E-commerce: concept familiarization, recent trends and e-commerce in Bangladesh
Md. Nurain Haider
One of the most popular catchphrases in the field of modern business and trade is Big data. It simply describesthe buying and selling of goods and servicesor the transmitting of funds or data, by using the internet. Due to globalization, the practice of e-commerce over the countries is rapidly growing as an impressive manifestation. The main purpose of the literature is to familiarize the concept of e-commerce and its effects Bangladesh over the years in an easily perceived manner. The article starts by depicting an overview of e-commerce, its recent trends, basic advantages and recent challenges faced by the developing countries. Then, the focus has been givento highlight on how Bangladesh has adopted e-commerce, present actual situation, prospects and recent practicesof e-commerce in the country. The basic intention of authors is to decipher the insight in an intelligible manner embodying in smooth and in a palpable fashion.
The internet has been stimulating the pace of advancement in IT sector in a revolutionary way which is making every aspect of life more flexible 13. Specifically, in the field modern trading, there are immense success brought by the usage of IT platform. Electronic commerce, a recent adopted platform for business, provides unprecedented amenitiesto every country. It determines a methodology which introduces the necessity of merchants, corporations as well as the consumers for purposes of increment and fast delivery of products while cutting the expense at a larger scale. Specially in developing countries, the effects of adoption of e-commerce is prominent for both short term and long term4.
Nowadays, a huge amount of people does almost everything using theInternet, from researching to buying products online. The Internet is thoroughlyaffecting almost all kinds of trades and businesses. It has been being used by business in many tasks including the ability toadvertise, generate, or perform business functions on a regular basis. For this reason, a lot firms areperforming their activities through the Internet. Still, an impact for e-commerce which needs to be confronted successfully by every organizationis to intensify competitionand providing benefits to consumers in cheaper rates and more choices2.
Due to emerging global economy, a prominent catalyst for economic development and an essential entity for business strategy is now the e-commerce. Though at the initial stages, Bangladesh, as a third-world developing country was far behind to reach theexpected level in this system, the practice of e-commerce in recent years has dramatically increased1.Among the 4 major types (B2B, B2C, C2C, C2G) of e-commerce, Bangladesh has adopted the B2B (business-to-business) application more successfully3.
E-commerce: an overview
E-commerce simply refers to the purchasing and selling of productsas well as services on theInternet nationally or internationally. Besides, buyers and sellersutilize Internet to see the latest trend of products sales, prices, new arrivals and so on to become updated beforedoing any purchase on online or at a traditional store. E-Business, sometimes referred as similar term to e-commerce, is used to define a procedure how the Internet is altering the waycompanies do business, communicate to theircustomers and suppliers, and make marketing decisions2.
E-commerce has two important roles. Firstly, it has to work as a more effective andefficient conveyer and integrator of information. and secondly, it has to be a potential mechanism for the competitive outside suppliers who can manipulate many economic activities that are performed within a business enterprise. The chances of B2B and B2C transactions across borders are being expanded by the Internet. It creates opportunities for the individualization of trade which is a global revolution specially in the field of business to consumer(B2C) transactions. E-commerce provides flexibility to consumers for conducting a transaction with a local or foreign seller directly without traveling to theseller’s place. In addition, the sellers can put their storefronts in the form of Web page to attract potential buyers and marketize all over the world. Truly, technology has enlarged the consumer marketplace to an unprecedenteddegree18.
The number of Internet users has reached two billion worldwide which is still growing at a dramatic speed 19. Therefore, the influenceofe-commerce is stretching faster. Even, it can be used as a trading system in which a genuine marketplace is being established among the buyers, and sellers. The world’s biggest online marketplace- eBay can be exampled in this regard where more than 90 million active users transact globally and it is the place where practically anyone can purchase and sell anything.As an impact on e-commerce, around products of $60 billion was sold in 2009 when $2000 were transacted in every second, the rate is still staggering18.
Recent Trends in e-commerce:
Almost every companies or shoppers which have adopted e-commerce for business activities are now providing a way consumer can access pages from smart phones,tablets and other mobile devices. Now, they are making their e-commerce sites mobile-friendly and responsive for all types of devices maintaining the strategy that if online stores have the capabilities to operate good on mobile devices,they will attain more visitors,customers, revenues and savetime, effort andmoney. Responsive design provides a better userexperience which can enable easy reading andnavigation through resizing, panning, andscrolling. Next, another common trend is personalized product recommendations which assist to customers for searching products, seeing all features and get the service faster according totheir choice. This aids the owners to have better and long-term customer relationships and increase sales. Apart from this, there is a subset of electronic commerce known as social commerce whichinvolves social media and online media where interactions between sellers and buyers have become easier. Social commerce and networking services allow companies to run ad campaigns to get the potential customers and permit customersto rate the service, share their experience with others, receiverecommendations, advices as well ascommunication which boost sales and popularity of the online businesses. Besides, to ameliorate theoverall customer experience, at present companies aretrying to abate the processing time of search, product selection, ordering, customer care service and delivery of products andservice. Moreover video-based marketing, increasing trust to the customers by proving more security,invention of new technology and devices has greater impact on current e-commerce trends1415 20.
