This document provides an overview of e-commerce in Bangladesh. It discusses the definition and history of e-commerce, the different dimensions of e-commerce including business to business, business to consumer, and business to government. It also outlines some of the major sectors involved in e-commerce in Bangladesh, examples of e-commerce companies, constraints to e-commerce development like infrastructure and skills shortages, and the prospects and benefits of further e-commerce growth.

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E-COMMERCE IN BANGLADESH
Introduction:
Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and
selling of goods or services using the internet, and the transfer of money and data to execute
these transactions. Ecommerce is often used to refer to the sale of physical products online, but it
can also describe any kind of commercial transaction that is facilitated through the internet.
Whereas e-business refers to all aspects of operating an online business, ecommerce refers
specifically to the transaction of goods and services. It combines a range of process such as:
 Electronic Data Interchange (EDI)
 Electronic mail (E-mail)
 World Wide Web (WWW)
 Internet Applications
 Network Applications
It does not include transactions over telephone, fax or any payments made online for transactions
whose terms were negotiated offline or by physical means. Basically E-Commerce involves the
sale or purchase of goods or services over computer mediated networks. These goods or services
may be ordered through these networks, but payment for them and the ultimate delivery of the
goods and services may be conducted on or off line Some common applications related to
electronic commerce are the following:
 Email
 Instant messaging
 Online shopping and order tracking
 Online office suites
 Online banking
 Shopping cart software
 Electronic tickets
 Enterprise content management
 Newsgroup
 Teleconferencing
 Domestic and international payment system
E- commerce: Electronic commerce commonly known as E- commerce which consists of the
buying and selling of the products or services over electronic systems such as the internet and
other computer networks.

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History of E-Commerce:
 In 1950‟s companies began to use computers to store and process internal transaction
records.
 By 1960‟s businesses that engaged large volume of transaction had begun exchanging
transaction information on punched card.
 In 1968 Transportation Data Co-ordination Committee (TDCC) was formed by some
companies
 In 1979 ANSI (American National Standards Institute) chattered a new committee to
develop uniform EDI (Electron Data Interchange).
 In 1979: Online shopping was invented in the UK by Michael Aldrich.
 In 1982: Mintel was introduced nationwide in France by France Telecom and used for
online ordering.
 In 1984: World's first recorded B2C online home shopper. Mrs. Jane Snowball uses the
Gate shead SIS/Tesco system to buy groceries.
 In 1987: Swreg begins to provide software and shareware authors means to sell their
products online through an electronic Merchant account.
 In 1990: Tim Berners-Lee writes the first web browser, World Wide Web, using a NeXT
computer.
 In 1992: J.H. Snider and Terra Ziporyn publish Future Shop: How New Technologies
Will Change the Way We Shop and What We Buy. St. Martin's Press. ISBN
0312063598.
 In 1994: Net scape releases the Navigator browser in October under the code name
Mozilla. Pizza Hut offers pizza ordering on its Web page. The first online bank opens.
Attempts to offer flower delivery and magazine subscriptions online. Adult materials also
become commercially available, as do cars and bikes.Netscape1.0 is introduced in late
1994SSLencryption that made transactions secure.
 In 1995: Jeff Bezos launche Amazon. Com and the first commercial-free24 hour,
internet-only radio stations, Radio HK and Net Radio start broadcasting .Dell and Cisco
begin to aggressively use Internet for commercial transactions .eBay is founded by
computer programmer Pierre Omidyar as Auction Web.

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Dimensions of E-Commerce:
The three dimensions of e-commerce are: Business-to-Consumers (B2C) Business-to-Business
(B2B) Business-to-Government (B2G) B2C e-commerce is unlikely to be of much use in the
near future in Bangladesh because of low per capita income, a weak infrastructural and legal
environment, lack of trust between business and consumers. B2C for cross border trade is also
limited by the factors suggested for the domestic front. In addition, non-availability of
international credit cards, foreign currency remittance restrictions, delays and informal payments
at customs clearance even for small value and quantity items will discourage B2C.
Figure: Depicts the three dimensions of e-commerce.

