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Is the E-Commerce Growth in Bangladesh Worth Celebrating?

LightCastle Analytics Wing

Is the E-Commerce Growth in Bangladesh Worth Celebrating?

The COVID-19 pandemic has reshaped the business landscape concocting harsh ripples across industries. On the contrary, the reality has been different for the e-commerce industry, as it witnessed enhanced dynamism during the crisis. With worldwide restrictions being imposed to curb infections, people limited their outside exposure even for daily necessities, which turned out to be a blessing in disguise for the e-commerce industry. Fuelled by the pandemic, the share of e-commerce in global retail sales increased to 17% from 14% in 2020. [1] Things look promising for Bangladesh, too, as the consumer behavior shifted rapidly during this time. Facebook has over 2,000 eCommerce sites and over 50,000 eCommerce pages, making it a popular platform for advertising and selling things. The sector has seen strong growth in previous years, but after the emergence of the COVID-19 pandemic in 2020, growth has increased as more consumers are inclined to shop online. According to Statista, the industry expects to grow from $1.6 billion in 2019 to around $2 billion in 2020 and $3 billion in 2023. However, even with such promising growth, the real concern is whether the numbers are sustainable to carry forward into the future and provide enough incentive for innovation.

Current Market Condition

From the early 2010s, the e-commerce industry of Bangladesh took off, particularly with the introduction of online banking from Bangladesh Bank. Later, after further relaxation of restrictions on usage of credit cards for international purchases, the sector is now growing faster than ever. With a 9.3% annual growth in revenue and a 72% annual growth in market size, the industry is set to reach greater heights in no time. [2] Daraz, one of the largest market shareholders in the e-commerce of Bangladesh, is a perfect representation of the industry’s growth. In the past four years alone, the company went from dispatching 500 parcels daily to 120,000 parcels in a single day. In recent times, new startups are popping up in different market segments, drawn by greater aggregate demand. The likes of Chaldal, the leader in the e-grocery segment, and ShopUp, a startup enabling SMEs to go online, are spearheading innovation in the e-commerce industry. [3] The growth potential is drawing a large volume of foreign direct investment as well. In 2018, Chinese giant Alibaba Group acquired Daraz, which worked as a gamechanger for the market leader. Currently, e-commerce is the third-highest funded sector in terms of startup investments. [5]

The macroeconomic consumer behavior following the post-pandemic has also significantly been reliant on e-commerce. While 59 commercial banks in Bangladesh only account for 60% of the total population, the introduction of Agent Banking and Mobile Financial Services (MFS) has been dramatically successful to cater to the remaining 40% of the unbanked population. The recent initiatives to manufacture smartphones locally and make 4G more accessible across the country have further accelerated digital inclusion for e-commerce across the country.

Impact of COVID-19 in Various E-Commerce Service and Goods (In percentage)_LightCastle

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Impact of covid-19 on e-commerce growth in bangladesh.

The turning point for the e-commerce sector has been induced by the dramatic shift in consumer behavior since the coronavirus outbreak. The pandemic has forced people to shop online, which effectively removed the consumer hesitancy for e-commerce. On the other hand, the pandemic has led to a higher tendency to save, acting as a counterweight keeping the growth leashed. Personal savings across the country increased up to 11% from 2019, cutting down pre-pandemic spending across entertainment and leisure activities. [17] Nonetheless, Bangladesh still has substantial e-commerce growth to show going into the second year of the pandemic. The following figure summarizes the impact of Covid-19 on e-commerce goods and services of developing countries, according to the United Nations Conference on Trade and Development (UNCTAD).

In terms of categories, agro-food and beverages have seen the steepest rise in terms of sales. After that, we can see a significant increase in the usage of financial services, pharmaceutical products, and food delivery. On the contrary, fashion and apparel product sales have gone down during this time, according to UNCTAD. [6]

Global Outlook

Although the Bangladeshi e-commerce market has registered substantial growth recently, it is still not at par with global development. Despite the shift during the pandemic, Bangladesh slipped to 115th in 2020 in the worldwide e-commerce index ranking by UNCTAD. [6] The index considers factors like internet and postal reliability to measure the readiness of an industry to adopt e-commerce. Compared to the global engine, Bangladesh’s faltering performance raises the concern on whether we are on the right track.