Advantages of e-commerce:
From the customers point of view, the basic benefit is the system is quicker, convenient and user-friendly. Consumers save a lot time and money to search a product or a service and purchase it and as there is no time limit, anyone can purchase products in 24 hours a day, making the transaction more comfortable. They can also avail description as well as details from an online product catalog. Transaction expenses have also been reduced than that in a market. Furthermore, consumers can easily alter the service of a company to another if it is not up to the satisfactory level.A fringe amenity is – a customer can purchase a product that is rare to find or not available in the local or national market but available on online which indicates the availability of vast ranges of products.
Sellers get the increased revenue and can abate operation, purchasing, procurement and maintenance costs through the system. As all of the customers can communicate the seller(s) at any time via online, there is no transportation costs except the shipping expense only. Business owners and sellers can raise customer loyalty and retention easily. More importantly, the branding of products and process of selling have become so faster2 25.
Challenges of e-commerce faced in developing countries:
Developing countries have adopted e-commerce facingvarious challenges which differfrom those in developed countries 21. The basic elements required for implementation of e-commerce are funding, proper management, legal and physical infrastructure which developing countries are often lagging to adopt. Also, there are cultural stigma that hinders the adoption capability ofe-commerce22. So, the practice of e-commerce has come slowly having lower level of sophistication. There are abundant factors which influence the decision of consumers and firms for adopting e-commerce in various countries for example – making decision on which technology to use, cost factors, and other organizational, technological and environmental factorsidentified as the most crucial23.The pace of adoption in these countries has been constrained by the quality, availability,and expenditure of accessing infrastructure. Besides, the low level of information andcommunications technology (ICT) and internetdiffusion in developing countries haves also decreased the practice of e-commerce21. Apart from this, the sizes and range of the most businesses are small and there are not adequate resources for investing in information technologies to face the obstacles of e-commerce adoption. In spite of having these obstacles, there are practices such as – doing businesselectronically, electronic-based intra and inter-business relations, dealing with non-cash payments and so on are instigating the business owners and small enterprises to implement the practice of e-commerce in these developing countries at a larger scale24.
Adoption of e-commerce in Bangladesh:
The rapid increase on the world’s Internet population and adoption of ICT in different sectors havereshaped the communication methods and has been successfully utilizing the stimulating factorssuch as cost, convenience, speed, efficiency and other uniqueness of the technology in differentfunctional areas 1. Like other sectors, business activities are also being improvised by selling ;transacting of goods ; services through many technological innovations, which is referred asecommerce 2. In developing countries, especially in Bangladesh, a large number of SMEs (Smalland Medium Enterprises) have already adopted e-commerce as the main or alternative approachfor their business procedures1.
Though the pace of adoption of e-commerce in developing countries is much slower than that ofother developed countries, governments of the countries are implementing rapid actions to havethe tremendous effects on e-commerce. The Bangladeshi government has made country’s visionto develop Digital Bangladesh by 2021 and initiated modification in national ICT policy 2009which reiterates establishing e-commerce by 2012 and e-governance by 2014. According to BASIS(Bangladesh Association of Software and Information Services), in just three years, more than2000 online trading platforms have made their way to Bangladesh1 2.
According to some current researches, the common types of businesses that have adopted the electronic way for business activities are:
1. Banking Organizations (ATM card and mobile banking etc.)
Now-a-days, banks are introducing e-commerce system towards their customers (B2C).Almost all the banks of the country are based on online transactions i.e. e-commerce.Anyone can send & receive money from anywhere on 24×7 basis. It indicates that visionarysectors are taking e-commerce as an opportunity3.
2. Clothing Organizations (Online purchase, credit card facilities etc.)
At present, clothing sectors are ensuring much efficiency by reducing the cost of havingshops and doing online business. Buyers just order the product by single clicking from theirconvenient place.
3. Gadgets (Online)
4. Travelling agencies
5. Traditional Goods
Restaurants, continental shops etc. are providing efficient business communication.
