Sujon Koiry grew up in Dhaka without ever knowing financial hardship. Everything changed when his father, who owned a grocery shop, fell critically ill. When Sujon’s father passed away after a long illness spanning two years, he was left almost penniless due to treatment costs.
A private firm employee, Sujon decided launch an online business. He opened a Facebook page called “Lucky’s Dessert,” and started to sell home-made food items. Sujon now makes Tk 20,000 in profit from his online business, and his family no longer suffers any financial crisis.
Like Sujon, e-commerce has become the lifeline for many entrepreneurs. Describing his journey towards financial independence, Sujon told The Business Post, “I was disheartened after my father’s death. I became financially insolvent and I had no money to start a new business.
“If I had started my business in a rented shop, I would have needed at least Tk 5 lakh as advance money, one lakh for equipment, and 4 lakh for goods. But it was impossible for me to invest such a fund.”
He continued, “I noticed that there is a chance to do business using online platform without investing a large amount of money. I planned to start a business selling food items such as homemade sweets.
“I opened a Facebook page a year ago, and invested Tk 500 on the first day to display my items. I received a huge response. My monthly transactions are now around Tk one lakh. I earn Tk 20,000 on average per month. My family and I are happy with our lives.”
Tasnia Akhter Jahan, a housewife, is running a small business named “Manchitro” to support her family. She started her business just eight months ago, but the business transactions are now good enough to break even and make a profit.
“Fashion is my hobby, and I always wanted to start a fashion business. But my dream was difficult to achieve by traditional means as renting and maintaining a showroom is costly. But the online platform is a blessing, and I am optimistic about growing my business.”
Like Sujon and Tasnia, social media platforms are now home to hundreds of new entrepreneurs making a living through business ventures. Many more are dreaming of getting a piece of the action, as traditional businesses require a lot of initial investment, which is impossible for many.
The participation of small entrepreneurs in the e-commerce arena is rising day by day, and alongside them, the big shots are increasing their presence there as well.
According to a 2021 report prepared by E-Commerce Association of Bangladesh (e-Cab), there are more than 2,500 e-commerce platforms in Bangladesh, of which 1 per cent are large businesses, 4 per cent are medium businesses, and 95 per cent are small businesses.
Among the 1,800 e-Cab members, 27 per cent are women, and 73 percent are male entrepreneurs. There are more than 5 lakh Facebook-based business pages in the country, of which, 2 lakh pages are now actively doing business.
Although e-commerce platforms grow at an average rate of 25 per cent per year in Bangladesh, the dropout rate of these new entrants is about 35 per cent, according to e-CAB.
Speaking to The Business Post, e-Cab President Shomi Kaiser said, “We have been demanding Unique Business Identification for the small businesses that are utilising only social media platforms such as Facebook.
“This Unique Business Identification will act as an alternative to trade license. The identification holders will be able to open bank accounts for business transactions.”
She added, “The e-commerce arena will play an important role in the country’s economy. The government should take proper initiatives so that the small businesses can continue their ventures. The market atmosphere and introduction to businesses should be easy and fruitful.”
Md Sayed Ali, the commerce ministry deputy secretary and also coordinator of Central Digital Commerce Cell, said, “The ministry is on the final stage of establishing an authority named “Digital Commerce Authority,” which will issue registration to digital commerce companies.
“I hope all kinds of irregularities and cheating will be reduced significantly after formation of the authority, and the e-commerce sector will get a boost soon.”
Domestic e-commerce market
The e-commerce market size in 2021 was about $5.6 billion, and will be around $10.5 billion by 2026, said the Dublin-based trade research institution ResearchAndMarkets.com.
According to the Centre for Policy Dialogue (CPD), the domestic market size is expected to reach $10.5 billion in 2026, which was $6.6 billion at the end of 2022 and $5.6 billion in 2021.
Bangladesh stands to capitalise on improvements made by the country to bolster e-commerce-friendly infrastructure, according to a United Nations Conference on Trade and Development (UNCTAD) report.
