Status, Potential & Constraints of E-Commerce in Bangladesh

1. 1
Ahsanullah University of Science and Technology
Assignment on “ Status, Potential & Constraints of E-
Commerce in Bangladesh”
Submitted to:-
x
Assistant Professor,
Schoolof Business
Ahsanullah University of Science and Technology
Submitted by:-
Name: Fahim Shahriyar

2. 2
Letter of Transmittal
To,
x
Assistant Professor,
Schoolof Business
Ahsanullah University of Science and Technology
Sub: Letter of Transmittal
Dear sir,
It is indeed a great pleasure for me to be able to hand over the assignment on
“Status, Potential & Constraints of E-Commerce in Bangladesh”. This
assignment is the result of the knowledge which has been acquired from the
respective course.
I tried my level best for preparing this report. The information of this report is
mainly based on Internet information. Some other details were gathered from
the text book. I gave my hundred percent for making this report come together.
I, Hope you will appreciate my work and excuse the minor errors. Thanking you
for your cooperation.
Sincerely,
Fahim Shahriyar

3. 3
Table of Contents
Contents Page no
Introduction 4-5
What is E-commerce 4
Types of E-commerce 4-5
Status of E-commerce in Bangladesh 6-16
E-Commerce in Bangladesh 6
Why E-commerce for Bangladesh 7
Number of E-commerce and F-commerce in Bangladesh 8-9
E-commerce Users in Bangladesh 10
E-commerce traffic in Bangladesh 11
7 Trending Products to Sell Online 12
Popular E-commerce site in Bangladesh 13-16
The Potential of E-commerce in Bangladesh 17-18
Future Growth Areas 18
Constraints to E-Commerce in Bangladesh 19-20
Conclusion 20
Reference 21

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Status, Potential & Constraints of E-Commerce in
Bangladesh
Introduction:-
E-commerce: E-commerce means buying and selling of goods, Products or
services over the internet. E-commerce is also known as Electronic Commerce
or internet commerce. All services provided online over the internet network.
There are some services which are provide by e-commerce such as:-
 Online Banking
 Hotel Booking
 Online shopping and order tracking
 Transportation tickets booking
 Domestic and international payment system etc.
Types of E-commerce: E-commerce is divided mainly to four categories
 B2B (Business to Business)
 B2C (Business to Customer)
 C2C (Customer to Customer)
 C2B (Customer to Business)
There are also some other categories in E-commerce:-
 B2G (Business to Government)
 B2E (Business to Employee)

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B2B: This is Business to Business transactions. Here the companies are doing
business with each other. The final consumer is not involved. So the online
transactions only involve the manufacturers, wholesalers, retailers etc.
Example: bizbangldesh.com, bgmea.com.bd etc.
B2C: Business to Consumer. Here the company will sell their goods and/or
services directly to the consumer. The consumer can browse their websites and
look at products, pictures, read reviews. Then they place their order and the
company ships the goods directly to them.
Example: Amazon.com, Flipkart.com, Ajkerdeal.com, Daraz.com.bd etc.
C2C: Consumer to consumer, where the consumers are in direct contact with
each other. No company is involved. It helps people sell their personal goods
and assets directly to an interested party.
Example: OLX.com, ebazzar.com, bikroy.com etc.
C2B: This is the reverse of B2C, it is a consumer to business. So the
consumer provides a good or some service to the company. Say for example an
IT freelancer who demos and sells his software to a company. This would be a
C2B transaction.
Example: freelancing.com, fiver.com, upwork.cometc.
B2G: Business to Government is usually used for licensing process, public
purchasing and other government operations. B2G e-commerce is rather
insignificant when compared to the other three forms. Many branches of
government are dependent on e-services or products in one way or another,
especially when it comes to legal documents, registers social security, fiscals
and employment. Businesses can supply these electronically. However, B2G
can be one of the driving forces for running the public sector known as e-
governance.
Example: Income tax, E-Tendering etc
B2E: electronic commerce uses an inter business network which allows
companies to provide products and/or services to their employees. Generally,
companies use B2E networks to automate employee-related corporate
processes.B2E portals have to be compelling to the people who use them.
Example: BDjobs.com, kormo.com etc

