E- commerce in Bangladesh

PRINT VIEW

AFM Mainul Ahsan IT can be very inconvenient for a consumer not getting a product in his locality when it is available in other places. It happens in Khulna 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 globalisation, the Internet makes the world

smaller and e-commerce facilitates marketing and shopping from home. E-commerce facilitate business with customers over the internet. In e-commerce, customers can buy goods and services over the internet. What needs to be done to start e-commerce? Bangladesh already has trained IT professionals. Its graduates are working with ISPs only for Tk. 4000 (60 dollar!) per month. This shows that 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. According to International Telecommunication Union (ITU) report, Bangladesh had 450,000 internet users in 2007. In October 20, 2008, number of mobile phone users in Bangladesh stood at 45.09 million. More than 10,000 people are connected in Face book through

Bangladesh channels. All the districts headquarters have 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 ecommerce law. It should work in collaboration with the private sector to ensure a stable and reliable internet connection. E-commerce facilitates payment of utility bills, fees etc.
Introduction
Many Bangladeshi companies currently distribute their images through the Internet to clients all over the world, but the monetary transactions take place through conventional

means. Some companies put messages on bulletin board, on ' internet yellow pages' with email links, and sometimes web pages, but there never is a place to submit a credit card. This is because currently the government does not permit credit card charges over the internet. However, the ISPs in Bangladesh do have the technology for e-commerce, and are anticipating governmental approval within the next year (12).

E-commerce sites needed too be hooked up to a merchant bank account. A merchant bank account allows a company to accept and process credit card transactions. All businesses that use electronic credit cards need to be hooked up to their merchant account. For example, in a grocery store, when one swipes a card through the card swipe machine, machine is hooked up to the grocery store's merchant account. Page Index | Site Index

Banking on the Web: Not Today!

Though there are 28 banks in bangladesh, mostly head quartered in Dhaka (7).(, only a select few have web pages. Listed below are the names of the few that do have sites. However, most of these banks do not offer online or electronic service such as Direct Deposit. There are some ATM machines, though not nearly as concentrated as in the United States. Arab Bangladesh Bank Ltd. The first private bank of Bangladesh with a long standing experience in domestic and international banking. Its 53 branches in all the major commercial centers of the country and 152 correspondents worldwide provide proficient banking services to its customers (1). Grameen Bank This bank provides no on line transactions, but has the best web site of all the banks in Bangladesh (4). Standard Chartered Bank Worldwide bank, with some services available for customers living in Bangladesh: Current Accounts, Overdrafts, Foreign Currency Term Deposits, Local Currency Cash Checks, Check Purchase, Drafts, Savings Accounts, Term Deposits, Telegraphic Transfers, Traveler's Checks, and Personal Loans (5).

ANZ Grindlays Bank Limited Grindlays is the oldest bank in Bangladesh dating back to 1905 when one of its forebears, the National Bank of India, opened a branch in Chittagong. Today, there are 10 branches of ANZ Grindlays Bank and 4 cash offices in Dhaka, Chittagong, Khulna and Narayanganj (6). National Bank Ltd This is the governmentally run bank. It had a site but it was taken off due to non payment of web development bill. Page Index | Site Index

GIIC MEMBERSHIP
Asia is the fastest growing regional market in the world for information and communications services. The first GIIC Regional Meeting brought together senior government officials from 20 Asian economies, including Bangladesh, private sector business leaders, regional organizations, academics and technical experts to share experiences, and review best practices to help develop an information infrastructure to promote economic and social development in the region. The conference focused on the use of telecom and IT in health care and telemedicine, education and human resources development and the management of government services. Bangladesh has accepted the obligations of Article VIII of IMF Articles of Agreement which means removal of all restrictions on making payments and transfers for current international transactions. By accepting these obligations, Bangladesh has given a clear signal to the international community that it would pursue sound economic policies, and thereby create a congenial climate for investment (8). Because of this potential influx of investment, one can only conclude that electronic payment systems are only a short breath away from becoming part of the Bengali way. Page Index | Site Index

NGOs ARE ON THE WEB

Ikota Forum in Bangladesh is an NGO that represents 14 producer organizations that represent 75,000 women. They have a web site produced entirely in Bangladesh. The site shows many of the products, all of which were made by very poor people in remote rural

settings in Bangladesh. Page Index | Site Index

E-COMPONENTS: POWER, HARDWARE, COMMUNICATION (10)