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Example of different types of E- commerce:
Business to Business (B2B) Sindabad.com
Business to Consumer (B2C) Bagdoom.com; Daraz.com;
Business to Government (B2G) Government e-shop policy in Bangladesh
Consumer to Consumer (C2C) Bikroy.com ; clickbd.com
Business to Employee (B2E) Bdjobs.com ; Chakri.com
Why e-Commerce for Bangladesh:
With the increasing diffusion of ICTs, more specifically the Internet, the global business
community 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, by
which they can compare prices across regions, find out whether prices vary by order frag
mentation, get awareness about substitute/ alternative products. Consequently, the sellers/
exporters make sure that they are well portrayed in the cyber world through websites and portals.
Like buyers, sellers also benefit from increased and more efficient access to the global market
through the Internet .Bangladesh is 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 are well prepared to meet the requirements and expectations of the
importers and also stand out in the competition against exporters in other countries. In such a
scenario, 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 context, and two, whether businesses have
effective presence and participation in the cyber world. International organizations such as
UNCTAD (United Nations Center for Trade and Development) and WTO (World Trade
Organization) have, over the last several years, put much emphasis on the importance of e-
Commerce for developing countries. UNCTAD has special programs to facilitate developing
countries to transition into e-Commerce. The WTO has also developed rules and guidelines for
global e-Commerce transactions.
A huge digital divide exists among the city of Dhaka, Chittagong and other parts of the country.
Private-public partnership is a crucial issue for information and communication technology
(ICT) development and application. Private enterprise and capital can lead ICT revolution in
Bangladesh. This, however, would require the government to provide the basic business
environment. Rapid growth in ICT is not possible without massive investments for ICT
infrastructure and human resource development in the computer and electronics l and
telecommunication engineering courses through ensuring quality education. Still now call charge
of cell phone is not competitive in Bangladesh. Under the private initiative, Internet was started

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in 1996 by ISN in Bangladesh. ISN is the first ISP operator in this country. Still now all the
Internet service providers have the server in abroad, for which they are facing competitive
disadvantage, as cost remains high. Security problem is still high in this country. In this
connection it may be stated that Bangladesh bank is trying to implement automated
clearinghouse through utilizing (Magnetic Ink Character Recognizer) MICR procedure. But in
developed nations MICR procedure is now replaced by more sophisticated procedure such as
cheque truncation process. Total numbers of Banks in Bangladesh are forty seven. Banking
sector in Bangladesh on the basis of utilization of electronic devices can be subdivided into three
groups: i)Foreign Commercial Banks and Private Commercial banks especially 2nd(except few
banks) and 3rd generation Private Banks :Fully Online banking; ii)1st generation private banks
and some 2nd generation Private Commercial Banks: Medium range Online banking system
;iii)Nationalized Commercial Banks , Specialized Banks and Few foreign Bank branches of this
subcontinent :Low grade online banking system.
At present the banks in Bangladesh are using the limited electronic banking services. It is
expected that bank can attain more profit and offer better services to its customers by,
introducing on line banking facilities. The foreign commercial banks operating in Bangladesh
like Standard Chartered Bank, City Corp. N.A. and the HSBC are the pioneers to introduce the
electronic banking facilities. They provide ATM, Debit Card, Credit Card, Home Banking,
Internet Banking, Phone Banking, on line banking etc. services.
E-commerce Practice in Bangladesh :
E-commerce in Bangladesh actually stated in the year of 1999 based in USA with some non-
resident Bangladeshis. This people opened some Bangladeshi sites focused on providing local
news and some transactional things like sending gift items to Bangladesh. www.munshigi. com
is the first ever Bangladeshi e-commerce web site.

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Figure: Comparison between Bangladesh and other countries.
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.

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• Online Transportation System, Hotel Management and Tourism etc
Overview of implementation stage of e-Commerce in Bangladesh:
Ministry of Commerce, Ministry of Information and Communication and Planning Commission
jointly implementing the e-commerce in Bangladesh
 There is e-Commerce committee headed by commerce secretary
 Ministry of Information and Communication is working for enacting a law regarding
“Electronic Transaction act”
 Online order from foreign buyer has started
 www.registrarofcompniesbangladesh.com here registration of joint stock company
started as online
 Online non-financial transaction has started by all bank from 31-7-2002
 Intra-bank transaction started from 31-7-2003
 Some bank already started credit card system in a limited way
 About 2 months Bangladesh Bank give permission of Ecommerce in local currency
through banks within the country.
Constraints to E-Commerce in Bangladesh:
Out of 64 districts, Internet services are available only in 6 major district headquarters. BTTB is
planning to gradually roll out an IP network up to the 64 district headquarters. In January 2002,
the Internet facilities were extended to 12 districts. The project is running on very fast and today
almost 40 plus districts are getting Internet facilities. Followings are the barriers of e-commerce
in Bangladesh:
 Very minimum number of users of web sites
 Poor telecommunication infrastructure with limited fixed-line access, unreliable
connectivity and low bandwidth (9K)
 High price of computer and hardware: The per capita income of our people is less than
US$520. But in order to buy a computer it is needed US$500 and for this reason, it is
beyond the capacity for a villager‟s to buy it.
 Lack of technically efficient personnel
 Lack of investment in hardware and software

