Presently, the retail market in Bangladesh exceeds BDT 2 lac crore. However, the online grocery and e-commerce sector remains smaller in comparison. Local customers still prefer purchasing their daily groceries from nearby shops or market wholesalers. Despite being a niche market, there are several online grocery e-commerce and delivery platforms available, mainly focusing on offering fresh and safe food items.
Organizations like Madol and Shashya Prabartana have been providing safe food to customers through physical stores for the past decade. In the last five years, several other e-commerce platforms have also entered this market. These organizations offer various services, including home delivery and self-manufacturing, and storage of products based on customer requirements. In this article, we will discuss the growing online grocery market in Bangladesh.
Overview
Farmers’ markets are highly popular not only in Europe and the USA but also in many developed countries worldwide. Similar to haats in Bangladesh, these countries have farmers’ markets where marginal farmers sell their own fresh agricultural produce, eggs, and meat from domesticated animals like poultry. These markets also offer various food items such as honey, jam, jelly, pickles, butter, cheese, and more.
Customers who are health-conscious and seek fresh and healthy food often prefer to buy from these markets. However, since these markets are only available in specific locations and for limited periods, many people find it challenging to visit them regularly. To address this issue, several D2C grocery delivery services like GrazeCart, Farmdrop, Farmigo, and GrownBy have emerged in the USA. These services deliver fresh produce from farmers directly to customers’ doorsteps.
In India, our neighboring country, there are also B2B and D2C platforms such as Bigbasket, Grofers, Dunzo, Spencer’s, and Nature’s Basket, which provide fresh products to customers through direct delivery. D2C stands for Direct To Consumer, which means delivering fresh products directly from the producers to the customers without involving middlemen.
In Bangladesh, the traditional weekly bazaars, known as haats, have experienced a decline over time. Presently, only a few weekly haats remain in Dhaka, such as the Meradia haat in Banshri and the Nila market in Purbachal held every Wednesday. However, to meet the demand for fresh vegetables, milk, eggs, and ghee, the government, along with the United Nations, and various local and foreign private organizations have been organizing farmer’s markets at 16 locations in Gazipur and Narayanganj, including Iskaton in Dhaka, every Friday from 7 am.
Despite the decrease in traditional bazaars, there is still a consistent demand for fresh vegetables, milk, eggs, and ghee among the people of the country. To meet this demand, some local shops in Dhaka have been sourcing fresh products directly from farmers and selling them to customers for a long time. Notably, Madol and Shashya Prabartana are prominent among these shops. Additionally, the rise of grocery e-commerce platforms like Khassfood and Neofarmer has been observed.
The shopping habits of Bangladeshi consumers have evolved significantly in recent years, with a notable increase in online shopping, especially after the impact of the pandemic. Alongside this trend, people have become more concerned about healthy food options. Consequently, there has been a rise in the number of e-commerce platforms adopting the direct-to-consumer (D2C) model, delivering farmers’ fresh produce to customers. These organizations play a vital role in creating awareness about safe food practices in Bangladesh.
Bangladesh Perspective
According to a report from Dhaka Tribune in 2022, the current size of Bangladesh’s e-commerce sector is approximately BDT 22,000 crore. It is expected to grow further and reach BDT 30,000 crore by the year 2023. This significant market includes well-known e-commerce platforms like Daraz, as well as grocers such as Chaldal, Pandamart, and book delivery-related e-commerce like Rokomari. Despite the substantial overall market, the grocery segment is comparatively smaller in size.
The e-commerce sector for grocery delivery in our country mainly provides products from FMCG companies to customers. However, there are concerns about the quality and safety of these products. In response to increasing interest in healthy food consumption and skepticism about processed food safety, D2C grocery e-commerce is focusing more on offering safe food-based products.
Organic farming faces challenges in Bangladesh due to the nature of our croplands. To be certified as organic, no chemicals or pesticides can be used on the land for at least three years before cultivation, and no pesticides or chemical fertilizers can be used afterward. This makes it difficult for farmers in Bangladesh to practice organic farming, as it would result in higher costs for the products that customers may not be able to afford.
As a result, grocery e-commerce platforms prioritize safe food products that are free from harmful substances like bacteria, viruses, parasites, chemicals, and toxins. Although these foods are not entirely organic, the establishments ensure that they do not use preservatives or harmful chemicals during storage.
D2C companies often grow their own crops or source fresh produce directly from farmers. They keep processing to a minimum and deliver the products in their own packaging to the customers’ doorstep. One such platform in Bangladesh is Green Grocery, which offers safe food produced by itself to customers.
Green Grocery
The D2C e-commerce platform, Green Grocery, was established in 2020 with the motto “Quality That You Can Trust,” responding to the growing health consciousness among Bangladeshi customers and their increasing interest in safe food choices. Since its inception, Green Grocery has quickly gained popularity among customers for providing safe and nutritious food options in Bangladesh.
At present, Green Grocery’s product range includes a variety of items, such as homemade spices, dry fruits, organic honey, jaggery, edible oil, mustard oil, nuts, grains, pickles, and more. To ensure the freshness and safety of its food products, Green Grocery sources its raw materials in multiple ways.
For certain crops, the company practices contract farming with farmers, while for others, they directly procure produce from marginal farmers. For instance, Tulsi mala Polao rice is produced through contract farming, while spices like turmeric and chili are sourced from marginal farmers. Additionally, Green Grocery imports premium quality spices like cardamom and cinnamon to cater to customer demands.
Green Grocery is an online grocery store that directly serves customers (D2C). They offer a wide range of fresh grocery products on their website, as well as through e-commerce and physical outlets like Rockmari and Chaldal. Unlike many other companies, Green Grocery handles everything in-house, from product packaging to delivery. They have dedicated teams for logistics and packaging to ensure a smooth process.
For online orders, Green Grocery provides free home delivery for customers who purchase a certain amount of products. Additionally, they offer a unique service called “Grocery As A Gift” on their website. This service allows customers to send grocery items beautifully packaged as gifts to their loved ones. It has been a hit, and already more than 50 local and foreign companies have utilized this service. The company has plans to expand its product line in the future, adding new grocery items to its catalog. They are also working on increasing their physical outlets. Currently, Green Grocery delivers products within 24 hours of ordering. However, they are striving to achieve same-day delivery for an even better customer experience. Looking ahead, Green Grocery aims to serve the customers of the country more effectively and also explore exporting their products abroad.
Future Opportunity
From Bangladesh’s perspective, customers in the country are not inclined to spend much on grocery items. People still prefer the traditional method of going to the market or store to personally check and make purchases when it comes to buying groceries. However, there has been an increased concern about health and healthy food among the population. Despite this, the cost of fresh and safe food remains higher than regular food, making it unaffordable for customers of all income levels.
Another challenge for the e-commerce industry is building customer trust, especially in the context of food products. Although grocery e-commerce platforms are making efforts to create awareness about safe food and online shopping, trust-building remains an ongoing struggle.
In order to foster growth for these businesses in the future, there are some potential opportunities. If these e-commerce platforms can lower product sourcing costs, reduce delivery time, and establish efficient logistics and supply chains, they may be able to attract more customers and build their reputation in the market.
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