Thursday, April 25, 2024
Even though online commerce has been a popular means of selling and buying goods and services, its growth has slowed down in the urban areas due to some bottlenecks, including poor infrastructure related to e-commerce business.
Industry insiders said lower-than-needed internet penetration, connectivity constraints, and poor logistic infrastructure are impeding the growth of digital commerce in the remote areas.
They also claimed that post offices are not efficient enough to comply with online commerce as automation and IT-skilled resources are not available and commerce with perishable goods is not possible due to a lack of cold storage facilities and convenient transport system.
Infrastructural bottlenecks
Fahim Mashroor, CEO of country’s leading e-commerce company ajkerdeal.com,said the e-commerce sector is facing two infrastructural problems--one is connectivity related infrastructure and another is logistics infrastructure.
The e-commerce sector is seeing a drastic fall in sales and even almost 60-70 per cent is still Dhaka-centric. Broadband internet is not spreading to rural Bangladesh yet. Mobile data quality is also poor, he added.
Without broadband internet, he said, e-commerce cannot flourish in any area in the world. Sellers of e-commerce in urban areas can use broadband internet, but internet facility may be unavailable for buyers in rural areas.
“Post offices could have been a good logistics solution countrywide. We have also started delivering products, using post offices’ infrastructure, but it creates multifarious problems at service level including a delay in delivery of products as those have not yet been automated,” Fahim said.
If IT technology is not deployed there, delivery cannot be tracked. Although costing of a post office is not that much, post offices in many places have no internet connections, he opined.
While making suggestion for utilising the post offices by e-commerce companies, the tech giant said there should be public-private partnership, so that private companies can use post office infrastructure as per their needs to provide best possible services.
Ambareen Reza, co-founder and Managing Director (MD) of foodpanda, said good restaurants have not yet been set up at upazila level due to a lack of logistics and supply chain there.
“It was heard that the government would set up a chilling centre or cold storage through postal services, but no development was made later as food is perishable products where storage is a must.”
If the government provides subsidies, the cost of logistics will come down and quick service will be available countrywide.
Abdul Wahed Tomal, General Secretary at E-commerce Association of Bangladesh (e-CAB), admitted that broadband internet and its speed are low but these are very crucial for rural e-commerce.
Post office has huge infrastructure which has to be utilised. Employees will have to be trained and infrastructure will have to be automated, making it e-commerce friendly, otherwise e-commerce will not flourish in rural areas, he observed.
Biplob Ghosh Rahul, CEO of e-courier said, “Our logistics infrastructure is still not ready. So, an unhealthy competition among small and unpredictable entities is going on with overcommitment which lowers the quality of services.”
Post offices have infrastructure lying unused as those run by enforcing their own compliance, he said, adding that it is not working as expected as it needs skilled people who can operate smart logistics delivery.
“E-commerce courier and smart courier are not the same. We need huge involvement in IT. Post office works manually, which is not applicable for smart courier services despite huge infrastructure lying unused,” he argued.
Google map will not extend best support for logistics delivery. There are few places it can read correctly. “We with the help of our company are making a map named .map, where we will come up with location solutions.”
Official version
Posts and Telecommunications Minister Mustafa Jabbar said post office has been the most reliable and suitable institution. “The amount of parcels it carries cannot be carried by any other courier companies.”
“We are establishing digital Palli with e-cab, the support they need for e-commerce companies, even providing spaces in the post offices from parcel sort, delivery etc,” he said.
“I don’t agree that post offices are not as smart as the e-commerce company requires. We are not less efficient than the staff of any other e-commerce companies. We cannot hope that an old organisation can be transformed into digital overnight. Everything would be digitally sound. We are providing training to all involved.”
They are carrying out a survey and will take steps based on the survey report. “There is no reason for e-commerce companies not to be connected with post office infrastructures. We are doing our best in this regard.”
The prime minister has directed them to install chilling centres at post offices, chilling cars, and chilling railway coaches. “We are making all arrangements. We are waiting for our survey report. We will take steps after scrutinizing the report.”
The minister also said, “We have observed that e-commerce companies are so small that they can comfortably do delivery with their courier companies or other means they like. They do not think more about reaching remote areas.”
“There is no alternative for e-commerce companies to survive with post offices,” he added.
Few innovative solutions
A2i has initiated ekShop, a national e-commerce facilitator and infrastructure backbone, with an aim to incorporate all the major and trusted e-commerce, payments and logistic players into one platform through API.
“ekShop has partnered with Bangladesh post offices to exclusively access 14 chilling chambers or cold storages across Bangladesh to enable testing of perishable logistics from all over Bangladesh,” said Rezwanul Haque Jami, head of e-commerce, a2i of the Bangladesh government.
ekShop is also piloting a IoT powered smart locker system named DigiBox in 11 locations in Dhaka, with 2,500 drop-offs done, and trying to attract more investments to deploy 100 boxes in all major cities.
“We are installing booths at villages, where people can make their purchase from those points, which is another infrastructural movement that will mininise costing for home delivery.”
Biplob Ghosh Rahul said e-courier has over 200 booths in Dhaka named e-courier express, where a shop owner like flexiload shop will work as e-courier’s drop and pick model, where we are introducing multiple businesses for them.
Suggestions from stakeholders
Ilmul Haque Sajib, Co-founder and COO of ShebaXYZ, the biggest service provider e-commerce company, said, “People in remote areas will have to be accustomed to using internet first, then they will use e-commerce for solutions. They do not try due to costly internet and low speed.”
The government can subsidise telecos for internet connectivity for the country's greater needs and prospects.
If internet spreads, not only e-commerce but all possibilities can be achieved including IT-induced solutions and employment which ultimately give back bigger returns, he added.
Telecom companies also can introduce different initiatives aiming to spread internet use in villages; they can do it as their CSR program. All those, finally will back a huge return than the apparent losses, he said.
Fahim Mashroor said youths should be given some logistics support so that they can transport goods and other services and build infrastructure.
For example, riders of ride-sharing companies cannot capacitate their vehicles due to proper parking space; it can also trigger accidents, bike thefts, discomforts for both the riders and passengers.
There should be parking space for riders or common space to stand or keep goods from e-commerce delivery men in the city.
They can be given loans to buy a bike or bicycle, they can repay the loans by working a few months later, and employment will be generated.
Open Network for Digital Commerce (ONDC) can be built here as in India, So that micro-merchants can be connected with a single network. That should be made by the government’s ministry of commerce.
