Is it too early for eCommerce in Bangladesh daccanomics
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Is it too early for eCommerce in Bangladesh?

Bangladesh is among one of the fastest-growing economies in the world and looking at the statistics we can surely say there is no turning back. The government of Bangladesh is playing a crucial role in the sudden rapid growth of its growing economy.

The ‘Vision 2021’ by prime minister Sheikh Hasina has been the key to the tech revolution of the country. Where technology has reached the furthest corner of Bangladesh people are yet struggling to adapt to it. The IT sector has seen a tremendous change in the country and has helped many of the unemployed youth with ways to earn.

IT is one of the primary sectors responsible for the country’s rapid economic development. As the information and communications technology (ICT) sector is growing rapidly, more than 120 tech companies export information and communications technology (ICT) products worth nearly $1 billion to 35 countries.

Within 2021, it’s expected that Bangladesh will export (ICT) products worth of  $5 billion. Bangladesh is now one of the largest marketplaces for freelancers who are providing quality work. While we have seen so much development in the IT sector, one of its core subsectors is doing dreadful. ECommerce has been failing miserably in Bangladesh in recent times. So why is eCommerce a tough game to play?


Although it looks like a cup of tea from the outside, it is never easy to run an eCommerce business. It takes a lot of work and hours of research just to get started. While we have seen many foreign or local investors showing interest and already investing, there are many small eCommerce companies going out of business every day.

There are few big players who have mastered the game of eCommerce and some still struggling just to survive. And for the newbies who are thinking to get into the business are struggling with ruthless competition from the giants in the industry. It is getting much harder and harder to acquire new customers and sell them products.

And returning customers is like a fairytale. The sustainability of eCommerce is based on better services they provide to their customers and turning them into returning customers. But most eCommerce companies are failing to do so.

There are many factors affecting the eCommerce ecosystem in Bangladesh and one of the essential is ‘services’. Statistics showed that 80% of entrepreneurs starting an e-commerce business just with an e-commerce site fail within the first 18 months. It is due to their inability to grow and adapt to the market situation. Entrepreneurs often push-start their companies without enough market research and an executable business plan.

Where capital plays an important role in scaling business, it often happens that most startups burn their cash on inventory and don’t focus on a viable marketing plan. An example of this is when an entrepreneur invests all his cash in inventory and there is no money for marketing or operation and so on, it’s certain sales won’t rise and the business will stay stagnant. To avoid this nightmare from happening, a startup should focus broadly on its marketing strategy. Because without marketing company will have no sales and without sales, the company can’t sustain itself.

Most of the companies that fail have a problem scaling their companies when needed. Due to bad customer experience and lack of innovation and adaptation, they seem to fade away quickly. Companies are failing to provide the customer with an easy user experience which is leading to fewer customers. Many people in Bangladesh are unaware of how to use eCommerce for online shopping. People need to be more aware of it and companies should promote their business in a manner where everyone can interact.

eCommerce broadly remains an urban service in Bangladesh. Although a significant percentage of eCommerce orders come from outside Dhaka. Due to bad logistics companies are facing problems reaching out to people living outside the metro cities.

Delivery companies are struggling to deliver products to customers on time. And there are so many instances of products being misplaced or lost. Although most companies provide doorstep delivery, in reality, most of the time customer has to get out of their houses to pick up their product from a near destination. Sometimes the customer is absent when the delivery person reaches out to deliver the product, for which they might visit multiple times to deliver the goods.

Another big issue the eCommerce companies are facing is payment problems. There are a very limited number of payment gateways that offer services to these companies. Due to lesser competition, the rates are high for each transaction.

And Bangladesh is a cash-dependent country and most of the population doesn’t use any electronic payment system which is a big problem for companies as they now have to do most of their transactions with cash. Although Cash on delivery is what started the eCommerce revolution in south Asia as companies like Flipkart became the pioneer of COD and had tremendous success.

Most of Bangladeshi eCommerce companies rely on COD and it’s working out well for the big companies. Cash on delivery gives the customer the opportunity to check their product before they buy it which increases customer trust. But also there are many fake orders across the country that causes smaller companies to suffer.

As these smaller companies are having a problem competing with the big boys of the industry there is another underdog who is dominating the market. The Facebook stores are the silent competitor. There are countless stores that are selling products through Facebook and doing very well in business. With very little expense people are getting a chance to start a business through Facebook.

It also helped small retail shops to have an online presence. Every single day there are so many people opening new Facebook business pages and selling their products. There is no extra cost to it. They don’t have to manage a server, they don’t need to hire developers or engineers and they don’t even need an office space to manage their daily work.

All they need is to reach out to new customers through Facebook and talk to them. Facebook became one of the largest marketplaces for people to buy and sell their products. There are no regulations to it.

Facebook is empowering small businesses. It is helping out artisans showcase their products and sell directly to customers. But due to no regulations, there are many people selling fake or damaged products and some are even doing fraud. Though Facebook is not an eCommerce company still it’s the biggest competition for the other goliaths in this industry.

So is it too soon for eCommerce in Bangladesh? No, it isn’t. But having said that people need to be educated more about eCommerce and it needs to be made reliable. People should get what they ordered and the services need to be improved. Big companies need to play an important role in making people aware of the benefits of eCommerce and making them comfortable shopping online. There is a huge potential market for eCommerce in Bangladesh and eventually, we will have to accept it.

Written by Daccanomics

Daccanomics is an independent news media company. It is founded with one purpose only – to give the much-needed and sought-after knowledge to help our readers.

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