In an exclusive interview with the Dhaka Tribune's Ibrahim Hossain Ovi, E-Commerce Association of Bangladesh (e-CAB) President Razib Ahmed talks about how the government should tap into the huge potential of the e-commerce sector to catalyse the country's economic growth, rather than merely considering it a tool for selling products
What should the government's attitude be toward the emerging e-commerce sector?
E-commerce sector brings enormous opportunities to the business sector as it makes 24/7 business possible. It makes the economic activities more dynamic.
It is a fast growing sector; the annual turnover from this sector was Tk1,000 crore in 2016. Around 50,000 people are currently employed in e-commerce services in Bangladesh.
This sector has huge potential that the government must tap into. E-commerce industry will boost the country's economic growth, but for that it must be recognised as a sector that can contribute to the national economy.
Besides the government, the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and other such organisations have to consider this sector profitable and include it in their business policies.
Who are showing interest in this sector?
Young and educated men and women who aspire to have a business-oriented career are quite interested in e-commerce. Since the young generation is tech-savvy, they are more enthusiastic about this sector. This is a postive sign that they are more interested in business and want to create employment opportunities. My advice to the newcomers would be to learn first and then be persistent and work hard in running their businesses.
How much training on e-commerce are young entrepreneurs getting in the country?
The e-CAB is providing training to both entrepreneurs and fresh graduates on how e-commerce works and what the risks and gains of this business are.
But the government should provide support so more people can be trained in this sector. It should provide all-out support especially to small and medium enterprises (SMEs), because the small businesses build the foundation for large-scale industries.
I urge the government to include e-commerce in its vision of Digital Bangladesh as that would bring the young generation as well as the consumers to a common platform.
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E-commerce businesses are still mostly based in the cities. How can we take it to the rural areas as the majority of the population live there?
The big problem in reaching the rural areas is communication: courier services do not extend to most of the upazilas.
To resolve this issue, the e-CAB has signed a deal with the Ministry of Post, Telecommunication and Information Technology to use the post office network for delivering products.
The first phase of this system will be launched in Dhaka by March this year. We aim to bring all the districts and upazilas under the post office network by 2018.
Is the country's internet service sufficient to support such a system in the rural areas?
Not really. E-commerce businesses require high-speed internet, which is absent in the rural areas. The cost is high too.
Mobile phone operators promise 3G connection around the country, but in the rural areas it is hardly accessible.
The government should take the internet as a fundamental element of business, particularly e-commerce business. It must ensure low-cost, high-speed internet for rural people to turn its vision of Digital Bangladesh into reality.
What about electronic transaction methods?
The idea of electronic transaction has yet to gain traction here. Customers are still not comfortable using their credit and debit cards for online payment, afraid of getting hacked.
The lack of electronic payment services – such as Paypal – is a big problem in our e-commerce sector; about 90% of the businesses accept payment as cash on delivery.
To tackle this issue, banks and other financial institutions should ensure that they put appropriate security measures in place.
Which products are sold the most via e-commerce business?
Fashion and electronic products are currently dominating the market, but it is gradually expanding and other products are being traded online too.
How do we reach the global market of e-commerce?
There is a huge demand for Bangladeshi products in the global market, especially brands like Aarong. But we cannot access the market because of the problems regarding online payment services in Bangladesh.
Online sales are not treated as export, but the earnings from that are considered remittance, which is another problem.
To tap into the global market, the government has to reform its regulations regarding online transactions and upgrade the entire system. If the government ensures policy support, the e-commerce sector will open a new avenue for export.
What should the government do in this regard?
For the development of e-commerce sector, the government has to incorporate e-commerce in school curriculum first so children grow up learning about it. In the meantime, Bangladesh Bank should formulate policies to ease the loan process for e-commerce entrepreneurs.
The government should do something about providing trade licence for e-commerce businesses. Currently, trade licence is not issued specifically for e-commerce businesses, which makes running such businesses difficult.