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Ecommerce Business in Bangladesh: Prospects & Challenges

Ecommerce Business in Bangladesh: Prospects & Challenges

The ecommerce industry in Bangladesh may have been plagued by unsustainable and fraudulent business models right after its popularity. But things are expected to get better with new policies from regulatory bodies that didn’t even exist a few years ago.

Here we will have a look at the challenges of this ever-growing industry and what the future holds.

E-Commerce Business in Bangladesh: An Overview


The number of digital buyers in Bangladesh is increasing day by day. This is not really a surprising factor since there has been a notable improvement in living standards and the shopping behaviors of the locals in recent years. 

The e-commerce industry in Bangladesh had its first step in the late 90s but it couldn't expand right away. However, issues related to logistics, communications, banking, and payment methods have been solved now, making room for the e-commerce sector to grow.

It was not until the arrival of 2012 that the real changes began to happen. Increased internet connections, online payment regulations, and approval by Bangladesh Bank have facilitated the progress. Many banks didn’t support the gateway system for online payment in the initial stage but now things have changed for sure.

How the industry flourished

Improved internet connectivity and the higher number of people with access to the web has paved the way for e-commerce businesses to flourish. 

Technologies used in the e-commerce sector include electronic mail or e-mail, electronic data interchange or EDI, and electronic funds transfer or EFT.

The growth of Bangladeshi e-commerce platforms in numbers

Small, medium, or large - all sizes of entities are involved in this business. F-commerce (facebook ecommerce) and M-commerce (Mobile Commerce) are now quite popular and the number of online transactions is on the rise.

80% of the current online sales are taking place in Dhaka, Gazipur, and Chittagong with almost 30,000 products per day. Approximately 50,000 Facebook-based outlets and 2,000 e-commerce sites are delivering these products.

Obstacles faced by the e-commerce industry

The e-commerce industry of the country may have grown over the years but many obstacles still exist. High-speed net, product quality assurance, net neutrality, and parcel delivery logistics are some of the major challenges.

The lack of a good transportation system and logistics hinders the e-commerce trading expansion. 

E-commerce businesses cannot reach every part of the country due to poor infrastructure and a shortage of transportation facilities. 

Foreign companies also pose competition to the local start-ups. 

E-Commerce in Bangladesh: Where Are We Headed?

The growth is still promising


There are reasons to be immensely excited about the Bangladeshi e-commerce sector despite all the problems. The industry is expected to enter its maturity stage within the next five years.

More than five billion USD is expected to be generated by the industry that will serve 25% of the total population. 

The nation has observed the importance of e-commerce due to the Covid-19 pandemic and made the best possible use of the digital platform. It is said that this very realization has helped the sector go five years forward in Bangladesh compared to its present time.

Opportunities for growth

A number of people will depend on e-commerce within the next five years and most of the transactions are expected to be cashless. 

The working opportunity in the sector would be so huge that it will create job opportunities for lots of Bangladeshis. 

Every business sector is branching into the virtual world and e-commerce is ready to reach new heights. The sector is now taking advantage of smart devices for digital shopping.

The emergence of AI-based and hyperlocal business practices

A smarter and more automated delivery system means you don’t have to worry about anything anymore. The system will only get better when the size and value of the e-commerce industry becomes larger.

Since physical stores are becoming more digital, hyperlocal retail communities will perform the activities of neighborhood hubs and they will become the soul of most e-commerce enterprises.  

Better investment

Fundraising by logistic companies to improve last-mile deliveries and investment from the government and private sector will be the game changers for e-commerce businesses. 

These will help enterprises do better in semi-urban and rural areas where interests in the sector are increasing day by day.

Popular E-commerce Types in Bangladesh

1. Business-to-consumer (B2C)

The exponential growth of online food delivery services like FoodPanda and HungryNaki proves the popularity of B2C sites in major urban areas. 

Bad driving conditions and heavily congested traffic have also driven the demand for these services.

Facebook-based e-commerce platforms like ShoptoBd and Shoprbd are other examples of B2C initiatives. They allow you to buy products from leading shopping sites from the USA, China, India, and the UK. 


2. Business-to-business (B2B)

Bangladesh Garment Manufacturers Employee Association or BGMEA is one of the major B2B sites in the country that features B2B e-commerce solutions for international RMG and procurement.

