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Lack of e-commerce infrastructure drags Bangladesh down in global rankings

  • Published at 01:33 am February 17th, 2021
Photo: Bigstock

Says an UNCTAD report

Despite having a sharp rise in sales amid the pandemic, Bangladesh dropped 12 notches in the United Nations Conference on Trade and Development (UNCTAD)'s Business-to-Consumer (B2C) e-Commerce Index 2020 due to infrastructure deficiency.

Bangladesh ranked 115th, down from 103rd in 2019, as per the UNCTAD's report that was released on Tuesday. 

In the 2018 index, Bangladesh had fared much better: it ranked 88th.

The index scores 152 nations on their readiness for online shopping, worth an estimated $4.4 trillion globally in 2018, up 7 per cent from last year.

Countries are scored on access to secure internet servers, reliability of postal services and infrastructure, and the portion of their population that uses the internet and has an account with a financial institution or a provider of mobile money services.

Among the South Asian nations, Bangladesh is ahead of only Pakistan, 116th and Afghanistan, 143rd.

In the region, India performed better and ranked 71th, up four notches from 75th in the previous index. Sri Lanka ranked 87th, followed by Nepal at 113 and Bhutan 114th.

The report was done based on the data of 2019, Muhammad Abdul Wahed Tomal, general secretary of e-Commerce Association of Bangladesh (e-CAB), told Dhaka Tribune.

“The ranking is true. We have growth in e-commerce sales but the rural infrastructure did not develop yet to tap the vast opportunity there.”

In Bangladesh, the logistic services and supply chain are yet to connect rural areas, but in developed countries, the post office plays an important role in the distribution channel. 

“But in our country, it is not properly functioning,” he said, adding that internet penetration is another big impediment to the sector’s growth.

Meanwhile, there are several payment gateways but those are not interoperable, while the card transaction limit is another challenge, said Tomal.

“That is why we are lagging and our competitors are doing better. To retain the growth and to improve on the rankings, the government has to concentrate on developing proper infrastructure and lower prices of bandwidth.” 

Most of Bangladesh's e-commerce business remains in the informal format. 

“That is why there is a lack of proper and authentic information about the sector. If we can formalise and consider the present status of the sector, the ranking will improve,” Tomal added.

For the first time, Switzerland leads the UNCTAD B2C E-commerce Index, just ahead of the Netherlands.

In 2019, 97 per cent of the Swiss population used the internet. 

The only non-European economies among the top 10 are Singapore, which ranked fourth, and Hong Kong (China) in the 10th position.

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