Bangladesh has over 140 million internet users, with nearly 130 million using mobile internet. The Internet has become the backbone of various business sectors in the country, including RMG (Ready-Made Garments), textiles, pharmaceuticals, plastics, electronics, FMCG (Fast-Moving Consumer Goods), and more, as well as the banking and financial infrastructure. In today’s video, we’ll explore how essential the internet has become to Bangladesh’s economy.
Overview
Before 2009, Bangladesh’s digital infrastructure was almost non-existent. At that time, most people did not have access to the Internet, and there was a significant gap in digitalization between rural and urban areas. Most government and private offices operated on paper-based systems. However, in 2009, the Bangladesh government launched the “Digital Bangladesh” initiative, which propelled the country toward digitalization. As a result, new sectors emerged based on the Internet, and many existing sectors saw increased internet adoption.
Under the Digital Bangladesh initiative, approximately 4,500 Union Digital Centers have been established, offering around 60 services at the village level. Due to digitalization, people have become accustomed to receiving various government services online, such as birth and death registration, national ID cards, e-KYC, e-Mutation, city corporation holding tax payments, online tax returns, and more. To further increase internet adoption in the country, 3G mobile internet service was introduced in 2012. Just five years later, in 2018, Bangladesh launched 4G, and according to BTRC, more than 100 million people are now under the 4G network. Among the over 140 million internet users in the country, nearly 130 million are mobile internet users. Alongside 3G and 4G technology, the use of broadband internet has also been increasing, especially due to uniform rates across the country and the broadband internet roadmap at district and sub-district levels, which has increased access to high-speed broadband internet nationwide. Following the success of the Digital Bangladesh roadmap, the government has launched the Vision 2041 initiative to transform the country into a Smart Bangladesh by 2024.
Importance of the Internet
As the internet has expanded in Bangladesh, all types of business activities, transactions, manufacturing industries, and import-export processes have become dependent on it. The country’s largest contributing sector is the RMG (Ready-Made Garments) sector, which generates over 85% of Bangladesh’s total export earnings. In the RMG sector, the Internet is essential for communication with international clients, receiving orders, managing the supply chain, importing raw materials, production, product delivery, and receiving payments.
In fact, the Internet is a crucial component for nearly all industries in Bangladesh, including import-export and manufacturing-based industries such as RMG, textiles, pharmaceuticals, plastics, bicycles, electronics, paper, and FMCG. The internet has also made import-export procedures more efficient compared to the past. Tasks such as documentation, customs clearance, and tracking have become faster and smoother thanks to the internet, where manual processes used to take more time. Today, all documentary processes for importing goods from abroad or exporting goods abroad are handled digitally, making the Internet indispensable. According to TBS, on a normal day, the Chittagong Customs handles around 3,000 to 3,500 containers, sometimes exceeding 4,000. If the internet service is disrupted, this process could slow down or even come to a halt, negatively impacting the overall economy.
The accessibility of the internet in Bangladesh has also brought a significant revolution in the banking and financial sectors. In the past, most business transactions were conducted in cash. It used to take several days for large amounts to be processed through banks, and the entire process was manual. However, thanks to the internet, both personal and business transactions, as well as various government payments such as electricity, water, and gas bills, holding taxes, and other fees, can now be made online. Since 2012, the number of internet banking customers in the country has been increasing every year. As the internet and smartphone usage has grown, banks and mobile financial service providers have introduced app-based services. Banks now offer online banking windows for businesses, allowing companies to execute transactions quickly. According to Bangladesh Bank, nearly BDT 6,893 crore worth of transactions were made through internet banking in May 2019. By May 2024, over BDT 1 lakh crore worth of transactions had been made through internet banking. This means that in the last five years, transactions through internet banking have increased by nearly 15 times.
Additionally, the number of MFS (Mobile Financial Services) accounts in the country has reached nearly 230 million, with transactions amounting to BDT 1.41 lakh crore. This means that over BDT 2.5 lakh crore worth of transactions are made through digital channels every month. This shows how accustomed the general public and businesses in the country have become to using the internet for banking and transactions. Furthermore, the stock market in the country, where shares worth billions of Taka are traded daily, is entirely dependent on the internet. Thus, the internet is of immense importance to Bangladesh’s banking and stock market sectors.
