Assignment

on
Electronic Commerce in Bangladesh

Topic: The future of Ecommerce in Bangladesh

Submitted To:
Md. Moktar Ali
Associate professor
Department Of Marketing
University Of Dhaka


Submitted By:
Md. Mustafizur Rahman
Roll: 89, Section: A
Department of Marketing
University of Dhaka


Date of Submission: January 8, 2014


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It is very inconvenient for a consumer not getting a product in his locality when it is available in
other places. It happens in Khulna, Sylhet and other areas. For example, Khulna residents need to
come to Dhaka to buy rare medicines. Students of Rajshahi University need to come to Dhaka to
get their reference books at Nilkhet. It would be convenient for them if they could order online.
It would save their time as well as money as consumers. For the country, it would increase
employment. Online transaction would boost the gross domestic product (GDP) growth and thus
help Bangladesh achieve the Millennium Development Goals (MDGs). In the era of
globalization, the Internet makes the world smaller and e-commerce facilitates marketing and
shopping from home. E-commerce facilitates business with customers over the internet. In e-
commerce, customers can buy goods and services over the internet.
The ruling government of Bangladesh with the slogan of Digital Bangladesh has been focusing
on implementing e-commerce in every sector of this country. In todays knowledge-based global
economy, the quality of a countrys information infrastructure will help determine whether
companies invest there or elsewhere. Therefore countries like Bangladesh need to recognize that
development of their information infrastructure is the key to creating jobs and attracting new
businesses.
Brief idea about e-commerce
E-commerce can be defined as modern business methodology that meets the needs of the
organization, traders and consumers to reduce their costs while improving the quality of goods
and services and speed of service delivery. E-commerce is associated with the buying and selling
information, products and services via computer networks. A key component of e-commerce is
information processing. The term also refers to stocks online, bond transactions, buying and

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downloading software without ever going into a store. In addition, e-commerce includes
connections to business to business (B2B) that makes purchasing easier for large companies.
In general, E-commerce is described as a method of buying and selling products and services
electronically. The vehicle of e-commerce is the Internet and World Wide Web, but the use of
electronic mail, orders by fax and telephone are also prevalent. The benefits of E-Commerce
include the facilitation of information processing based enterprise to meet and interact with
customers to make online customer service line, etc. E-commerce also reduces costs in order
management and interacts with a wide range of suppliers and trading and trading partners, areas
that typically add significant overhead to the cost of products and services.
E-commerce and economic efficiency
In todays knowledge-based global economy, in which capital and technology are increasingly
mobile, the quality of a countrys information infrastructure will help determine whether
companies invest there or elsewhere. Therefore countries like Bangladesh need to recognize that
development of their information infrastructure is the key of creating jobs and attracting new
businesses. A key reason why electronic commerce, is growing so fast is its significant impact on
business costs and productivity. Because many of these applications are relatively simple, they
may be expected to be widely adopted and have a large economic impact. A key factor in
reducing inventory costs is adopting a just-in-time inventory system and improving the ability
to forecast demand more accurately. Both of these can be accomplished through the adoption of
electronic commerce, which strengthens the links between firms (OECD).


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Benefits derived from e-commerce
Businesses without the barriers of time or distance
Direct cost-of-sale for an order taken from a web site is lower than through traditional
means
Virtually eliminates processing errors
Faster and more convenient for the visitor
Fdeal for niche products
Cheapest means of doing business
Reduction in buyers sorting out time.
Better buyer decisions
E-Commerce facilitates business community
Less time is spent in resolving invoice and order discrepancies.
Increased opportunities for buying alternative products.
Document preparation
Error detection and correction
Reduce the delivery time, labor cost and the cost incurred in the areas such as Telephone
calling, Credit card machines, Data entry, Overtime, Supervision expenses.
E-commerce in Bangladesh
Bangladesh is slowly but surely entering into the e-commerce era. Bangladesh already has
trained IT professionals. Bangladesh already has an abundance of trained IT professionals.
Introduction of e-commerce would open new employment opportunities in the country. The
member of IT users in Bangladesh is increasing rapidly. All the districts headquarters have