The infrastructural limitations account for the undesired slip in the climb. As mentioned earlier, the country’s under-developed payment infrastructure is a barrier to the sector’s forward momentum. This has led to the popularity of the cash-on-delivery model in Bangladesh, as 90% of customers are more comfortable with this method. [7] However, this is not taken into consideration for the UNCTAD index. As a result, the e-commerce readiness of Bangladesh might be underestimated by this measure.

Bangladesh’s Position in UNCTAD B2C E-Commerce Index_LightCastle

A Step Back With Evaly

From the height of its inception, Evaly has been a household name in the e-commerce market of Bangladesh with lucrative deals from 50% to up to 100% cashback. With such massive discounts, gift cards and offers, the catch as Evaly pointed out was longer than usual deliveries, about 45 days officially. However, it was later revealed that there was more to it behind the closed doors. From several complaints of the customers, most of the delivery delays stretched for over months, the refunds were often provided through post-dated cheques, which had to be rectified over even longer periods. After a staggering number of complaints from both merchants and customers, it was established that Evaly was indeed running a Ponzi scheme.

Ponzi Schemes are fraudulent investing scams where high returns are promised with very little risk. In reality, it works by generating the supposed returns to the earlier investors/customers with money received from later customers. At one point the lucrative deals with 100-150% cashback created a staggering difference between Evaly’s assets and liabilities. [12] According to a report by Bangladesh Bank, Evaly boasted Tk 4.04 billion of liabilities to its customers and merchants while having only Tk 651.7 million in their current assets. [12]

All of this resulted in a general distrust among the consumers. While lucrative offers from sites such as Evaly, Dhamaka, and E-orange (all running some form of Ponzi schemes) attracted temporary customers, this allowed a drop in sales for the regular e-commerce platforms such as Ajkerdeal. The burgeoning customers hence now have a skewed perception, regarding the reliability of these e-commerce companies. [13]

Challenges and the Way Forward

Despite the promising panorama offered by the e-commerce industry, many barriers stand in its way. Factors such as unregulated markets coupled with infrastructural hindrances make the economy a tough terrain for e-commerce businesses. Below, we discuss some pain points for the industry followed by the way forward from the challenges:

High Population Density: For e-commerce businesses with central warehouses, operating in densely populated areas is a massive challenge. The country’s capital city is infamous for hosting the world’s worst traffic. According to the World Bank, the average traffic speed in Dhaka is 7 km/ph which is just over the average walking speed. [8] In such difficult terrain, delivering goods as promised is incredibly challenging. To overcome these problems, startups are coming up with disruptive models such as Chaldal’s MicroWarehouse approach. Instead of a centralized warehouse, they are capitalizing on many small warehouses spread across the city to enhance customer experience.

Demand Imbalance: Although the aggregate demand for e-commerce is on the rise, there is a large disparity in terms of locations. The growth of e-commerce businesses has mostly been limited to the urban areas, whereas semi-urban and rural areas have been virtually overlooked. According to e-CAB, 80% of online shoppers are from Dhaka, Chattogram, and Gazipur. [9] This imbalance indicates the presence of untapped opportunities to capture across the country. However, due to infrastructural limitations, the market players are not being able to capitalize on them.

Newly Enforced Regulations: According to the Commerce Minister, the e-commerce sector would undergo future regulations to monitor the industry after the recent fraudulent incidents. According to the recent meeting discussing the e-commerce industry and its revised policy, there is an established urgency of creating a legal framework through a separate regulatory body and central complaint cell to ensure reliability and accountability. Existing laws including the Digital Security Act and Money Laundering Act would also be amended against fraudulent e-commerce platforms. [14]

Payment Issues: The country’s low financial inclusion is a threat to the retail e-commerce industry. Due to low credit card penetration, cash-on-delivery is preferred by most. However, many online vendors are not inclined to offer cash-on-delivery to customers outside Dhaka. As a result, the imbalance portrayed earlier condenses. However, the rise of MFS has brought some stability in the financial ecosystem in Bangladesh, which has hitherto been a clumsy arena. During the pandemic, Mobile Financial Services (MFS) adoption in Bangladesh has risen to extraordinary levels to support transactions that require digital payments. Spearheaded by BKash, the MFS sector in Bangladesh is showing a way around the financial inclusion challenge to the e-commerce industry.