Moreover, advanced machinery, various digital tools, and IoT (Internet of Things) devices have increasingly been used in all types of manufacturing activities, including garments. Companies are using such technologies to enhance production efficiency through automation. The operation of these devices and machinery often requires the internet. Additionally, the use of various software and email for internal company communication has become more common. Software is also used for employee management, accounting, and other tasks, which also require the internet for daily operations. In the case of sales, businesses are dependent on the internet to take orders online, track orders, and perform other aspects of their operations. Even in marketing, internet dependence has increased. At one time, advertising was done on billboards, newspapers, magazines, radio, and television, but nowadays, most people spend more time on social media and streaming platforms. As consumers are more active on smart devices and social media, businesses are also conducting their marketing and promotional activities through digital channels. Without the internet, companies would not be able to market their products and services to customers.
Over 4,500 IT, software, and ITES (Information Technology Enabled Services) companies are operating in the country, employing over 300,000 people, all relying on internet and digital infrastructure. The domestic market size of this sector is USD 1.4 billion, and according to government sources, local IT, software, and ITES companies are generating USD 2 billion in export earnings. It is estimated that this sector’s export income will reach USD 5 billion by 2025. Additionally, according to The Daily Star, there are over 1 million active freelancers in Bangladesh, of whom around 650,000 are providing services in the global IT sector. Bangladeshi freelancers are successfully working on platforms like Upwork, Fiverr, and Freelancer in sectors such as IT, graphic design, digital marketing, 3D design, and animation. According to Payoneer’s 2023 ranking, Bangladesh ranked 8th among the Top 10 Freelancing Countries. The freelancing sector has now become a powerhouse in Bangladesh. Through the active participation of millions of freelancers nationwide, approximately USD 1 billion is added to the country’s foreign reserves each year. Continuous internet service and internet quality improvement are crucial to maintaining this position, attracting international clients, and further growth in this sector.
With the growing accessibility of e-commerce in Bangladesh, the e-commerce sector has expanded, and online shopping has increased. There are nearly 2,500 e-commerce platforms in the country, such as Daraz, Othoba, Pickaboo, Bikroy, and Chaldal, collectively making the e-commerce sector’s market size nearly BDT 60,000 crore. The entire sector is dependent on the internet. Alongside e-commerce, many people are also shopping from Facebook-based shops or f-commerce platforms, and many new entrepreneurs are emerging. People can now easily shop online, and new entrepreneurs can start businesses from home. There are around 300,000 Facebook-based businesses in the country, for which the internet is essential. Nearly 70% of the owners of these businesses are women, through which many women have become self-reliant. The market size of these Facebook-based businesses is approximately BDT 1,000 crore.
Another sector connected to e-commerce and f-commerce is the courier service sector. This sector has grown around delivering orders for e-commerce and f-commerce platforms, with major courier companies like e-Courier, Delivery Tiger, Paperfly, and Steadfast, alongside many smaller courier companies. A significant portion of their business relies on customers placing orders online. Additionally, ride-sharing services like Pathao and Uber, food delivery platforms like Foodpanda, Pathao Food, and Foodie, service marketplaces like Sheba, and ed-tech platforms like 10 Minute School and Shikho all operate through the internet. According to an Asian Development Bank report from May 2023, the size of Bangladesh’s digital economy is 2.6% of Bangladesh’s GDP, or approximately USD 12 billion.
In the healthcare sector, the role of the internet is also vital for telemedicine, patient management systems, and access to various online medical resources. Additionally, keeping pace with global standards, the aviation industry in Bangladesh, from booking flight tickets to payment and flight boarding, is now entirely online. Over 600,000 passengers travel through Bangladesh’s airports every month, with the entire process relying on the internet. Furthermore, sectors like OTT (Over-the-Top) services, content creation, and more have developed based on internet infrastructure in the country. Any disruption in internet service could slow down or even collapse these critical sectors, causing damage to the broader economy. Despite significant progress in the digital sector, improving internet infrastructure, especially expanding high-speed internet coverage across the country and addressing bandwidth limitation issues, is crucial.
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