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 The banking infrastructure in terms of electronic payments and inter-bank connectivity
is poor. As such, the customers of 5770 branches of the local banks are unable to operate
their account with the other branches of the same bank. Inter-bank transaction is more
cumbersome as the clearing-house of the central bank is not online. An inter-bank
transaction may take even 2 weeks if the branches are different cities. Only branches of
the private banks are interconnected with their respective head offices. They are also
satisfactorily computerized. This represents only 25% of the entire banking sector.
 Small number of Credit Card users
 Limitations of supportive legal system such as, exchange controls, protection of
telecommunication monopolies, restrictive trade practice and prohibitions
 Absence of cyber law
 People's mindset and very slow and expensive Internet services
 Enterprise managers' lack of initiative and leadership in taking advantage of
ecommerce.
Some E-Commerce Shop in Bangladesh:
 www.webbangladesh.com
 www.haatbazar.com
 www.number1shop.com
 www.bdbazar.com
 www.bengalcommerce.com
 www.sonarmarketplace.com
 www.upoharbd.com
 www.bdgift.com
 www.cellbazaar.com

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List of different e-commerce-type web sites:
 www.chorka.com
 www.hutbazar.com
 www.cellbazar.com
 www.muktabazaar.com
 www.bikroy.com
 www.banglacommerce.com
 www.bdjobs.com

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 www.premium.com
 www.shoppingcard.com
 www.Ecommercebank.org
 www.kroybikroy.com
 www.kholabazar.com
 www.bestway.com
 www.sonalibangla.com
 www.e-bangla.com
 www.bajna.com
 www.bangladeshinfo.com
 www.bdbazar.com
 www.bdquery.com
 www.quickezine.com
 www.Webbangladesh.com
 www.deshigift.com
 www.bangla2000.com
 www.banglabaskets.com
Potentials of E-commerce for Bangladesh:
 Network Infrastructure
 Intra-bank and Inter-bank Connectivity
 Local and Global
 Bank-Client Connectivity
 Security of transaction
 Banking mechanism
 Automation
 Convertibility of the Bangladesh currency
 Retention quota
 International credit cards
 Capacity Building: Human, Technical and Regulatory
 Quick Settlement, Online credit Information, Skilled e-Manpower,
 Regulatory Framework
 Investment
 Legal Infrastructure
 Currency Convertibility: Access to Global Finance
 E- Culture

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Applications:
 Email
 News groups
 Online shopping and order tracking
 Online banking
 Instant messaging
 Domestic and international payment systems
 Tele conferencing
 Electronic tickets
Prospect of e-commerce in Bangladesh:
Bangladesh has great prospect for e-commerce. At present Information Technology (IT) is a
subject of widespread interest in Bangladesh. There are around 100 software houses, 35 data
entry centers, thousands of formal and informal IT training centers and numerous computer
shops. The Government has declared IT as a thrust sector and that computer training center
will be set up in each divisional and district headquarters of Bangladesh. Import of computer
hardware and software is now duty free, VSAT is deregulated, and high speed DDN (Digital
Data Network) has been introduced. One fourth of the 45 recommendations of JRC report on
software export have already been implemented; rest is in the process of implementation. A
tremendous activity is going on in every sector including e-commerce, e-governance,
computer networking, Internet, web browsing, web applications, multimedia product
development etc.
Benefits of e-commerce in Bangladesh:
The primary advantages of ecommerce revolve around the fact that it eliminates limitations
of time and geographical distance. In the process, ecommerce usually streamlines operations
and lower costs.
 Remain open all the time.
 Low operational cost and better quality of services.
 Overcome geographical limitations.
 Gain new customers with search engine visibility.
 Locate the product quicker.
 Eliminate travel time and cost.
 Provide comparison shopping.
 Enable deals, bargains, coupons, and group buying.
 No need to physical company set-ups.
 Easy to start and manage a business.

