Business in Cy­ber Space

E-com­merce has shown great po­ten­tial to grow in Bangladesh in the last few years.

Southasia - - CONTENTS - By Fa­tima Si­raj

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.

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