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Understanding the demand for illegally imported iPhones in Bangladesh

  • Published at 05:47 pm May 20th, 2018
  • Last updated at 01:18 pm May 21st, 2018
The Apple iPhone X and iPhone 7 are two of the most popular handsets in recent history BIGSTOCK

90% of all iPhones sold in Bangladesh are imported illegally, depriving the government of Tk200cr in revenue

Apple’s iPhones are a symbol of prestige, the pinnacle of technology – i.e. a must-have for many people. Given the high prices, however, it is often beyond the reach of the average consumer if not for the convenient unauthorized sellers.

The ruckus outside Bashundhara City on Saturday was a mere glimpse at how large the iPhone reseller network is. When the customs authorities confiscated 121 iPhones among 275 phones, the traders blockaded Panthapath and prevented them from leaving. It took RAB intervention to bring the escalating situation under control. 

Customs said the phones were seized because they were illegally imported, which the traders responded to saying all iPhones are illegally imported to Bangladesh as there are no authorized distributors.

The confiscated phones amounted to around Tk2.20 crore.

Traders in Bashundhara City surround a CIID vehicle after they confiscated hundreds of phones on May 19, 2018 Rajib Dhar/Dhaka Tribune

In Bangladesh, at least 90% of all iPhones are illegally imported. This is because there is 32% duty on importing handsets in Bangladesh, which significantly raises the price.

Also Read- Bashundhara City traders and customs face-off over seized phones

Hence, there are syndicates and networks which use individuals to bring iPhones via grey channels like baggage and other methods.

These unauthorized traders cost the government around Tk200 crore in revenues.

Lower duties could see higher revenues

Compustar PVT Limited (CPL) is the only authorized iPhone dealer in Bangladesh. They import their handset in Bangladesh through Generation Next Communications Pte Ltd (GENXT), a leading mobile and IT distributor in Southeast Asia.

“We have seen robust growth in iPhone sales in Bangladesh over the past few years. We sell around 900 phones per week between April and May. But from October to December, the sales increase up to 1,500 units per week,” said Mohammad Riajul Islam, chief operating officer of Generation Next Communications.

However, Riajul noted that the number of phones activated in Bangladesh eclipses the number of phones sold by Compustar.

He said: “According to the data, about 1,200 handsets are activated per week in Bangladesh, but only 11%-12% were sold by us. Most of these are imported by unauthorized dealers.”

Riajul noted the high 32% duty is a great deterrent for most consumers who prefer to purchase from unauthorized sellers at a lower rate.

“The government is losing at least Tk200 crore in revenue per year because of the illegal import of iPhones,” he stated after a quick calculation of sales data and estimates.

The illegal imports are mostly from Singapore, Hong Kong, and the UAE. They are mostly refurbished, which is why the price range is far lower than the authorized retail prices.

The duty on mobile phone imports in Myanmar is 12%. In Nepal, it is 15% but with a 6% tax refund. In both countries, authorized iPhone sales are significantly higher than Bangladesh, according to Riajul.

He said if the Bangladesh government were to lower the duties, it would allow for more authorized imports and sales to generate greater revenue for the government.

“Apple considers Bangladesh a serious market. Several senior executives have visited Bangladesh a number of times over the past four or five months to check the prospects. They see the potential we have.”

Where are authorized iPhones sold?

Original iPhones are available at Grameenphone Centre, Robi Sheba, Banglalink Mono Brand Store, Gadget & Gear, Mobile World Store and authorized resellers like iCenter, Executive Machines, and Computer Source. Among the e-commerce sites, only pickaboo.com and daraaz.com is offering authorized iPhones.

A cautionary tale

CIID Director General Dr Shahidul Islam said they would show zero tolerance against illegal imports or smuggling activities for commercial purposes.

He said: “No matter how powerful they are, they will be brought to justice. The government is losing a lot of revenue from smuggled phones, and we will continue to carry out drives like the one in Bashundhara City.” 

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