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cyber cafes. Youth accounting for more than 35 per cent of the total population gives Bangladesh
an edge to opt for e-commerce. The country needs intermediary institutions to complete
transactions. And fortunately, banks, Visa and Master Card operating in Bangladesh, can do it.
Bangladesh has the infrastructure to start. Stable internet connection and a law supporting e-
commerce are prerequisites. The government needs to make a realistic e-commerce law. It
should work in collaboration with the private sector to ensure a stable and reliable internet
connection.
Internet Usage and Population Statistics
YEAR Users Population % Usage Source
2000 100000 132824000 0.1% ITU
2007 450000 137493990 0.3% ITU
2009 556000 156050883 0.4% ITU
2010 995560 158065841 0.6% ITU
2012 13000000 163654860 6.3% WB

Source: Internet usage statistics, internet world stats.



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E-commerce in different sectors
e-commerce can bring the best possible outcome in RMG Sector, Banking sector, Online
Shopping, Web Hosting, Domain, Pay Bill, agricultural sector, Online cards, gifts, Education etc.
Following is a sector wise brief discussion about the status of e-commerce in these sectors, major
possibilities and constraints.
E-Banking
The definition of e-banking varies amongst researches partially because electronic banking
refers to several types of services through which bank customers can request information
and carry out most retail banking services via computer, television or mobile phone.
Banking has never been more important to our society than it is today. The advance of
communication and computer technology and the availability of the Internet have made it
possible that one can do most banking transactions from a remote location even without
stepping into a physical financial structure - that is, the emerging of e-banking (Bruene,
2002). The way Bill Gates (2008) announced that banking is essential, banks are not.
This quotation means that the traditional bank branch is going to vanish in order to be
surrogated by electronic banking which continues to attract new users. The banking
industry believes that by adopting new technology, the banks will be able to improve
customer service level and tie their customers closer to the bank.
E-commerce in RMG sector
In RMG sectors have the lions share of export earnings of our country. E-commerce most
effective use is possible in the RMG sectors of our country. The producer or traders of RMGs

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deals with buyers and merchandiser all over the world. Through e-commerce they can be
connected globally. By entering into the global network the process of RMGs get easier. It is a
matter of hope that our RMG sectors has entered into this e-commerce era. The producers of our
country contact with buyers online take order online and get their payment by electronic fund
transfer. These process of e-commerce reduces the time, cost to a great extent.
Agricultural e-commerce
The agricultural business in Bangladesh is encircled by three types of agents including
producers, traders and consumers. The traders are not doing anything special but gaining the
super normal profit of the business. This system exploits the producers directly not to give the
appropriate portion what the producers deserve really. Agricultural e-Commerce will abolish
these traders to optimize the present business structure by providing the normal profit to the
producers (farmers) and minimum price for the consumers. Producers and consumers related to
agricultural sector should have the privilege to get the perfect information about the agricultural
products, crops, market information, weather news etc. Internet with e-commerce facilities can
fulfill all these requirements.
E-commerce shops
In our country there are some e-commerce shops. But the numbers of these e-commerce shops
are very few. Entrepreneurs should come forward in order to start more e-commerce business.
When the problems regarding e-commerce will lessen then more people will come forward.
Some E-commerce shops (web sites) in Bangladesh
www.clickbd.com

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www.cellbazaar.com
www.webbangladesh.com
www.haatbazar.com
www.bdbazar.com
www.bengalcommerce.com
www.sonarmarketplace.com
www.upoharbd.com
www.bdgift.com etc.
Required E-infrastructure
Before moving towards the major constraints of e-commerce first we should take a look at the
required e-infrastructure in Bangladesh.
Network Infrastructure
Intra-bank and Inter-bank Connectivity: Local and Global
Bank-Client Connectivity
Security of transaction
Legal infrastructure
Amendments of a Set of Laws
Incorporation of New Laws: Cyber Law and digital signature law
Digital Crime: Network Security and Penal Code