The vehicle sector has been changed dramatically. The global firm Uber took place inBangladesh and “Pathao” which is an initiative of some university students of Bangladesh areonline vehicle services proving business (B2C) using e-commerce and that has become anenormous indication that popular sectors are transforming & taking the advantage of ecommerce3 5.
So far so good, Bangladesh has not yet succeeded in implementation of e-commerce strategiesbecause of limited number of internet users, only 37 million internet users at the end of April 2014 6. Poor governance and demoralization of trade specially to the e-commerce activities are the major causes of ineffective e-commercedevelopment in the country. 7 According to a recent a commercial survey, there are total 6460Bangladeshi web-sites and only 430 web-site provides online reservation and online paymentsystem. This really indicates an early stage of the adoptionof e-commerce. Some companies already introduced e-commerce with a big platform and they are influencing othersto adopt and compete.But the banking sectors have been successfully utilizing the blessings brought by the e-commerce. For example, mobile banking, online bill pays services etc. are now supportedby the most online banks, even purchasing and selling products through debit or credit card is also providing more flexibility. In addition, retail shops and banks are working togetherto get moreclients through e-payment system6. To justify the adoption of e-commerce which has perceivedcredibility and computerized self- efficiency have been added with Perceived usefulness andPerceived Ease of use. Statistical analysis of all data including recent surveys demonstrated that allfactors of ETAM that has significant impact on introducing of e-commerce in Bangladesh 7.
Present e-commerce status in Bangladesh and in the whole world
Global e-commerce is expanding rapidly and several trillion dollars are being exchanged annually over the web. Grau (2008), a comprehensive study on e-commerce, predicted that by 2010 U.S. retail e-commerce would be about $182.5 billion and it was $167.3 billion and in 2016 it would reach at 392.5 billion 8. European B2C e-commerce was expected to reach almost $234 billion by 2010 but it reached almost $250 billion and in 2016 it was about $975 billion 8. Another one – Wigder et al (2009) of Forrester Research predicted that there will be 2.2 billion Internet users worldwide and Asia will be the biggest global growth engine. China and India are taking the lead of b2c e-commerce sale in Asia 9 12.
Despite being a poor country, selected segments of the Bangladeshi business communities have embraced diversified technologies with reasonable success. The Facsimile in the 1980’s and mobile telephones in the 1990’s popularized modem technology in the mass market. High-velocity internet connectivity through submarine superhighway was launched in 2005. In addition, the government had brought some alterations in national ICT policy in 1999 10 which allowed to establish the e-commerce by 2012 and e-governance by 2014. At present, the usage of personal computers and the Internet have also been emerging as regular business tools which positively indicates the prospects of e-commerce in Bangladesh 10.
Arising of modern technologies is giving challenges to the previous laws of government, results in applying new laws and formulas which sometimes have become so much prominent that many countries have welcomed Bangladesh many times to adopt new technologies. Providing security and insurance for e-commerce transaction are mostly not up-to-date with modern technology. Therefore, e-commerce is spreading its influence at a slower rate to the Bangladeshi people than that of the whole world.
Nowadays, the present government is trying their best to digitalize Bangladesh and introducing more advanced technologies to Bangladeshi people. Providing high-speed internet to people including remote areas is a big step forward for e-commerce. They are frequently changing rules and regulations for ICT improvement. Now, for getting higher bandwidth and 3G connection, the rates of online shopping are increasing day by day. Competition for the e-commerce business is also increasing rapidly. Lots of shops are now getting influenced by observing other e-commerce sites’ growth. The mobile banking system of Bangladesh is providing the immense advantage to the e-commerce transactions. There are approximately 1 million mobile users who use the mobile banking services and roughly over 100 core transactions are made through the mobile banking per month 11.Many enthusiastic merchants have reestablished their existing business in the form of online to get clients all over the world. Besides, there are e-bank fund transfer and e-bankingpayment which has facilitated the customers to pay their utility bills through ATM, onlinebanking or SMS banking systems from anywhere anytime 17.In some recent years, the practice e-commerce has increased so rapidly that now there are more than 2500 e-commerce websites and 1 million online buyers overall and 50% of them are from Asia market 11.
Overall scenario of e-commerce has been dramatically changed in the country over this few years than never before! To be precise, a lot of business firms and companies are setting up their websites, even a few are introducing mobile applications to provide info about the company profile, products, and services. Internet shopping platforms such as Cell bazar, Daraz, Bikroy.com, ekhanei etc. have been changing the trend of the approach to business and communication between buyers and sellers. Almost all the necessary utensils and services are sold and purchased on these platforms. Users pay standard SMS, WAP and voice rates to access the service. Government is trying to allot bandwidth internet services in almost everywhere, so day-by-day trend of B2C is being increased at a moderate pace 5.