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Status of E-commerce in Bangladesh:
E-Commerce in Bangladesh:
E-Commerce started in Bangladesh in the late 90s. The earlier E-Commerce
sites were actually gift sites targeted the Non-Residential-Bangladeshis living in
abroad. All the websites were based in abroad and had branches in Bangladesh.
Non-residential-Bangladeshis would buy various products for their families or
loved. Ones and pay in credit cards and those sites would deliver the product to
their families or friends in Bangladesh.
Now a day’s use of technology is became very common in each and every
sectors. In this era of globalization we can hardly find that any sector which is
operating without using technology. So there is no doubt that business world
will also use technology effectively as well as efficiently and take the greatest
advantage which is offered by technology. Internet is one of the largest
blessings of technology for the world, which enables people from the distant
parts or county to interact or communicate easily. It has made the whole globe a
single village and very easy accessible format.
A new horizon has been opened up for trade and commerce, namely electronic
commerce (ecommerce) by none other than one and only internet. E-commerce
entails the use of the Internet. In the online shopping and tracking, marketing,
banking transaction, online payment and delivery of goods and services all are
done by e-commerce using internet.
The advancement of technology is a continuous process and always makes
updated the world. Now a day’s buyers and sellers both have much power
because of the massive use of many powerful technology as well as internet.
Now a day’s Most of the business are operating under the e-commerce criteria
over digital networks or internet. Internet connects the people with companies
and companies are also connected with people and their suppliers.

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Why E-commerce for Bangladesh:
With the increasing spreading of ICTs, more specifically the Internet, the global
business community is expeditiously moving towards Business-to-Business
(B2B) in e-Commerce. The buyers or importers gain a big advantage when the
Internet gives them access to the global market, by which they can compare
prices across province. So that, they can find out whether prices vary by order
fragmentation and get awareness about alternative products. Accordingly the
exporters make sure that they are well re-presenter in the cyber world through
websites and portals. Buyers and sellers also benefited from increased and more
efficient access to the global market by using the Internet. Bangladesh is
pursuing an economic policy of export-led growth. For the purpose of rising
forces of globalization, it is becoming increasingly important for the private
sector. Specifically the export sectors are well prepared to full fill the
requirements and expectations of the importers and also stand out in the
competition against exporters in other regions. For this reason, two issues are
becoming particularly important for Bangladeshi export sectors.
one, whether businesses are automating their internal processes with the use of
ICTs to become increasingly efficient and competitive in a global conditions,
and two, whether businesses have effective presence and participation in the
cyber world., over the last several years International organizations such as
UNCTAD have put much attention on the importance of e-Commerce for
developing regions. UNCTAD has special programs to facilitate developing
regions to move into e-Commerce. The WTO has also developed rules and
regulations with guidelines for global e-Commerce transactions.
There are some different sectors ofe-commerce in Bangladesh such as:-
 Banking sectors (online banking and transactions)
 RMG sectors
 Online shopping and order tracking
 Online payment method
 Bill payment (gas, electricity etc)
 Web hosting and domain purchasing and maintaining
 Education system
 Transportation sectors (buying or booking tickets) etc.

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Number of E-commerce and F-commerce in Bangladesh:
According to commerce associations of Bangladesh at present there are
approximately 2,000 e-commerce sites and 50,000 Facebook-based outlets
delivering almost 30,000 products a day. Currently, 80 per cent of the online
sales are taking place in Dhaka, Chattogram and Gazipur. Online transactions
in Bangladesh have been increasing over the years.
E-commerce growth rates and usages statistics in Bangladesh:
In Bangladesh retail e-commerce is growing at 83.58 per cent a month. At
present, more than 70,000 individuals and above 45,000 small and medium
enterprises (SMEs) are part of this sector. Till 2020, the number of e-commerce
business sites and e-commerce pages equaled 4,500 and 270,000 respectively. It
was estimated that the number of deliveries per day added up to about 25,000 to
30,000 at the retail level.
0
500
1000
1500
2000
2500
2017 2018 2019 2020
Bangladesh e-commerce market size
Bangladesh e-commerce market
size

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E-commerce Trend in Bangladesh: Here is the last 5 years to present scenario
of e-commerce in Bangladesh (2015-2020)
Here is the present scenario (last 12 months) of e-commerce in Bangladesh:
Here is the interest by sub regions of e-commerce in Bangladesh (last 12
month):