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 Provide abundant information.
 Create targeted communication.
 Create markets for niche products.
 Improved customer service to clients it results in higher satisfaction and more sales.
 Lower communication cost.
 Enables a very specialized niche market.
 Helps some small businesses compete against large companies.
 Higher margins.
 Information sharing, convenience and control.
Limitations of e-commerce in Bangladesh:
Problems of e-commerce in Bangladesh: E-commerce has the potentiality to which local and
foreign companies have started showing their interest about our country. If they are to give a
proper facility and environment, they will be interested in doing business here. Foreign investors
are really interested in this sector. As a result, local people from abroad are keeping an eye with
this digital business. Data entry industries also depend on the expansion of e-commerce. We
need overall perfect and pragmatic guidelines so that we can structure this digital business
efficiently and effectively.
Following basic infrastructure problems that exist in e-commerce sector of our country.
 Due to financial constraint most of our people are poor. So they can't bear the cost of
Internet.
 They are not conscious about e-commerce.
 Purchasing products through online is costly. So people are not interested.
 We have a few numbers of e-commerce sites. They can't provide sufficient Services.
 We don't have adequate regulations regarding e-commerce business.
 There is no guarantee of product quality.
 Ecommerce does not allow you to experience the product before you purchase.
 Anyone can setup an ecommerce website.
 Customer relations problems.
 Perception that EC is expensive and unsecured.
 Unresolved legal issues.
 Lack of national and international government regulations and industry standards.

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 Anyone can start a business, and there are many bad sites which eat up customer’s
money.
 Many goods cannot be purchased online.
 Ecommerce delays goods.
 Ecommerce lacks that personal touch.
 Lack of universally accepted standards for quality, security, reliability.
 There are many hackers who look for opportunities, and thus an ecommerce site, service,
payment get wells, all are always prone to attack.
Future of e-commerce in Bangladesh:
 Now-a-days e-commerce is most popular in the world. Many organizations start their
business through internet in Bangladesh. Bangladesh government has taken a goal to
digitalize Bangladesh which plays an important role in e-commerce of Bangladesh.
 E-commerce in Bangladesh actually stated in the year of 1999 based in USA with some
non-resident Bangladeshis. This people opened some Bangladeshi sites focused on
providing local news and some transactional things like sending gift items to Bangladesh.
www.munshigi. com is the first ever Bangladeshi e-commerce web site.
 The future of e-commerce in Bangladesh may be prosperous. Today’s young generation
is being inclined to technology more and more. They are very interested to discover any
technological offering and advantages. Although ours is poor country majorities of our
educated people today has a personal computer and has access to the internet. Companies
are also becoming more and more technology oriented. To remain competitive in the
industry, to sustain in this competitive age of globalization, it is must to use internet to
get updated information about market changes, opportunities and threats.
Recommendations:
The followings are some of the recommendations that will ensure the smooth functioning as well
as the wide spread use of e-commerce in Bangladesh.
 Bangladesh Telecommunications Regulatory Commission (BTRC) should be established
independent of the government control.
 Voice over Internet Protocol (VoIP) and private international gateway for voice and data
should be allowed.

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 The number of pre-shipment agents (PSI) should be increased. The size of fines and
penalties on PSIs should be increased for breach of rules and regulations.
 Posting of government documents and publications including budgetary information on
the Web should be instructed.
 Contracts and other alternates to Letter-of-Credit (L/C) should be allowed as legal
methods for international transactions.
 Foreign exchange controls on travel and for business should be relaxed.
 BTTB‟s monopoly in the nationwide long distance services should be ended.
 The control of foreign exchange should be liberalized gradually, and issuance of
International Credit Cards should be allowed.
 Government officials are to be oriented on the benefits of e-commerce. For instance short
course can be offered at training centers such as the Public Administration Training Center
(PATC).
 Business associations and organizations should be made aware of the benefits of e-
commerce. BGMEA can play a significant role in this.
 Greater competition among the Internet Service Providers (ISPs) should be promoted and
new ISPs should be encouraged to come into business.
 Revise and update ageing laws on trademark, copyrights and evidence.
 Court procedures should be simplified and expedited. Administrative and institutional
constraints in settling disputes should be removed.
Conclusion:
Not so many days have passed that Internet comes to our country. The success of e-
commerce in our country is mare. The total number of ecommerce site in our country is forty,
where in India there one thousands of e-commerce related businesses. In this sense e-
commerce industry is not flourished in our country. We are still in the learning phase if we
consider ourselves in context of developed nations. At present a small number of e-
commerce business are running profitably in this country though a large number of e-
commerce related companies couldn’t even able to reach their break-even point. Some of the
businesses are already been shut down. So, present situation is not very enlightening. We
have to take drastic measures to improve the conditions of e-commerce industries of this
country.

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References:
1. International Telecommunications Union, Millennium, October 1999, Geneva
2. http://www.assignmentpoint.com/business/banking/e-commerce-in-bangladesh.htm
3.https://www.slideshare.net/rakibrashed2011/e-commerce-in-bangladesh-status-constraints-
potentials-md-abdur-rakib?from_action=save
4. http://www.iosrjournals.org/iosr-jbm/papers/Vol20-issue3/Version-5/B2003051015.pdf
5. https://jst.hstu.ac.bd/assets_vcc/files/vol_5/10.pdf