Despite significant growth in the e-commerce sector of Bangladesh, the industry is still in its infancy. Only 4% of the country’s consumers shop online, while the rest prefer shopping malls, markets, or physical shops. As a result, e-commerce businesses have not yet become popular. However, due to the Corona epidemic, the country’s e-commerce sector enjoyed a great deal of traction.
E-commerce Evolution
Munshiji is believed to be the first e-commerce in Bangladesh that Munshiji Technology Limited launched in 1999 to export handicrafts, silk, jute products, tea, leather, and leather goods. In April 2005, another e-commerce platform ClickBD.com was launched. Initially, users could use this website to sell any product. Besides having a marketplace, the platform later added online stores. Finally, in 2006, the country’s first free classified ad website CellBazaar was launched. Later, in 2014 the platform was renamed ekhanei.com.
Although several e-commerce operating in the country, according to the e-Commerce Association of Bangladesh or e-cab, the country lacked the necessary regulations and infrastructure for online transactions until 2008. In addition, internet services were expensive at the time, so the internet penetration rate was relatively low. Hence most of the country’s population was unfamiliar with these e-commerce sites. In 2009, Bangladesh Bank introduced regulations for online transactions. At the same time, Wimax Internet was introduced in the country. In addition, payment gateway infrastructure was developed for the first time in the country in 2010 with the establishment of ‘SSLCOMMERZ.’ Initially, the platform was launched in collaboration with Dutch Bangla Bank Limited and Brac Bank, but now it is the largest payment gateway in Bangladesh.
Bangladesh’s first full-fledged e-commerce company, akhoni.com, was founded in 2011 and later in 2016, was re-branded as bagdoom.com. Also, another online shopping platform ajkerdeal.com was launched in 2011. Meanwhile, in 2012 with the introduction of 3G internet technology in Bangladesh, internet penetration increased, and e-commerce operating in the country also started getting much-needed traction. In the same year, an online bookselling platform rokomari.com was launched following the strategy of global e-commerce giant Amazon.com. Presently, Rokomari, one of the most popular bookselling e-commerce platforms in the country, is expanding its business in other product categories, including electronics and stationery. Meanwhile, Bikroy.com, which was established in October 2012, has become the country’s largest C2C and B2C marketplace in consumer product sales.
In 2013, E-Commerce Week was celebrated with Bangladesh Bank and Bangladesh Association of Software and Information Services or BASIS. In the same year, a premium ICT magazine, “Computer Jagat,” organized the country’s first e-commerce fair under the supervision of the Dhaka DC Office. At the exhibition, 31 public and private e-commerce platforms displayed their products and services. In the same year, Bangladesh Bank allowed the use of International Credit Cards for online shopping. Moreover, chaldal.com, launched in the same year, is currently the most popular online grocery and food item provider in Bangladesh.
In the same year, “Daraz” began its operations and has become the leading and most popular e-commerce platform in Bangladesh. Now, the platform has enlisted global vendors besides local vendors on their platform, and they are the first to deliver foreign products directly to domestic buyers in the country. In addition, the platform is currently working to deliver the products of the multinational e-commerce ‘Ali Express through the platform. Furthermore, in January 2014, the e-commerce association, or E-Cab was established to acknowledge e-commerce-related concerns and ensure the growth of the sector in the country. In addition, E-cab has declared that year as ‘The E-commerce year 2015’.
On the other hand, with the launch of eCourier in 2014 and Pathao Courier in 2015, many more online-based parcel delivery services started coming to the market, which has played a significant role in the growth of the e-commerce sector in the country.
Also, in 2015, khaasfood started its operations with a promise to deliver fresh food. Moreover, Sheba.xyz, the largest online service-based marketplace in Bangladesh, was launched in July 2016. Besides Pran RFL’s e-commerce service othoba.com, another Bangladeshi e-commerce platform pickaboo.com began its journey in the same year. Meanwhile, in April 2017, two popular super shops of the country’ Meena Bazaar and Shopno’ launched their e-commerce website. In addition, many other groceries, home appliances, retailers, and big brands have also started launching their e-commerce websites.
In 2018, the Government of Bangladesh published a digital commerce policy as a guideline for e-commerce websites and to ensure consumer rights. In addition, it was established that copyright, hacking, and product pricing issues were to be enforced directly by the Ministry of Commerce.
In December 2018, the e-commerce platform ‘Evaly’ started its operations in Bangladesh. The platform soon became a major e-commerce platform by offering various lucrative offers and huge discounts. However, Evaly was later charged with fraud and corruption, and their operations are currently suspended. Similar allegations have been raised against several other e-commerce platforms, including Alesha Mart, Eorange, Qcoom, Dalal Plus, Dhamaka Shopping, and Sirajgonj Shop, many of which have shut down their operations.
In June 2021, to ensure customer rights and to stop fraudulent activity, Bangladesh Bank introduced an ‘escrow service’ for e-commerce. According to the new guidelines, banks or financial institutes will withhold online consumers’ advance payments until the seller has appropriately delivered the product.
In addition, in March 2020, a B2B and B2C e-commerce company ‘malamal.xyz’ was launched, serving as a dedicated e-commerce platform for selling industrial products. Meanwhile, in December 2021, Walton, one of the country’s most popular electronics and home appliance manufacturers, launched an e-commerce website called Walcart.
Current Scenario
Based on inventory, there are two types of business models in the e-commerce sector of Bangladesh. One is the ‘retail or inventory lead’ model, where e-commerce platforms buy products wholesale and caters to retail customers. The other is the ‘Marketplace or Zero Inventory’ model, where e-commerce businesses act as trustees between vendors and consumers. In addition, there is another business model called the ‘Mercantile Model,’ where e-commerce platforms provide delivery services on a commission basis and do not maintain any inventory. Popular e-commerce ‘Ajkerdeal’ follows this model.
According to a 2021 report by e-Cab, since 2019, e-commerce platforms in Bangladesh started extensive advertising, and by 2020 the e-commerce sector began to transform into a full-fledged business. There are more than 2500 e-commerce platforms in Bangladesh, of which 1% are large businesses, 4% are medium businesses, and 95% are small businesses. Of these, 1,600 eCommerce entrepreneurs are currently e-Cab members, of which 27 percent are women, and 73 percent are male entrepreneurs.
Besides e-commerce, Facebook-based business or F-commerce has also boomed in Bangladesh. F-commerce has been growing steadily since Facebook introduced its ‘Live’ feature. There are more than 5 lakh Facebook-based business pages in the country, of which 2 lakh pages are now actively operating business. Although e-commerce platforms grow at an average rate of 25 percent per year in Bangladesh, the dropout rate of these new entrants is about 35 percent. According to a report by e-Cab, the average basket value of the country’s e-commerce sector is currently BDT 2,200. In 2020, the average daily transaction volume of e-commerce was BDT 44 crore, which stood at Tk 16,000 crore by the end of the year.
According to another financial express, the market size of e-commerce in Bangladesh was USD 2 billion in November 2020. Still, as the sector is growing at a rate of 50 percent per year, the country’s e-commerce market is expected to reach 3 billion by 2023.
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