MFS Transaction Volume in Bangladesh _LightCastle

Global e-commerce has displayed tremendous resilience amid the major upheavals around the world due to the pandemic. Fuelled by some major shifts in consumer behavior, the industry swelled manifold. The Bangladeshi industry has somewhat followed the same path registering healthy growth amidst the crisis. However, Bangladesh is not in a position to afford complacency as the industry is still riddled with problems on many fronts. As long as this difficult terrain for e-commerce businesses continues to face these issues, keeping the excitement at subsistent levels looks like the wiser choice.

Faiyaz Uddin Ayeshik , Content Writer , and Kaishary Islam, Content Writer, at LightCastle Partners, have prepared the write-up . For further clarifications, please reach out to: [email protected]

1. How COVID-19 triggered the digital and e-commerce turning point – UNCTAD
2. Impact of COVID- 19 on E-commerce Industry of Bangladesh – NewVision
3. Digital 2020: Bangladesh – DataReportal
4. E-Commerce Business Scenario in Bangladesh – Brain Station
5. Bangladesh Startup Ecosystem: Funding Landscape – LightCastle Partners
6. The UNCTAD B2C E-Commerce Index – UNCTAD
7. Bangladesh – Country Commercial Guide – International Trade Administration
8. Traffic jam: The ugly side of Dhaka’s development – The Daily Star
9. The growth of e-commerce during the pandemic in Bangladesh – The New Age
10. COVID-19 and E-commerce: Impact on Businesses and Policy Response – UNCTAD
11. COVID-19 and e-commerce: impact on businesses and policy responses – UNCTAD
12. Is Evaly a Ponzi scheme? – Dhaka Tribune
13. How Evaly, Dhamaka, Eorange hurt the e-commerce sector – Dhaka Tribune
14. E-commerce to get separate regulatory body – Dhaka Tribune
15. Bangladesh – Country Commercial Guide – International Trade Administration
16. Statista E-commerce Bangladesh – Statista
17. Bangladesh Personal Savings – Trading Economics

WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a data-driven approach to create opportunities for growth and impact. We consult and collaborate with development partners, the public sector, and private organizations to promote inclusive economic growth that positively changes the lives of people at scale. Being a data-driven and transparent organization, we believe in democratizing knowledge and information among the stakeholders of the economy to drive inclusive growth.

For further clarifications, contact here: [email protected]

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A Report on Legal Aspects of E-commerce in Bangladesh

by Udit Deb Chowdhury

The Internet has opened up a new horizon for trade and commerce, namely electronic Commerce (e-commerce). E-commerce entails the use of the Internet in the marketing, Identification, payment and delivery of goods and services. This paper highlights the status, Potential and constraints to e-commerce development in Bangladesh. Both the Statutory laws as well as the challenges in implementing them are discussed. Major legal, Regulatory and institutional constraints to e-commerce are identified. The paper also lists Specific policy changes aimed at bringing improvements to the legal and regulatory environment affecting e-commerce.

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Key Market Demographic

Currently, the following four types of eCommerce are popular in Bangladesh:

Business-to-Consumer (B2C)
Consumer-to-Consumer (C2C)
Business-to-Business (B2B)
Business-to-Employees (B2E)

In order to facilitate eCommerce and encourage the growth of information technology, the Bangladeshis enacted the Information and Communication Technology (ICT) Act of 2006. The Act, amended in 2013, included provisions for imprisonment and/or fines for cyber-crimes. The enactment of the Act has had significant implications for e-commerce and mobile commerce users and companies in Bangladesh. The growth of the industry has been inhibited by low usage of credit and debit cards (cash remains the major payment method) and the unavailability of or restrictions on major online transaction sites such as PayPal.

The Government of Bangladesh withdrew the 49 percent maximum allowable shareholding limit on foreign E-commerce companies in June 2020, allowing 100 percent foreign-owned companies to operate in Bangladesh. COVID-19 social distancing measures significantly boosted demand for eCommerce services and led many brick and mortar businesses to join online sales platforms.

Domestic eCommerce (B2C)

B2C websites have become popular in large urban areas, as evidenced by the growth of online food delivery sites such as HungryNaki and FoodPanda. Highly congested roads and poor driving conditions have also helped drive demand for home delivery services. Other examples of B2C initiatives include Facebook-based commerce platforms such as Shoprbd and ShoptoBd, which allow Bangladeshi customers to purchase products from leading online shopping sites in the United States, the UK, India, and China.