BANGLADESH'S PUBLIC POWER SECTOR IS INADEQUATE Overloading and lack of maintenace cause frequent outages and necessary planned blackouts. How can a country like this be able to provide E-commerce, when the main component, "e," is never there! THE GOVERNMENT HAS SIGNED 3 AGREEMENTS Bangladesh began to purchase power in 1998 from private companies in the U.S. The country has significant natural gas reserves, but the inadequate gas transmission system, as well as electricity transmission system, is a bottleneck to growth in this area. The gas company has signed exploration and development agreements and aid is coming in from the ADB and World Bank. A new major gas pipeline built in 1997 could also mean a end to some of the power problems. In addition, transformers, wood poles, insulators, surge protectors, line tools and other parts needed for the electricity transmission system are being brought into the country.

THE MARKET FOR COMPUTER HARDWARE, PERIPHERALS IS INCREASING AT A 15%-20% There are approximately 90,000 desktop PCs in Bangladesh. In 1998, the duties on imports were eliminated, decreasing prices 30-40% and increasing sales. Thus, hardware needed for e-commerce is coming in headstrong. THE COUNTRY'S TELECOMMUNICATIONS SERVICES ARE INADEQUATE. 60% of the lines are analog, and the quality of the service is poor; there is a 30% connectivity rate. EFFORTS ARE SLOWLY UNDER WAY TO UPGRADE There are plans for expansion of the domestic and international capacity. A Japanese firm is completing the installation of 67,000 digital lines in Dhaka, with more on the way. Private companies were allowed to enter the market as of 1997, and email and ISP providers are now available in Dakar. BTTB has proposed other upgrades, such as fiber optics, but there is a budget constraining this idea. 70,000 telephone lines have been installed in rural bangladesh, most of which are cellular. The Jamuni Bridge, built in 1998, connects east and west Bangladesh for the first time ever. It hosts communication cables so that e-commerce may one day live in

Bangladesh. Page Index | Site Index

1999 OBSERVATIONS
Ive personally seen about 20 Internet sites whose hosts are located in Bangladesh. The big ones are Bangla.net and Banladeshonline.com. Some services include internet access, internet fax, network setup, web page design, and hosting. Many of these ISPs also provide other computer services, such as CD-ROM development.

At http://www.citechco.net, there are several items, such as the I-mac, that I can almost buy. The site has a "buy now" button, but no link with that button that takes me to a page where I can enter my credit card information. Many companies have web sites where they market a product, but to purchase it you have to actually come into the store or mail in a check. This is because of the government's current restriction on e-commerce, which is expected to be resolved soon. One thing that is interesting to note: Several sites, such as eDhaka.com, the "Bangladeshi Supermarket" present themselves so that one thinks the host is in Bangladesh. However, they only take U.S. Dollars, and can only ship to the United States (9). They do sell over the internet, but not from Bangladesh! Page Index | Site Index

Hotels

Hotels that allow for internet booking are worldwide chains, thus the whole transaction occurs outside of Bangladesh, despite the fact that the service will be performed in Bangladesh. At Pacific Hotel, subsidy of Pan Pacific, an person can make reservations through a secure server that is protected by an independently certified Secure Certificate. So that a browser can verify such certificates, the browser contains details within its preferences of the various Certifying Authorities. These details are known as Root Certificates and for security they all have expire dates. The hotel's

Certifying Authority is Thawte Certification, whose Root Certificate in Netscape 3 expired on 27 July 1998. In order for Netscape 3 to connect to the hotel's secure server (and the estimated 20% of all secure servers using Thawte certificates), a user needs to go through a "rollover" process outlined at http://www.thawte.com/certs/server/rollover.html. When the procedure is complete, the user can then return to the Pan Pacific reservation page.