There are other B2B sites offering trade deals, business directories, and information on suppliers like Address Bazar, the Bangladesh Business Guide, and Bizbangladesh.

3. Consumer-to-consumer (C2C)

ClickBd, Ekhanei, and Bikroy are the leading players in the C2C category. 
The sector has seen some consolidation in recent times with Ekhanei.com buying playeOLX and Telenor Group owning CellBazar.

4. Business-to-employees (B2E)

Online employee recruitment sites are largely growing in the private sector. Leading sites in this sector include bdjobs.com, chakri.com.bd, and prothom-alojobs.com.

5. Cross-border e-commerce

Irregular customs practices and weak logistics infrastructure hinder the growth of cross-border e-commerce. 
The sector is largely inhibited by an online transaction system and capital controls, which prevent most outward flows of overseas currency for consumer-oriented purposes. 
The good news is DHL has publicly announced plans to spend money on cross-border e-commerce in the future.

E-Commerce Services in Bangladesh

There are Bangladeshi companies that offer e-commerce services like domain name selling, secure hosting, web design, app development, advertising, payment gateways, in-home services, and digital marketing.

A few of these companies have clients abroad, especially in the USA. 

A study by the Oxford Internet Institute in 2017 found that Bangladesh was the second-largest supplier of virtual labor right after India.

Remitting the payment from abroad into the country isn’t a challenge. The US-based payment gateway Payoneer.com is leading the online transactions for Bangladeshi freelancers.

Mobile E-commerce in Bangladesh

Broadband vs mobile data bandwidth users

A 2017 report from the e-Commerce Association of Bangladesh stated that the country has 99% geographic coverage in data and voice connectivity. 

BTRC puts the number of total internet subscribers at 117.3 million as of May 2021. Only 9.8 million of them rely on broadband connectivity for the internet.

Mobile e-commerce for everyday transactions

Utility bill payment was introduced in 2006 in Bangladesh and remittance transfers via phone in 2010. There are 36.75 million active mobile financial services (MFS) accounts among 15 banks as of April 2021.

MFS includes utility payments, merchant payments, cash-in/cash-out, fund transfers, and foreign remittances, and the activities have grown rapidly following the Covid-19 outbreak back in 2020.

Some of the popular MFS providers are bKash, Rocket, Nagad, and UCash.

The Impact of Social Media on Bangladeshi E-commerce

Facebook is the most dominant social media platform in Bangladesh with over 30 million users. The platform is used to engage consumers and it’s a major e-commerce site.

There are more than 50,000 Facebook-based e-commerce pages in the country, many of which are small-scale businesses that solely rely on Facebook to promote and sell products. 

The popularity of YouTube is also getting higher with better streaming, Google cache servers, and faster internet connectivity.

Informal E-commerce vs E-commerce

Social media sites like Facebook and WhatsApp fall under the informal e-commerce category. This is a variant of traditional e-commerce where the platform moderates buying and selling experiences. 

These platforms connect supply and demand but they don’t engage directly in the other aspects of e-commerce. 

A typical buyer researches the product options and evaluates the product based on reviews from trusted sources. It’s easy to scan social media to find product information like the price, features, payment options, and the time for delivery.

The buyer then uses social media to place an order and pays through an MFS when an advanced payment is required.

How Important Is Informal E-commerce in Bangladesh?

Informal e-commerce creates financial opportunities especially for women. They have the option to run businesses with better flexibility no matter the business location or hours.

Not only do they earn through the platform but they also gain financial freedom and are empowered 

Another important factor is that 80% of online purchases happen informally where purchases and payments are made outside the traditional e-commerce platform. 

Current Challenges for E-commerce in Bangladesh

Challenges with e-commerce businesses

  • Lack of a strong delivery channel
  • Swift delivery services are limited to the capital and a few other cities
  • Last-mile delivery only refers to specific trips from the hub to consumer doors
  • No dependable AI-based drone delivery systems
  • Risk of damaged products due to cost savings in packaging

Challenges with e-commerce sellers

  • Many vendors don’t have their own business or stock facility
  • Higher turnaround time when buying from resellers
  • Subpar products delivery that doesn’t match the description on the platform 

Challenges with e-commerce buyers

  • Poor knowledge of digital currency and low education level
  • Lack of skills to gather knowledge and reap the benefits of social and other applications

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