Merits of e-commerce inBangladesh:
There are many areas where e-commerce has brought tremendous benefits. Some benefits are as follows:
1. Dynamicity of business: ways are expanded.
2. Deduction in unemployment rates: Large group of people have engaged in this field and are getting amenities from various horizons.
3. Modernization of communication methods: anytime, anywhere with anyone.
4. Globalized business: Access to the global market.
5. Increased competition: against local and international companies.
6. Increased number of SMEs.
7. Increased GDP 11.
Demerits of e-commerce in Bangladesh:
By adopting e-commerce in the country, there has been some tremendous benefits on IT and business sectors, still the practice of it has some bit drawbacks as well.Though these are very little compared to the benefits and can ignored, a brief discussion might be helpful to become concerned on the issues. Some drawbacksare noted below-
Afraid to adopt:Most of the small business owners are illiterate or have zero knowledge on IT. So, they dare to adopt e-commerce in their businesses which makes the process complicated to reach to large amount of companies in this country.
Complicated System:As it is depended on online, people having no knowledge on how to use the internet cannot reach e-commerce.
Protection: Due to unethical hacking and security problems, online accountswhich are used for purchase and selling on the web cannot be secured always and sometimes a trustworthy transaction cannot be guaranteed.
Risk: There is always a risk of payment transaction and buying products due to the presence of fraudulent people and hackers.
Language problem: Business owners or sellers have lack of knowledge on English, resulting to have fear to reach to the potential international customers.
Relation Problem:Sometimes, a loyal relation cannot be possible to make between client and seller on online which is comparatively easier in manual physical business relation.
Constrains of e-commerce in Bangladesh:
1. There are still lack of e-commerce website users.
2. Inadequate infrastructure of telecommunication.
3. Very few people have international credit cards.
4. Prices of computer resources are higher than other countries.
5. Technically adroit personnel are fewer.
6. Lack of investment in IT sector.
7. Connectivity is poor with online banking.
8. Insufficient cyber laws.
9. Sloweras well as expensive Internet services.
10. Bureaucratic complications.
11. Absence of sufficient awareness at government level of e-commerce issues 11.
Recent e-commerce services in Bangladesh:
Due to the fast-growing rate of Internet and mobile users, people are becoming smarter to buy and sell their products. In spite of various obstaclesthousands of e-commerce websites areestablished and many well-established companies are adopting the e-commerce services. Although there are no up-do-date transaction services like PayPal or Payoneer services, the sites are still expanding the sales throughout the country. in Bangladesh. There are also massive number of involvement in the social media platforms such as – Facebook, twitter and Instagram where business owners promote their products very easily and even they directly sell on these platforms. Some fields where e-commerce is being practiced include – purchasing railway tickets online, domestic air tickets, hotel booking, electronic products, books, giftitems, jobs, hotel reservation clothing and some food items and many more. Major e-commerce websites in Bangladesh are given below-
15. foodpanda.com 26.
A new innovation technique that has brought new dimensions in the field of business and trade is e-commerce. E-commerce market is alteringfaster and getting moreand more attractive for consumers by offering them new fringe benefits and unmatched conveniences. So far so good, there are assumptions that e-commerce is directly and indirectly creating and vanishing jobs. At one side, newer jobs is being generated in the information and communication technologies sector that was never imagined before, while the indirect creation of jobs is occurring via increased demand and productivity. Nevertheless, the practice of it is being warmly welcomed by almost all the countries. Many governments and global businesses have been trying to establish a global information society where they can compete with their competitors to avail the major bulk of business market. Bangladesh is not so far behind. The country has already burgeoned most of its trading sectors into online. Embracing latest technologies, decreasing cost of computer products, increased engagement of businesses, social media impact on commerce, increased dependency on telecommunications and information technology etc. are the positive stimulating factors that are triggering the prospects of e-commerce in Bangladesh. If the government tries harder to implement some new cyber laws, provide necessary training on the importance and potentiality of e-commerce, provide more latest features for online transactions with greater security and solve the existing constrains, the country will be greatly benefitted and step forward to becoming as a developed nation.
1Md. Shah Azam and Mohammed Quaddus, “Adoption of e-Commerce by the SMEs in Bangladesh: The Effects of Innovation Characteristics and Perceived Risk”, Graduate School of Business Curtin University of Technology, Australia.
2Abdul Gaffar Khan, “Electronic Commerce: A Study on Benefits and Challenges in
an Emerging Economy”, MawlanaBhashani Science and Technology University, Bangladesh.