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Source: https://trends.google.com/trends/explore?q=%2Fm%2F02m96&geo=BD
E-commerce Users in Bangladesh: The most actively involved e-
commerce users in Bangladesh falls under the age bracket of 25-34 years where
53% are male & 47% are female on the total activity. New online shopping
visitors stand at 66% of the total traffic, while returning visitors are 80% [7]
85.5% of the respondents surveyed have bought things as varied as books or
show tickets online at least once in the last 12 months, while 21.4% have
considered online shopping but have not progressed till product purchase phase
yet. 58.2% of the online shoppers are occasional buyers, meaning they
sometimes buy things online. About 36.7% of these online shoppers have been
frequently buying things online. Most of the customers are using buying digital
accessories, Fashionable items and online transactions.
Fig: The E-commerce Age Brackets & Statistics in Bangladesh
20
30
25
15
8 2
Age group users
10---20
20---30
30---40
40---50
50---60
60---70

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Source: https://www.smartinsights.com/wp-content/uploads/2019/11/Retail-
e-commerce-conversion-rates-by-sector.png
E-commerce traffic in Bangladesh: Over 80% of e-commerce
traffic comes from three major cities in Bangladesh; Dhaka is top with 35%
of total traffic, closely followed by Chittagong at 29%. But Gazipur in third
place with 15% of the total e-commerce activity each year will come as a
surprise to many.
Source: https://www.smartinsights.com/wp-
content/uploads/2020/02/Screenshot-2020-08-13-at-12.41.19-700x280.png

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Source: https://seoaudit.agency/ecommerce-site-bangladesh/
7 Trending Products to Sell Online: There are some trending
products which are always most sell in E-commerce websites.
1. Food & Beverage
2. Mobile Phones
3. Fashion & clothing items
4. Beauty and personal care items
5. Footwear
6. Jewelry
7. Electronic goods
8. Furniture
9. Computer hardware
10.Handicrafts

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Popular E-commerce site in Bangladesh: In our growing
economy of Bangladesh, people are more intended to go for options of
convenience and are less concerned about price while shopping. People getting
more occupied with other tasks these days. Therefore, they search for easier,
trustworthy and applicable online shopping options where they can shop
anytime as online shops are open 24/7.
1) Chaldal.com: Chaldal.com is an online shop for home appliances, food
items, health and beauty products but mainly popular for its grocery items
which we need in our day to day life. Their main motto is to save their
customers valuable time. This is why they deliver every day needs as fast as
possible to their customers’ door-steps across Dhaka. Recently chaldal.com is
promoting their deals and offers through all the possible channels like
Facebook, Viber, SMS etc which help them to make a huge customer platform
for their business.
In pandemic situation it becomes most popular in e-commerce sites in
Bangladesh. The site has been facing a considerable increase in sales as people
are turning into the Chaldal site to order their groceries as people are unable to
go out to get groceries by themselves due to the pandemic.

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2) Daraz.com.bd: Daraz BD is one of the leading online shopping sites with
a wide selection of electronics, fashion and home appliances. Currently, this is
the number one online shopping website in Bangladesh considering the
popularity. Daraz started their journey in March, 2015 in Bangladesh. They
offer great deals on discount offers, installment facilities and warranty. Daraz
Bd also provide with product delivery and pickup options. They have different
payment options including VISA card, Bkash payment and cash on delivery.
Daraz also claim 100% authentic productcollection.
In pandemic situation it also becomes a most popular and helpful e-commerce
website id Bangladesh. Also their home appliance section is booming as people
need to do most of the house chores by themselves and Daraz offers the biggest
home appliance section through their website.
3) Rokomri.com: Rokomari.com is one of the most trusted e-commerce sites
in Bangladesh for purchasing books of different interest. It has been operating
since 2012 and the most amazing part they have their own home delivery
system in Dhaka, Chittagong, and Rangpur. Besides books, they also sell
electronics and accessories at very reasonable prices. They provide great deals
in books and electronic products. They are providing cash on delivery,
MasterCard, VISA card, Bkash, and DBBL as a payment system.

