That the size and dynamic of a country's retail market is a true representation of its economy and people's living standard is yet to be recognised by policymakers and economists in Bangladesh. Or else, there would have been a comprehensive study on this sector with an annual transaction of more than $18.42 billion. The total transaction figure is the largest such deal on the domestic front and only second to the one involving export of ready-made garments (RMG).
It took the United Nations Capital Development Fund (UNCDF) to conduct a study on a particular level of retail business in the country. And the result is astounding. Retailers boasting assets worth less than Tk 1.0 million and employing no more than 15 employees were the subject of the study. Called micro-merchants, they are actually responsible for catering to the daily consumer needs of the people at the grassroots level. Surely, there are smaller traders with the bare minimum capital for investment in trade and their cumulative transaction demands a separate study. Their transaction figure may not be as impressive as that of the micro-merchants but it surely will not be negligible either.
Presently, though, the micro-merchants covered by the UNCDF are in focus and it is worth the exercise. Now the important issue is to find how inclusive and robust the trade at this level is. This is the best determinant of the country's financial health and the standard of living of the millions of customers with whom they interact every day. According to the study, 2.0 million people -owners, employees and labourers together -are involved with the retail trade. What is particularly interesting is the joining of 50,000 more such traders each year. The study finds that the median income of one such trader is Tk 90,000 a month. This shows that the trade is alive and kicking.
Common sense, however, says that two decades back it was not so. People's purchasing capacity was poor and the retail market was unsure about its jet-set take-off it has embarked on of late. Food production has witnessed a steady growth except last year when reversal in harvesting period in haor area made a dent into the total output. Today agriculture inclusive of aquaculture has diversified significantly and farmers have even gone for cultivation of more profitable exotic fruits. Happily, there is a class which can afford the pricey fruits once unheard of in this part of the world.
It is the positive ripple effect of well performing agriculture sector that has enabled consumers with a healthy average purchasing power. The poor and the hard-core poor comprise 24 per cent and 13 per cent of the population respectively and they have little access to goods the retailers sell from their outlets. Now the challenge is to reduce the poverty and get them into the fold of active consumers. If and when this happens, the consumer market in the country will expand depending on the proportion of their financial inclusiveness.
An annual entry of 50,000 more such retailers, however, points to the fact the sector still has room for them. But how large is the room? Surely it cannot be unlimited. Presently, it seems the business is secure enough. But there is a limit to the consumer demands. At a certain stage, when the business reaches its saturation point and stricter regulations enforced, it may no longer remain so profitable. After all, retail business should not be the only option for the productive segment of the young population. Production of an array of consumer goods targeting both domestic and foreign markets at small and medium enterprises (SMEs) should be a viable option.
Reading between the lines one finds that the retail outlets under study have been selling mostly similar items but those in high demand do not project a desirable picture. The study finds that cigarette is the most sold-out item. How disgraceful! A carcinogenous substance like tobacco is topping the list of sale. Then betel leaf also finds a place at the top. Other such harmful agents are unlikely to fall behind the most sold-out items. This is a clear negation of health, particularly given the choice of addiction or not. Potato chips finding its spot among the fast moving consumer goods also do not speak of care for health of the young population. Even the other items are mostly victuals where the share of carbohydrate is predominant. Only egg stands out as a source of protein.
This is a clear indication of deficiency in the marketing strategy. There is scope for diversifying the shelves through innovation. For example, dairy items can easily be accommodated with electricity reaching most areas of the country. Villagers may have alternative ways of supplementing their protein needs but there is serious imbalance in their dietary habits. The items sold from retail shops only confirm the prevalence of this deficiency in food intake.
Finally, their lack of access to digital financial service has been a constraint to regulation of the economy at the level. With Tk 90,000 income a month, they are taxable. More importantly, their credit-worthiness has been confirmed by BRAC Bank. If they have current or business accounts and make good use of banking, the economic base of the country will get further consolidated.
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