3Monoj Kumar Majumder, Faijul Islam, Md. Nazrul Alom and Md. MoshiurRahaman, “A study on e-banking system in Bangladesh”by SAU, Bangladesh.
4 Panagariya, A. E-Commerce, WTO, and Developing Countries. Policy issues in international trade and commodities study., Series No.2 UN, New York and Geneva. 2000, pp 1-33.
5Roni Bhowmik, “The present e-commerce situation in Bangladesh for B2C e-commerce”, Shenyang Aerospace University, China.
6 “BTRC, Bangladesh Internet Subscribers Statistic Report”, Bangladesh Telecommunication Regulatory, 2014.
7Md. Rakibul Hoque, Mohammad Afshar Ali and Mohammad Abdullah Mahfuz,”An Empirical Investigation on the Adoption of E-Commerce in Bangladesh”, Asia Pacific Journal of InformationSystems.
8Grau, J. (2006), “Europe Retail E-Commerce: Spotlight on the Uk, Germany and
France”, retrieved from: http://www.emarketer.com, July 28, 2008 “US Retail E-Commerce: Slower but Still Steady Growth”, retrieved from: http://www.emarketer.com, July 28, 2008(a)
9Wigder, Zia Daniell, Patti Freeman Evans, Vikram Sehgal, and Brendan McGowan ,”Global Online Population Forecast: 2008 to 2013″, retrieved from: www.forrester.com 2009
10United Nations (1999). UNCITRAL Model Law on Electronic Commerce with Guide to
Enactment 1996 with Additional article 5 bis as adopted in 1998. New York. Available online at
11Md. Mohiuddin, “Overview the E-Commerce in Bangladesh”, IOSR Journal of
Business and Management”,(IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16,
Issue 7. Ver. II (July. 2014), PP 01-06.
12Nitish Singh, Hadi S. Alhorr andBoris P. Bartikowski, “GLOBAL E-COMMERCE: A PORTAL BRIDGING THE WORLD MARKETS”, Journal of Electronic Commerce Research, VOL 11, NO 1, 2010.
13Md. Saiful Islam and Shareeful Islam, “E-commerce: Technology and its perspective in the developing countries”, IUT, Jan-June 2002.
14Yaqi Guo and HU Jun, “Research on Business Model Innovation of E-Commerce Era”, International Journal of Business and Social Science Vol. 5, No. 8; July 2014.
15Shaji Thomas, Prince V Jose, “Recent Trends in E-Commerce”, International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056.
16Bhaskar P.K., Sinha N.K., Chowdhary B.K. and Mishra S.K., “E-BUSINESS AND E-COMMERCE – ITS EMERGING TRENDS”, Journal of Intelligence Systems, ISSN: 2229-7057 & E-ISSN: 2229-7065, Volume 2, Issue 1, 2012, pp.-14-16.
17JannatulMawa Nupur, “E-Banking and Customers’ Satisfaction in Bangladesh:An Analysis”, International Review of Business Research Papers, Volume 6. Number 4. September 2010.
18Ham, S. and Atkinson, D. R. “a third way framework for global e-commerce”, Progressive Policy Institute, Technology & NewEconomy Project, March, 2001.
19Internet Usage Statistics World Internet Users and Population Stats, http://www.internetworldstats.com/stats.htm.2010.
20Prof. Dr. BadarAlam Iqbal, “E-COMMERCE VS MOBILE COMMERECE”, International Journal of Applied Research Volume 2, 2013, Page 1 – 24
21 Molla, A. and Licker, P.S., “eCommerceadoption in developing countries: a modeland instrument,” Information and Management,Vol. 42, No. 6, 2005, pp. 877-899.
22Enns, H.G. and Huff, S.L., Information technology implementation in developing countries: advent of the Internet in Mongolia”, Journal of Global Information Technology Management, Vol. 2, No. 3, 1999, pp. 5-24.
23Enns, H.G. and Huff, S.L., “Information technology implementation in developing countries: advent of the Internet in Mongolia”, Journal of Global Information Technology Management, Vol. 2, No. 3, 1999, pp. 5-24.
24Odedra-Straub, M.O.S.M., “E-commerce anddevelopment: Whose development?”, TheElectronic Journal of Information Systems inDeveloping Countries, Vol. 11, 2003, pp. 1-5.
25Brianna Wills, “18 Major Benefits of e-Commerce Business for Retailers & Customers 2018”, Retrieved from – 18-major-benefits-of-e-commerce-business-for-retailers-customers-in-2018.