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4) Ajkerdeal.com: ajkerdeal.com is also one of the familiar websites in
online shopping. Furthermore, they are specialized in updating offers, current
necessities etc. They also provide cash on delivery, Bkash, DBBL, MasterCard,
VISA card etc. options for payment.
In pandemic situation Ajkerdeal is a popular e-commerce platform in
Bangladesh selling a wide variety of products. And as the pandemic has
caused a severe lockdown in the country, Ajkerdeal has adopted to selling
PPEs, healthcare products, groceries, and other essentials to help out the
people during these tough times.
5) Pharmacy.com: Medicine and other healthcare products are essential to
many people. And due to the quarantine lock-down, many people are not able to
procure their medicines and such, leaving them to further health risks.
Pharmacy.com is the leading online pharmacy store who has been seeing a
substantial rise in sales as they are one of the few e-commerce businesses that
have brought the pharmacy to a digital storefront.

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6) Meenaclick.com: Meena Bazaar is one of the biggest departmental store
brands in Bangladesh. With the Meenaclick, Meena has entered the e-commerce
industry and is catering essentials and groceries to the people who are unable to
go to a store physically due to the pandemic.
7) Sheba.xyz: Sheba.xyz is an online marketplace where people of
Bangladesh can look for services such as cleaning, repairs, and delivery. As the
lockdown in the country has made people unable to go out for essentials, Sheba
has introduced grocery shopping, healthcare, and emergency services to meet
the ongoing demands throughout the quarantine.

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The Potential of E-commerce in Bangladesh:
Now a day’s internet is most essential and most important things for the world.
It’s become part and parcel in or life without internet we can’t do anything
because of most of the sectors are now work process with the internet and it’s
become so easy accessible with the internet. Also internet is use for e-commerce
by the Bangladeshi product produce by the producers to export as well as to
access inputs will be dependent on their willingness and ability to use this
medium as well as that of the buyers of final products and the sellers of
intermediate goods and services.
Future Growth Areas: There are other remarkable drivers of growth of e-
commerce in Bangladesh, which we are expected to play a more major role in
the next 5-10 years. Most of these drivers are applications and services being
conceptualized and implemented by the financial services sector and the
telecommunications sector. Notable among them are e-banking with online
transaction, mobile financial services, mobile agricultural services, online
emergency short treatment system, rural e-commerce, and f-commerce. E-
banking has begun to gain traction in Bangladesh as more users gain comfort in
banking through online portals, allowing banks to cut costs on their services.
Customer satisfaction and future growth of e-banking depend primarily on
assurance, visibility and responsiveness of e-banking portals.10 However, for
increased adoption rates, security of payment continues to be an important
consideration. Ease of operability, security and status are the key drivers for
adoption of Internet banking while accessibility, time and cost are also
important factors. According to industry experts, frequent use of credit cards for
online payments is correlated with the use of e-banking portals by citizens,
pointing to further growth opportunities in this area. Although there is much
hype with regard to mobile financial services (MFS), and tangible business
growth to justify the hype, for service providers such as bKash and Dutch-
Bangla Mobile, there are several products offered by MFS providers that are yet
to grain traction. As for now, the most popular uses of mobile financial services
include:
 Cash exchange
 Inward remittance
 Personal payments
 P2B payments (e.g. utility bills)

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 B2P payments (e.g. salary)
 Government payments
 Online quick emergency treatment systems
 Online e-library for students
However, MFS products such as deposit schemes and loans are still not popular
among users and this is expected to change in the coming years. User openness
to these services is also correlated to their overall financial literacy, according to
industry experts interviewed for this report. Mobile agricultural services are also
expected to play a larger role in the lives and livelihood of farmers and
agricultural sector workers in Bangladesh. As it stands, telecommunications
service providers such as Robi, Banglalink and Grameenphone have services
related to agriculture market information, news and weather updates.
It is also envisioned that for critical issues such as disaster preparedness and
disaster response management, call-data records may provide useful information
to telecommunication companies. Information may also be gleaned with regard
to rural or remote population displacement, while top- 7 up frequency after
disasters can reflect financial status after a disaster (by enabling comparison
between pre- and post-disaster top-up trends). Thus agriculture-related services
are expected to grow in popularity and scope in the future, and gradually
connect to online portals of information and feedback on smart phones. A
related driver for this is the popularity and penetration of smart phones, which
continues to increase as cost of manufacturing these phones go down. Facebook
has become a pervasive metaphor for the demographic dividend in Bangladesh
and its concomitant potential. Facebook has seen several important social and
business applications. Social applications have ranged from coordinated
movements of certain sections of the citizenry, buoyed by different causes and
motives, while on the commercial side, several retailers have either used
Facebook as a platform for sales effectively, transitioned their entire business to
Facebook, or from the outset, used Facebook as the primary mode of
communication with customers. Businesses such as Style World initiated their
journey through Facebook and Shoptobd later moved to designated web pages.
With 25% penetration among the citizenry and contributing to majority of the
Internet traffic, the potential for F-commerce remains quite significant. With
regard to infrastructure development and policy support from the government,
there have been several noteworthy initiatives and in some cases, blueprints for
initiatives.

