With the numerous barriers to urban life in Dhaka city, citizens have increasingly resorted to online shopping, with an increasing supply of virtual businesses to match.
Inspired by convenience, competitive pricing, range of products, dedicated service, improving payment security and flexibility and demand from buyers and sellers, e-commerce has witnessed a mushrooming of the online shopping websites, particularly in the B2C and C2C category.
A study on e-commerce in Bangladesh published by the Centre for Enterprise and Society at the University of Liberal Arts, Bangladesh has found that the prospect for the growth e-commerce in the country bodes well, considering the early-sage of the sector.
There are several indicators that are worth highlighting. First and foremost, 48 million Internet subscribers are quite significant for Bangladesh. This attests to the popularity of the Internet among average citizens.
However, when one compares this to the 127 million mobile phone subscribers, the potential for mobile Internet growth is further underscored. Generally, laptops and desktops do not enjoy very high levels of penetration owing to their high costs, and this barrier is a boon for mobile Internet adoption, and subsequently e-commerce.
Moreover, a 25% penetration of Facebook, is also quite high, and implies the potential of a segment of e-commerce known as f-commerce. Furthermore, the cost of peak-hour Internet at Tk1.5-2.0 is expected to go down significantly in the coming years, as telecommunications companies have recouped the costs incurred in availing 3G licensing.
There are, of course, areas that merit a closer look wherein interventions by the public and private sectors ought to be prioritized, so as to encourage further e-commerce sector expansion. For instance, as is evident from the table, Bangladesh is still highly dependent on its 2G network. This is expected as mobile usage is still growing in Bangladesh.
However, prioritizing the transition from 2G to 3G will enable accelerated growth for the e-commerce sector. To this end, the decision of the government to introduce a second submarine cable will go a long way in creating the required infrastructural context within which to shift to a less expensive and more efficient platform such as the Broadband.
Moreover, a nationwide broadband network should be part of the government’s near-term urban development plan.
Overall, there have been significant strides in infrastructure development which have facilitated the entry of e-commerce businesses.
There are, however, deterrents, such as weak enforcement of contracts, lax consumer protection rights, a lack of privacy protection and absence of intellectual property regulations, to name a few.
This report was first published by the Centre for Enterprise and Society at the University of Liberal Arts, Bangladesh.
