablewith their legal restriction and take necessary steps to make the country infrastructural
  • 9. developed and eligible with favorable environment for all operation of ecommercesuccessfully.Without the help of govt. this is not possible o make the operation of it successful inBangladesh.It is a matter of the very much delightment for us that our current govt. has taken aproject to make the country fully digital. If this dreams our prim minister Sheikh Hasinacomes true then it is not needed to say that there would be no alternative of implementinge commerce in all possible sector of business.RECOMMENTATION:To make ecommerce successful in our country we need the help of all aspect of people aswell as govt. and business industry to cope up or overcome the following limitations: 1. access to computer of household should be increased 2. the cost of using internet should be affordable to general people 3. user of software should be more simple for the easier use 4. Its use should be made as easy as TV and newspaper so that it require unsophisticated skill. 5. The ecommerce should be more attractive to user in order to offset the limitation of lack of experience of meeting directly with merchant and customer. Laudon,2008,p:63
  • 10. LIST OF REFFERENCE:Century the Next Challenges, October, Dhaka.Goldstein, Andrea and O’Connor, David. Undated. E-commerce for Development:Prospects and Policy Issues, Organization for Economic Cooperation andDevelopment (OECD).Laudon C. K. , Traver C.G.,’Ecommerce’ (4th edition), India, Sanal PrinterHossain, Najmul, 1994. Export Prospects of the Electronics Industry in Bangladesh,http://www.jobsproject.org/content/publication/E-Commerce_in_Bangladesh_status.pdfhttp://www1.american.edu/carmel/ap1579a/ecom.htmKotler P., Marketing Management,12th edition, USA,Prentice HallPricewaterhouseCoopers, 1999. Bangladesh Telecommunication Sector ReformProject, DhakaPricewaterhouseCoopers, 1999. Bangladesh Telecommunication Sector ReformProject, DhakaThe Asia Foundation, 2000. Bangladesh Export-Apparel Industry: Into the 21stThe World Bank Residence Mission, Bangladesh.Turban, 2004:04UNICEF, 1999. Progotir Pathey: Achieving the Goals for Children in Bangladesh,Dhaka