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Constraintsto E-Commercein Bangladesh:
In this 2020, we can see that the E-commerce system in Bangladesh is much
better than before because of high speed internet in available in Bangladesh. But
despite the high speed internet, some district still does not have a very good
internet system. Internet speeds are good only in urban area but not in rural
areas. E-commerce sites have sprung up in urban areas of Bangladesh only for
internet speed. Because of this, the people of the city are aware of ecommerce
but the people of village have no idea abbot e commerce. Apart from the
problem of high speed internet, many people in Bangladesh are not yet interest
in e commerce sites. Other issue is disused bellow:-
1. The people of Bangladesh have not yet been able to bring full credibility
on e-commerce because the people of Bangladesh are being affected by
scams from these sites.
2. E-commerce sites do not take responsibility for any damage to the
product during delivery because most the e-commerce site uses third
party delivery systems.
3. When selling products, e-commerce sites talk about providing services
warranty and guarantee. But after selling product they do not provide the
service.
4. Sometimes they are not given exactly the product that the customer
ordered.
5. Sometimes the product ordered by the customer is stolen by the delivery
man and some companies are not willing to take responsibility.
6. People's mindset and very slow and expensive Internet services
7. Many buyers are reluctant to by products because of the price fixing of
the products on e commerce.
8. Buyers do not rely on the quality of the products ofe-commerce sites.
9. Sometimes some e-commerce sites say they will deliver the product
with in 2/3 days but they delay to deliver the productin time.
10. Although some products have a return back policy, they are reluctant to
return the product when asked to return it from the e-commerce site or
returning the product is not an easy process forthe customer.
11. People are reluctant to by products with credit card and debit card
because their personal information and bank account information is
likely to be stolen through the website

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12. Sometimes the customer may notice that the products of e-commerce
sites are more expensive than the traditional market.
Due to all these problems, the people of Bangladesh have not yet been able
to use the e-commerce sites very well and are reluctant to by product from
it. I think if e-commerce sites can solve all these problems in Bangladesh
then maybe in future people will be willing to buy products from here.
Conclusion: Today’s e-commerce has a he contribution to make, form
small business to big business. People are now more dependent on e-commerce
sites than ever before e-commerce in Bangladesh is much stronger and more
advanced than before. At present large number of e-commerce sites have been
developed in Bangladesh and they are using these e-commerce sites more that is
why e-commerce sites in Bangladesh improve a lot. E-commerce sites have
allowed many unemployed youth to start their own business. Starting from
students, now many people are getting inspired in this kind of business. These
business are very easy to manage and can be started with very little capital this
is why anyone is very interested in starting this business. Because of these
businesses a lot of unemployed youth are now finding their jobs easily. At
present, E-commerce of Bangladesh is playing a very positive role in covid-19
situation. At present e=commerce site is working in every sector in Bangladesh.
These e-commerce sites are now cater to all the needs of the people. Now
people can shop at home, order their daily necessities and take advantage of
their transportation from e-commerce sites. In addition, people can now enjoy
banking transaction facilities, food delivery parcel delivery and others many
facilities can be use from the e-commerce sites

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References:
1. https://www.toppr.com/guides/business-environment/emerging-
trends-in-business/electronic-commerce/
2. https://www.lightcastlebd.com/insights/2020/06/02/e-commerce-in-
bangladesh-struggling-to-capitalize-on-opportunity
3. https://brainstation-23.com/top-e-commerce-sites-bangladesh-
according-alexa/
4. https://databd.co/stories/delivery-services-in-bangladesh-coping-
with-covid-19-12228
5. https://e-cab.net/
6. https://en.wikipedia.org/wiki/E-commerce_in_Bangladesh
7. https://thefinancialexpress.com.bd/views/views/e-commerce-in-
bangladesh-where-are-we-headed-1578666791
8. https://www.thedailystar.net/business/news/e-commerce-sales-reach-
3b-4-years-1841428
and some chapterof text book