Reflections on Current State of E-commerce Business

After the July-August revolution, there is no active participation of the e-commerce sector in the ongoing policy reforms undertaken by the interim government.

E-commerce can be an important sector in building a new discrimination-free Bangladesh and can contribute significantly to ameliorate the lives and livelihoods of more than 3.5 lakh MSME and SME entrepreneurs and 3.5 million people involved in the industry, especially online entrepreneurs who depend on Facebook.

Through this sector, it is possible to reduce the urban-rural disparity and tap into talented human resources and their potential. Even sitting in the village, a young man is able to deliver his products to consumers across the country online.

The number of agriculture-based e-commerce enterprises, especially outside Dhaka, is increasing. In the meantime, the sector is playing a role in the progress of the national economy by developing domestic industries and creating employment opportunities. However, there are still significant challenges in the e-commerce sector.

The Digital Commerce Act

During the previous government, the Ministry of Commerce finalised the Digital Commerce Authority Act 2023. There is scope to change the polices and regulate the sector through proper use of existing laws and policies. As a result, this law can be reviewed further.

In order to properly manage e-commerce business in the country and at the same time protect consumer rights, the government has formulated the Digital Commerce Policy in 2018, whereas the Ministry of Commerce has been given the responsibility to solve various problems prevalent in the e-commerce sector such as hacking, copyright or product price issues.

Foreign investment in the e-commerce sector

We need to restore the confidence of foreign investors to ensure continued growth of the e-commerce sector.

According to the 'Bangladesh Startup Investment Report 2024' revealed by Lightcastle Partners, an investment of only 19 million US dollars came to the country in the first half of 2024, which is 57 percent less than the previous year.

To overcome this, tax-related complexities, policy uncertainties and structural weaknesses have to be addressed.

Future prospects of e-commerce business in Bangladesh

According to a UNB report, the size of the country's e-commerce market was about Tk 568.70 billion in 2021, which was expected to reach about Tk660 billion in 2022.

Not only this, it is expected that the country's e-commerce market will reach 1.5 trillion (BDT) by 2026.

Number of customers and orders

According to data from Empowering Organisations to Scale Globally, as of early 2024, Bangladesh had 52.9 million Facebook users, equivalent to 30.4 percent of the country's population. About 15 million people use e-commerce every day.

More than 8 lakh orders are placed daily, and the basket size per order is 1250 to 1450. The daily e-commerce transaction is about 100 crore taka.

There are an estimated 3.5 million Facebook pages, including about 2,700 members of e-cab, who do business on F-commerce and Instagram. Of the three hundred thousand Facebook pages that do business, 95% are SMEs or small entrepreneurs, 4% are medium and 1% are marketplaces or large companies.

Reasons for optimism

People's engagement rate has increased a lot. Most of the people remain busy. They do not have the time or energy to go to the market and shop. There is traffic jam outside.

Due to these reasons, people are now comfortably shopping from e-commerce websites sitting at home. Since these websites have payment gateways attached to them, they are also able to make payments through their bank accounts or mobile banking accounts.

E-commerce has made it easier for people to shop. As a result, the number of people who buy from e-commerce sites is constantly increasing and this number will definitely increase in future as well.

Problems

A big problem is fraudulent activities. E-commerce companies are cheating the customers in many ways. Products are not delivered on time.

The e-commerce industry has already been criticised due to fraud and money laundering related irregularities. Some sites do not ensure quality products and fair price, so buyers often get cheated. To address these issues, steps must be taken.

E-commerce sector has already shown promise. If the existing problems are addressed properly, this sector has the potential to become one of the most successful sectors in Bangladesh in near future.

Above all, industry players expect a business-friendly environment and supportive policies from the interim government, which will help to lure in foreign investments.

The writer is the founding member of e-Cab