C2C businesses are also growing. The leading players in this category include Bikroy, Ekhanei, and ClickBd. More recently, the C2C sector has seen some consolidation with Telenor Group purchasing CellBazar and Ekhanei.com purchasing playeOLX. Online employee recruitment is also growing, largely in the private sector. Leading online job advertisers and recruiters include: bdjobs.com, prothom-alojobs.com, and jobsA1.com.

B2B eCommerce

Several B2B websites in Bangladesh are engaged in providing manufacturing and supply-chain solutions. For instance, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has deployed B2B e-commerce solutions for international ready-made garment (RMG) orders and procurement, as have several large ready-made garment companies. There are also B2B websites that feature business directories, trade deals, and information about suppliers such as the Bangladesh Business Guide , Address Bazar, and Bizbangladesh.

Cross-Border eCommerce

Cross-border eCommerce remains largely inhibited by a viable online transaction system and capital controls that prevent most outward flows of foreign currency for consumer purposes. In addition, weak logistics infrastructure and irregular customs practices hinder the growth of cross-border eCommerce. However, leading logistics provider DHL publicly announced plans to invest in cross-border eCommerce in the future.

Challenges to eCommerce in Bangladesh include:

Inadequate delivery mechanisms;
A relatively low internet penetration rate;
The lack of a robust online transaction system;
Prevalence of online fraud;
Undeveloped online marketing practices; and
The lack of a robust privacy policy.

The growing mobile financial services (MFS) industry has enabled consumers to buy products online more easily, giving the e-commerce sector a boost. The market is expected to triple in size by 2023, according to a report by the Asian Development Bank (ADB) on the cottage, micro, small, and medium enterprise (CMSME) sector. At present, there are about 2,500 e-commerce companies in the country and at least 50,000 business pages on Facebook.

The fast rate of internet adoption, improvement in logistics communication, and continuous improvement in online banking and mobile financial services (MFS) have played a crucial role in the growth of the e-commerce sector. Also, the rise in the tech-adaptable young population (over 50 per cent of the population are under 35 years) and the increasing rate of middle and affluent class (MAC) populations (10 per cent per year) has fueled the growth of this sector. The evolution of e-commerce in Bangladesh is concentrated to the capital city and the online shopping is mostly preferred by young consumers who are educated above higher secondary sschool. Many women and young entrepreneurs are becoming self-reliant through trading their products on Facebook..

Many Bangladeshi companies engage in eCommerce services, including web design, domain name purchasing, secure hosting, digital marketing and advertising, app development, in-home services, and payment gateways, among others. A number of these companies provide services to clients abroad, especially in North America. According to a 2017 study by the Oxford Internet Institute (OII), with nearly 500,000 active freelancers, Bangladesh was the second-largest supplier of online labor after India. Remitting payments from abroad into Bangladesh is generally not an issue. U.S.-based Payoneer is a leading site for processing online payments among freelancers in Bangladesh.

Online Payment

Cash transactions are still the predominant financial transaction method for the majority of the population. According to research by the e-Commerce Association of Bangladesh (e-CAB), more than 90 percent of eCommerce users in Bangladesh prefer the cash-on-delivery payment model. Most eCommerce business portals in Bangladesh have integrated merchant accounts to facilitate credit card transactions. However, almost all eCommerce websites also offer multiple other payment methods and still cater to the consumer preferred cash-on-delivery system. Very few eCommerce businesses operate on the system of only delivering the product after receiving payment through a wire/bank transfer.

Online payment remains limited but is growing in Bangladesh as a result of an increase in internet/mobile cell phone penetration, gridlocked traffic which discourages in-person shopping, and growing per-capita income levels. Since 2011, there have been important developments in financial transaction regulation (mobile payments, digital wallets, and smart cards) as well as transaction infrastructure (e.g., electronic funds transfer payment gateways). The creation of the Bangladesh Electronic Funds Transfer Network (BEFTN) is a step toward developing a modern payment system infrastructure. This has created expanded business avenues for financial institutions as well as entrepreneurs to offer electronic or mobile payment processing services to the unbanked population. This area of electronic payment processing services has already attracted local and foreign investment. Investment areas for non-bank entrepreneurs cluster in the areas of solution development and operations for payment intermediary services, direct service delivery models in partnership with banks, and development of value-added financial applications.

