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The Impact of Electronics Commerce in Bangladesh


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The Impact of Electronics Commerce in Bangladesh

  1. 1. 1BadhonSarkerID # 112-11-2104An assignment on the Impact ofElectronics Commerce in Bangladesh
  2. 2. 2Introduction:The Dictionary meaning of E-Commerce is “The conducting of businesscommunication andtransactions over networks and through computers”. E-commerce refers to the buying andselling of products or services over electronic systems through Internet and other computernetworks. In fact, E-commerce is a way of conducting business over the Internet. Though it isa relatively new concept, it has the potential to alter the traditional form of economicactivities. Already it affects such large sectors as communications, finance and retail tradeand holds promises in areas such as education, health and government.Why e-Commerce for Bangladesh:With the increasing diffusion of ICTs, more specifically the Internet, the global businesscommunity is rapidly moving towards Business-to-Business (B2B) e-Commerce. The buyers/importers gain a clear advantage when the Internet gives them access to the global market, bywhich they can compare prices across regions, find out whether prices vary by orderfragmentation, get awareness about alternative products. Consequently, the exporters makesure that they are well portrayed in the cyber world through websites and portals. Likebuyers, sellers also benefit from increased and more efficient access to the global marketthrough the Internet. Bangladesh is pursuing an economic policy of export-led growth. Withthe rising forces of globalization, it is becoming increasingly important that the private sector,particularly the export sectors are well prepared to meet the requirements and expectations ofthe importers and also stand out in the competition against exporters in other countries. Insuch a scenario, two issues are becoming particularly important for Bangladeshi exportsectorsone, whether businesses are automating their internal processes with the use of ICTs tobecome increasingly efficient and competitive in a global context, and two, whetherbusinesses have effective presence and participation in the cyber world. Internationalorganizations such as UNCTAD have, over the lastseveral years, put much emphasis on theimportance of e-Commerce fordeveloping countries. UNCTAD has special programs tofacilitate developingcountries to transition into e-Commerce. The WTO has also developedrules andguidelines for global e-Commerce transactions.Impact of e-Commerce in Bangladesh:Because electronic commerce is still at a very early stage in its development, much of thisthinking is based on speculation on sketchy evidence. These claims can be analyzed bylooking first at price declines in key technologies, whichenables electronic commerce. Theprice declines in these supporting technologies allow firms to reduce its production costs.However, given the intangible nature of e-commerce, new transaction costs are generated,many of which are associated with creating trust and managing some of the risks. The FallingCost of Information and Communication TechnologiesAs electronic commerce is an Internetapplication, it runs on an infrastructure composed of computers, software and communicationsystems and uses theInternet’s key infrastructure applications (e.g. e-mail, world wide web,browser).This group of technologies has supported the development of electroniccommerceand in turn is the source of much of electronic commerce’s value.
  3. 3. 31. Impact on costs related to logistics:A key feature of electronic commerce is the convenience of having purchases delivereddirectly. In the case of tangibles, such as books, this incurs delivery costs. The delivery agentplays an important role in assuring customers that purchases will arrive. Goldman Sachsconducted a survey of prices for a market basket of 30 products sold by Wal-Mart both onlineand offline, while the prices for the two market baskets did not differ by much, the final priceof products purchased online was higher by 9 percent owing to shopping costs. Some portionof the reductionon in firms‟ cost can beattributed to the shifting of costs formerly borne bythe firm to the customer in the form of self-service. For example, customers are now expectedto learn about the product, answer their owncustomer support questions, and pay for shipmentof the product. It is difficult toascertain what portion of the firm’s lower costs is due toshifting and whatportionto actual reduction. As some customers will prefer not to pay thesecosts or toaccept lower quality of service, it may potentially limit reduction.2. Impact on organization:Technology and Organizational Learning Rapid progress in E-Commerce is forcingcompanies of Bangladesh to adapt quickly to the new technology and offer them anopportunity to experiment with new products, services, and processes. New technologiesrequire new organizational approaches. For instance, the structure of the organizational unitdealing with E-Commerce might have to be different from the conventional sales andmarketing departments. The nature of work and employment is transformed in the DigitalAge. Driven by increased competition in the global marketplace, firms are reducing thenumber of employees down to a core of essential staff and outsourcing whatever work theycan to countries where wages are significantly less expensive. The upheaval brought on bythese changes is creating new opportunities and new risks and forcing us into new ways ofthinking about jobs, careers, and salaries.3. Impact on Finance:E-commerce has brought a great impact in our finance system of Bangladesh. Using ATMmachine, people now can banking at any time that changes the customers financial lives andshake the foundations of financial systems.4. Impact on Education:Online learning systems are now available in Bangladesh in which people can take higherstudy. Online learning systems are taken to mean educational structures that include a web-based technological infrastructure, online course material and online enrolment, tutoring,communication, assessment and administration procedures.5. Impact on Business:With the increasing diffusion of ICTs, more specifically the Internet, the global businesscommunity is rapidly moving towards Business-to-Business (B2B) e-Commerce. Bangladeshis pursuing an economic policy of export-led growth. With the rising forces of globalization,it is becoming increasingly important that the private sector, particularly the export sectors
  4. 4. 4are well prepared to meet the requirements and expectations of the importers and also standout in the competition against exporters in other countries.6. Impact on Marketing:In Bangladesh, the cost of delivering information to customers over the Internet results insubstantial savings to senders when compared with non electronic delivery. Major savings arealso realized in delivering digitized products versus physical delivery. Customer service canbe greatly enhanced by enabling customers to find detailed information online. Also,intelligent agents can answer standard e-mail questions in seconds and human expertsservices can be expedited using help-desk software.7. Impact on Manufacturing:E-Commerce is changing manufacturing systems from mass production to demand-drivenand possibly customized, just-in-time manufacturing. Furthermore, the production systemsare integrated with finance, marketing, and other functional systems, as well as with businesspartners and customers. Using Web-based ERP systems, orders that are taken from customerscan be directed to designers and to the production floor, within seconds. Production cycletime is cut by 50 percent or more in many cases, especially when production is done in adifferent country from where the designers and engineers are located.8. Impact on Transportation:The use of the Internet to provide sell-side e-commerce has been widely adopted in thetransportation in Bangladesh. Almost every transportation company offers its customers theability to log onto its Web site to make bookings, and to track and trace shipments.Conclusion:A key reason why e-commerce, especially the business-to-business segment, is growing soQuickly is its significant impact on costs associated with inventories, sales execution,procurement, intangibles like banking, and distribution costs. If these reductions becomepervasive, e-commerce has the potential to be the application that ushers in the largeproductivity gains. Achieving these gains is therefore contingent on a number of factors,including access to e-commerce systems and the needed skills. However, what is uniqueabout e- commerce over the Internet and the efficiency gains is that it promises the premiumplaced on openness. To reap the potential cost savings fully, firms must be willing to open uptheir internal systems to suppliers and customers. This raises policy issues concerningsecurity and potential anti competitive effects as firms integrate their operations more closely