The first of a two-part article titled Prospect of e-commerce in Bangladesh
Few months ago, during my visit to Dhaka I was faced with the difficulty of finding the right mode of transport one morning. My nephew, a grade seven student, came to my rescue. He helped me using his smartphone to call for a Uber ride. Although I live in a developed city where Uber is very popular, I never used this commuting facility. So, I was a bit hesitant initially to use this third-party ride, particularly in Dhaka city. However, my nephew convinced me saying that Uber nowadays is not only convenient, but also a safe and faster mode of commuting in the city. Although first time in my life, I was highly satisfied with the Uber ride in Dhaka. My nephew tracked me on the entire route and the fare was exactly what he showed in his smartphone.
After that ride, I appreciated Bangladesh's adoption of innovation and technological advancement. Internet-based lifestyle has already made its way to every sphere of people's living. People, particularly the young people, are on internet almost all the time. Keeping pace with the country's economic growth and with the tremendous rise of per capita income, people's taste, preference and spending spree have spectacularly risen. The country has now emerged as a market of 100 million people, who can afford durable consumer goods and quality services. This huge market segment is the attraction of enormous investment opportunities from both domestic and international sources. Now Bangladesh will have to be well-prepared to capture this investment opportunity.
ADVANCING VIRTUAL MARKET: Investment is being made nowadays in a faster pace in startups where technology is the key. All goods and services are being channeled through technological means. Virtual market is rapidly engulfing traditional chain and departmental stores worldwide. Once shopping was people's hobby, as they used to go to the shopping centres occasionally and select preferred goods which is no longer the case. It's very hard to believe that time has come when people buy their breakfast, lunch and dinner online. Naturally, the wave of e-commerce has hit Bangladesh too.
In the world of e-commerce, Amazon and Alibaba are the two giants. Alibaba is still somewhat confined within China, while Amazon has already emerged as an unparallel global leader. Alibaba has recently moved to capture a slice of the world market, especially in Asia, while Amazon has not only penetrated in many emerging markets but also consolidated its position in the market. In fact, Amazon's online shopping popularity has become a big threat for the world's largest retailer Walmart. In order to compete with Amazon, Walmart has decided to simultaneously run both its virtual market and the physical departmental stores. Walmart customers have now both options opened as they can either shop online using Walmart Apps or go to the nearby Walmart store to pick and buy their preferred goods.
WORLD'S GIANT ONLINE MARKET: After maximising their sales volume in the developed world, the two giant companies have now embarked on the emerging markets. Initially, they both targeted India where they've already made enormous investment for developing virtual market. Their initial success is praiseworthy and online shopping has become very popular in India now. India's economic development, rapidly-growing middleclass, and rising per capita income have drawn these two largest online marketplaces. Bangladesh possesses same fundamentals and even the magnitude of some fundamentals is much better there. So, obviously there is a very good prospect of e-commerce in the country and we should actively consider using Amazon's e-commerce platform. One has to keep in mind that since Amazon has already penetrated in neighbouring India, it will soon enter Bangladesh market too. Therefore, we should actively consider introducing e-commerce in an organised way and inviting Amazon could be an easier and faster move. However, prior to moving in that direction, having good preparation is a must.
EXISTING SHOPS CAN WORK FOR AMAZON: Mere invitation to Amazon for commencement of their online marketing operation in Bangladesh may not initially produce fruitful result. Because, they will not be interested to start from a rudimentary level. Instead, they may consider establishing their presence through any existing platform to foresee future prospect and success. In Bangladesh, there are many retail and wholesale shops which have attained consumers' trust and confidence and enjoy goodwill. Such types of shops/stores are found all over the country. These stores across the country may consider establishing association on the basis of some terms and conditions, which they will stringently comply with in ensuring consumer satisfaction. In order to demonstrate the association's active role in guaranteeing customer satisfaction, an effective department/centre for addressing customers' concern must be maintained within the association. Active presence of such a centre will eventually enhance service standard and customer focus of the shops.
Guaranteeing customers' satisfaction is the main slogan of online market. So, the shops that may consider exploring the opportunity of working for Amazon must have to ensure that appropriate policy is in place to guarantee customers' satisfaction. Such association should develop the modus operandi and approach Amazon for starting its virtual market through their member shops. If Amazon can be convinced and all terms and conditions are mutually agreed upon, Amazon will provide its online marketing Apps to those shops, which will receive and deliver goods and services to the online shoppers within each shop's jurisdiction. At the same time, Amazon will make its online ordering facility available in Bangladesh and people will place their order through this online Amazon shopping App. If this initial process works well and is found satisfactory, then Amazon may come forward in streamlining the country's courier/postal system and also organise the payment method. Applying such procedure, Amazon has achieved spectacular success in rapidly spreading its online marketing in the emerging markets including India.
Nironjan Roy is a banker.