The Rapid eTrade Readiness Assessment by UN found that Bangladesh has laid an essential foundation for a technology-driven and skill-based digital economy, but still needs to introduce a comprehensive national e-commerce strategy and improve delivery logistics.
Rise of e-commerce in Bangladesh
According to e-CAB sources, Munshiji is the first e-commerce venture in Bangladesh, that Munshiji Technology Limited launched in 1999 to export handicrafts, silk, jute products, tea, leather, and leather goods.
The e-commerce platform Evaly commenced its operations in Bangladesh late 2018. The platform soon became a major market player by offering various lucrative offers and huge discounts.
Evaly was, however, later charged with fraud and corruption and its operations were suspended. The Evaly started its business again as it managing director got bail.
Similar allegations were also raised against several other e-commerce platforms, including Alesha Mart, EOrange, Qcoom, Dalal Plus, Dhamaka Shopping, and Sirajgonj Shop. Most of these sites are now shut down.
In 2018, the government published a digital commerce policy as a guideline for e-commerce websites and to ensure consumer rights. In June 2021, the Bangladesh Bank introduced the payment gateway “Escrow Service” to ensure customer rights and stop fraudulent activities.
Mohammad Abdul Wahed Tamal, general secretary of the e-Cab, said, “The e-commerce businesses are doing very well now. In a word, e-commerce revolutionised shopping during the Covid-19 crisis.”
Fuel can be bought online
The residents of major cities in the country will get the opportunity to buy fuel through online platforms. The government has already approved a new policy, allowing online sales and home delivery of diesel, petrol, octane, and lubricant oil.
From homes to factories, the new policy covers fuel delivery for a wide range of needs, including residential buildings, commercial establishments, government offices, commercial generators, heavy construction equipment, and industrial plants.
On January 3 this year, the Energy Division issued a gazette on “Policy on Appointment of Dealers/Suppliers for Sale/Supply of Fuel Products in Mobile Mode through the Use of Digital Technology.”
Dhaka, Chattogram, Khulna, Rajshahi, Sylhet, Mymensingh, Barishal, Rangpur, Cumilla, Narayanganj and Gazipur residents will get this opportunity initially.
Digital commerce authority on cards
The government is going to establish a digital commerce authority with a view to controlling and supervising the digital market. The authority will issue license, fine against the irregularities.
It will also check providing substandard products to the buyers. It can fine three times price of the actual price or award three month imprisonment if the products are not serving in time.
Three years imprisonment or Tk10 lakh fine if any company sells prohibited products. A two years imprisonment or Tk10 lakh fine if any company arrange digital lottery without the authority’s permission.
What’s the global scenario?
According to Statista, the global e-commerce market grew to $4.9 trillion in 2021, from $3.3 trillion in the pre-pandemic year of 2019. It is expected to reach $7 trillion by 2025. GlobalData’s latest report says ecommerce transactions will hit $9.3 trillion by 2027.
The comprehensive study by an online marketing company, flyers-on-line.com, also found that China is the undisputed leader, with a market value of $779.858 billion in 2022, predominantly driven by the electronics sector.
In 2023, Europe is expected to generate revenues of $730.3 billion, while the United States is projected to contribute $917.6 billion.
E-commerce expansion challenges
In Bangladesh, many consumers usually prefer to buy from physical outlets rather than wait for a long period of time necessary for online shopping, as there is no assurance that goods will be delivered on schedule.
There is also a small portion of sellers who takes advantage of the system to sell products that are completely different or subpar compared to what was advertised on their sites or pages.
Sometimes, the digital pages take payment through online and never deliver the products, and that is why the people are losing their trust, and many prefer cash on delivery.
On the issue, e-Cab President Shomi Kaiser said, “The unique identification idea can reduce cheating from both the sellers’ and the buyers’ sides. Both of them can take action against anyone who cheats by submitting necessary documents to the respective authorities.
Md Tajdin Hassan, chief marketing officer of leading local e-commerce firm Daraz Bangladesh, said, “Easy shopping and payments can help drive up the market growth as extensive customer service will play a vital role in future.”