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Role of Government
The present government came to power with the promise of building a "Digital Bangladesh", and
has kept consistent focus on this promise thus far. This has resulted in a political climate highly
supportive of and favorable to e-government projects. In the way of achieving this objective our
country has adopted the national ICT policy. The objectives of Bangladesh national ICT policy
2009 are: Social equity, Productivity, Integrity, Education and research, Employment,
Strengthening exports, Healthcare, Universal access, Environment, climate and disaster
management, Support to ICTs.
Strategic priorities of digital Bangladesh
The vision of the government is to create a conducive environment where private sector can
operate efficiently through improving the support structure like banking, increasing
government efficiency in regulatory clearance, taxation, payments etc. Also to build a
connected nation with high speed broadband Internet connection with last mile access which
enables a connected citizenship and to unleash potential of youth talents and create good quality
employment for them in the IT sector through cluster of innovation driven entrepreneurial
initiatives. Effective use of ICT in improving commerce and investment in Bangladesh can
have significant impact in equitable economic growth in Bangladesh.
The Ministry of Commerce and ICT in collaboration with all ICT-related business associations
will develop a 10-year master plan for promoting country brand including specific actions
related to inclusion of Bangladesh in globally reputed outsourcing/off-shoring index/ranking
list. The Ministry will work with the private sector for developing alternative supply chain and
promote fair price for farmers and consumers. Existing intermediaries and new intermediaries

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will be integrated in the supply chain. E-commerce for farmers will be promoted for direct
trading within country and abroad. Bangladesh Bank in association with commercial banks
and financial institutions will explore potential for introduction of automated teller machine
(ATM), a point-of-sale (POS) device located at a local retail or postal outlets to understand
whether it can be a sustainable and affordable alternative to connect rural farmers to
formal banking system. Remote mobile loan payments will also be initiated using short
message service (SMS), and wireless application protocol (WAP) technologies. The
government agencies will undertake initiatives for introduction of e-trade facilitation for
reducing cost of doing business and create business opportunity for MSMEs
E-commerce is not progressing because
poor network infrastructure
lack of human resources
absence of related rules
Low compute penetration Low
slow and expensive Internet access
Bangla interface lacking
Weak data communication infrastructure
Absence of legal infrastructure
No law against cyber crime
No law of electronic authentication
No electronic certification authority


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Conclusion
Bangladesh needs some urgent measures to stimulate the existing poor economic conditions,
especially in the field of online trading and e-commerce. In this scenario, electronic commerce or
e-commerce remains the best available alternative which cannot only increase our total exports,
but also help us build a long-term virtual foundation of our entire national economy. China is the
best example of this, and can be taken as a role-model to influence local businesses and trading
as well. E-commerce has the potential of resulting in the large productivity gains. In order to
achieve these gains access to e-commerce systems and skilled manpower is needed. However,
what is unique about ecommerce over the Internet and the efficiency gains is that it promises the
result is placed on openness.









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Reference
1. Mohammad Azizul Baten (2010), Journal of Internet Banking and Commerce, August
2010, vol. 15, no.2, E-infrastructure, briefing paper, May 2006.
2. Internet usage statistics, internet world stats.
3. Md. Abdur Rahman, Concept and Architecture of Agricultural e-Commerce for Least
Developed Countries.
4. Mohammed Shahedul Quader, Rubina I. Ahmed (2005), the strategic implication of
electronic commerce for small and medium sized enterprises (sme), BRAC University
Journal, Vol. II, No. 2, 2005, pp. 73-92.
5. Strategic priorites of digital Bangladesh, access to information (A2I) programme