Business in Cyber Space
E-commerce has shown great potential to grow in Bangladesh in the last few years.
E-commerce has been growing at a fast pace in Bangladesh.
E-commerce refers to the buying and selling of goods over the internet. Online businesses that come to mind immediately are retail giants like Amazon, ebay and Ali Baba, along with our favorite brands that have online stores. Whether it is a product purchased through the websites of high-end brands like Tiffany and Co. and Victoria’s Secret or everyday items bought from Walmart’s online store, online shopping is gradually becoming more and more of a necessity, as it saves a lot of time and effort. It is also economical in some cases, considering the plethora of discount deals offered by a number of websites.
However, while e-commerce mainly refers to retail, it also includes any kind of inter or intra company business transactions (finance, marketing, communication, etc.) that occur electronically. This greatly broadens the scope of e-commerce – a phenomenon that has become necessary for any business, whether big or small, to survive in today’s constantly changing business environment.
Bangladesh is a country where e-commerce has shown a great potential to grow in the last few years, reflecting its increasing importance. While e-commerce grew by 2.06 percent from 1980 to 2000, it recorded a phenomenal growth of 2.7 percent from 2000 to 2010. This greatly complements the government’s economic policy of export-led growth as importers benefits the most from the growth of the internet which enables them to access global markets. They can compare prices and product offerings and are able to compete effectively in the international markets. Exporters also gain much from e-commerce as it helps in boosting trade. Therefore, it is becoming increasingly vital for private enterprises, especially those in the export sector, to be wellequipped to fulfill the expectations and requirements of importers.
Against this background, two issues are of prime importance for Bangladesh’s export sector: one, whether businesses are becoming efficient in a global context through the automation of businesses processes and two, whether these businesses have enough presence and active participation in the cyber world.
Organizations such as the UNCTAD (United Nations Centre for Trade and Development) and the WTO have, over the years, laid a lot of emphasis on the importance of e-commerce for developing nations. They have developed special programs along with laying down rules and regulations for international e-commerce transactions.
The government of Bangladesh has a vision to make the country digital by 2021 and with this vision in mind it has launched programs to facilitate e-commerce and e-governance in the country. The ministries of Commerce and Information and Communication have been jointly carrying out the implementation of e-commerce in the country to enable businesses to gain from the many advantages associated with it. One of these is increased productivity. With e-commerce, the overall time required to process a transaction between business partners is greatly reduced with reduction in human errors. This improvement in accuracy and speed, along with an easy access to information and records, results in increased productivity. Business processes also become more streamlined. E-commerce ensures better customer service as customers can shop at any time and anywhere in the world from the comfort of their homes.
The advantages and popularity of e-commerce has encouraged many businesses to incorporate it into their existing models and even start new businesses online. Among the many products available online in Bangladesh are sacrificial animals, reflecting the extent to which online retailing has spread in the country with consumers looking for convenience and businesses looking for new opportunities. What started as a concept involving the selling of cows and goats to expatriates, especially during the Eid-ul-Azha season, has now turned into a popular business with many online vendors catering to the local market.
The founder of one such online shop – amardesheshop.com – said that the practice is quickly catching on. "Almost all of our customers are from Dhaka now. Next year we are aiming to sell cows in some other cities as well. I am sure this business is going to boom in Bangladesh in a few years," he said. With around 24 online portals selling sacrificial animals, the lives of those associated with the livestock sector have improved significantly. At amardesheshop and other portals like bikroy, akhoni, and cellbazzar.com, buyers can view pictures of the cows and other information such as their weight, price and sometimes even the name and photo of the farmer who raised the animal.
Despite being a developing country, the booming online sales of cattle in Bangladesh proves that some segments of the Bangladeshi
business community have embraced modern technology with reasonable success. The major events that led to this acceptance and popularization of technology include the arrival of mobile telephones in the 1990s. Among the many indicators that favor the prospects of e-commerce in Bangladesh are the increasing prevalence of web hosting, online gifts and cards, online education, online payment of utility bills, online banking and, of course, online shopping.
However, there still exist significant constraints to e-commerce in Bangladesh, which need to be overcome. Despite the growth in the internet infrastructure, there is still room for more growth as many districts continue to face limited or no internet connectivity. This greatly reduces the number of internet users. Other barriers to e-commerce include the small number of users of credit cards, lack of investment in ICT, lack of technical personnel and the absence of cyber laws, which increases the risk of cyber crime. The online banking infrastructure is also poor in terms of efficiency and speed of inter-bank connectivity. Enterprise managers lack vision and leadership in terms of creatively exploring and capitalizing on the many benefits of e-commerce.
A key reason why e-commerce is growing so rapidly is its significant impact on the reduction of costs associated with sales, inventories, procurement, banking and distribution. Achieving the productivity gains resulting from these reductions depends upon access to e-commerce systems and the relevant skills to operate them. However, the most important factor when considering how to reap advantages from e-commerce is openness.
To fully benefit from the premium that cost savings offer, business firms must be willing to risk opening up their internal systems to suppliers and customers. This raises questions about security and anti-competitive practices as businesses operate more closely with each other. If businesses in Bangladesh wish to compete on a global platform, they must be willing to take these risks and open up a whole new avenue for e-commerce. However, this mindset needs to be accompanied with tangible efforts to improve the internet infrastructure and the training needed to effectively use e-commerce systems.