Future of e-commerce in Bangladesh

Nazmul Hasan Darashiko Competitive advantages determine whether a company can move forward. E-commerce is the right tool for gaining competitive advantage nowadays. Business now goes online. Some restrict the definition of e-commerce only to internet enabled transactions while some others defined broadly saying not only internet rather telecommunication and telecommunication based tools are also involved in ecommerce activities. In Bangladesh perspective, the broader definition is accepted to all. Like traditional commerce, e-commerce does not involved only in buying and selling of goods and services rather includes inter-company and intra-company functions like negotiations and transactions, manufacturing and marketing etc. using email, Electronic Data Interchange (EDI), fax, file transfer, video conferencing etc. Depending on the involvement with electronic means, a company can be either a complete or partial e-commerce user. Usually e-commerce is done in four forms: Business to Business (B2B), Business to Consumer (B2C), Consumer to Business (C2B) and Consumer to consumer (C2C). However, Business to Government (B2G) transaction may also exist. Present situation in Bangladesh In the year 1997, private Internet Service Providers (ISP) launched Internet in Bangladesh. Since then, the infrastructural development in the sector of telecommunication has helped spread the Internet network around the country. Right now more than 6.5 million people are using Internet in the country with the help of around 200 registered ISPs and dial-up services and the cost of using Internet is low. The increasing number of user of Internet creates more opportunity of e-commerce in the recent years. In order to cope with the present world, almost all of the financial organisations and international businesses in Bangladesh enter in the information highway through hosting website. Banks and other financial organizations have started online transactions like fund transfer, payment etc. However, almost 82 percent usage of Internet accounts for only to send e-mail while in developed countries like USA, it is only 5 percent or less. This indicates that ecommerce in Bangladesh lags far behind.

Human resource is must for the development of e-commerce and in Bangladesh, around 10000 people are being produced by the educational institutions and training centres around the country, which is not adequate for a country. Since Bangladesh is a developing nation, the opportunity for the development of local and international trade and business, like all other LDCs, is increasing. Although it faces some barriers like infrastructural, cultural and outlook problem, recent steps taken by the government may change the situation. The government has taken some steps to build ICT capable society recently to materialize its dream of a 'digital Bangladesh'. Constraints to e-commerce The number of Internet users is not adequate to create potential profit earning e-business; there is lack of infrastructural facilities including electricity and transportation system; high and unstable prices of computer and hardware is discouraging, there is lack of skilled manpower and personnel required for effective e-business; there is absence of cyber law and lack of governmental legislation and awareness. Ensuring bright future needs right efforts In the first week of last November 2009, Bangladesh Bank asked all the commercial banks through a circular to use online payments system. The intention is good to facilitate fund transfer, utility bill payments and credit card usage in local currency. But the local IT giants and banking counterparts think that the step is taken much earlier because at least two thirds of the bank branches around the country are not ready to comply with the instructions. This indicates that Bangladesh is yet to get ready for full utilization of its high potential. If Bangladesh wants to do e-commerce competing with the developed world, it should ensure some vital supports. Using all the features of e-commerce will create huge traffic on the Internet that would require high technical support. Huge investment is necessary in the ICT sectors to spread the facility around the country on an equity basis. Along with the infrastructural development, human resource development is a must. All these should be controlled through ensuring a legal and regulating environment. All the efforts should be taken at a time as they all are dependent on each other. Telecommunication: It's the integral part of e-commerce. Although mobile phones are very common here, the percentage is still very low, only 0.83 out of 100 has got a phone. This indicates poor level of penetration. Reducing the cost of using phones and developing the infrastructural support is necessary to fulfill the future demand. Although all commercial banks have started following automation system, online banking system

through ATM, local credit cards and EFT is available in the selected area only. (Islam, 2005) Internationally accepted credit cards are not available due to the lack of facilities. It creates inability to do business with the foreign businesses easily. Along with this exists illegal mode of payments called Hundi based on basic transfer system. So, banks and financial organizations are facing barrier at the same time. Skilled human resource: Skilled manpower is needed to utilize the available technology and infrastructures. Bangladesh lacks manpower and it is affecting the potentials because the public officials are not aware of the use and high potential of e-commerce. Technical education should be included at all levels while English efficiency, both verbal and written, should be increased. Skilled resource should be involved in developing user friendly international standard software. Internet is mainly used for gathering and sharing information. A good segment of the users uses Internet for entertainment. However, entertainment business based on Internet is not available in Bangladesh till now. Web radio and TV may offer a new way for delivering services to the customers. Recently, Internet radio is available but they are not familiar to the masses and thus lose the opportunity to do business. Online education and healthcare service is yet to start. Very few sites on personal initiative on health and medical services are available but they are not up to the mark. Online education can do well using electronic means but lack of necessary infrastructures is hindering the process. It should be understood that only Internet connection is not adequate for the development of ecommerce. Internet is nothing but a component of the environment. The environment should be developed wholly. Various researches find out that people in Bangladesh are friendly to technical innovation. In order to improve the standard of life the people here can adopt the e-commerce system easily.