The National Payment Switch Bangladesh (NPSB) is an electronic platform that started in December 2012 to attain interoperability among scheduled banks for card-based/online retail transactions. At present, NPSB is processing interbank Automated Teller Machines (ATM), Point of Sales (POS), and Internet Banking Fund Transfer (IBFT) transactions. U.S. companies operating in financial services and the financial payment network sphere (such as VISA and MasterCard) have expressed concerns about operating in the Bangladeshi market after the central bank made a mandatory policy of routing all card transactions through the NPSB. This mandatory policy eliminates competition and involves security risks, and NPSB becomes a single point of failure if it ever crashes.

Mobile eCommerce

In a 2017 report, e-Cab said Bangladesh has 99 percent geographical coverage in voice and data connectivity. The Bangladesh Telecommunication Regulatory Commission (BTRC) puts total internet subscribers at 117.3 million as of May 2021, of which only 9.8 million use broadband connections while the rest are mobile internet users.

Utility bill payment and remittance transfers via mobile phone were introduced in Bangladesh in 2006 and 2010 respectively through the country’s leading mobile operators and banks, and have become very popular. The government also authorized mobile operators to sell railway and bus tickets, and tickets to cricket matches organized by the Bangladesh Cricket Board using mobile phones.

As of April 2021, 15 banks are providing mobile financial services (MFS), with 36.75 million active MFS accounts. In addition, Prime Minister Sheikh Hasina inaugurated digital financial service, “Nagad” in 2019, which is partly owned by the Bangladesh Post Office. Mobile financial services in Bangladesh include cash-in, cash-out, merchant payments, utility payments, salary disbursement, foreign remittances, and fund transfers. MFS activities grew rapidly following the outbreak of COVID-19 in 2020, as consumers sought to use MFS platforms to comply with social distancing measures. Bangladesh’s central bank instructed banks in April 2020 to open MFS accounts for all workers of export-oriented companies to facilitate disbursement of salaries and government allowances.

Existing mobile financial service providers popular in the market include bKash, Nagad, Rocket, and UCash.

Legal & Regulatory Environment

The country’s e-commerce sector witnessed a rough ride in 2021 as the sector had boomed in the first half of the year before the business suffered a serious setback due to scams by a number of e-commerce companies, shattering the public trust in the firms. The scam-hit entities’ failure to repay clients’ money and closure of operations prompted government intervention to streamline the sector.

Consumer Behavior

Many Bangladeshi customers prefer to pay in cash on delivery to ensure they are receiving the product promised. Shoppers tend to buy more in the major Muslim holidays of Ramadan, Eid ul-Fitr, and Eid-ul-Adha. Hindu, Buddhist, and Christian Holidays, including Buddhist New Year, Durga Puja, and Christmas, respectively, are also observed by segments of the population. Other major Bangladeshi holidays include Bengali New Year (April 14), Independence Day (March 26), and Victory Day (December 16). Some of these holidays are based on a religious calendar and specific dates depend on lunar sightings.

eCommerce Intellectual Property Rights

The present system of trademark protection lacks a sufficient legal framework to protect intellectual property rights and opens the way for those ready to engage in unscrupulous business practices.

Digital Marketing and Social Media

With strong growth in the number of mobile internet subscribers and growing digital infrastructure, more companies in Bangladesh are investing in digital marketing. While traditional media remains strong among older persons, digital media is more popular among younger segments of the population. Fund allocation toward digital marketing remains modest at 5 to 10 percent across companies, but as conversion continues, this statistic is set to change drastically. Digital media has specifically become a strong tool for small and medium enterprises in strengthening their brand recognition. Restaurants, fashion stores, gadget shops, and lifestyle pages increasingly use digital marketing.

Content development and digital media marketing are the most popular services that digital agencies currently offer. Online advertising is also slowly expanding as video platforms mature. Digital analytics is still in the development stages in Bangladesh and not yet widely used by businesses.

Social media is widely used in Bangladesh. Facebook is the most prevalent of social media platforms with more than 30 million users. Facebook is used to engage consumers and is also a major e-Commerce platform. There are over 50,000 eCommerce Facebook pages in Bangladesh, many of which are small businesses using Facebook alone to advertise and sell products, ranging from clothes, to beauty products, to food. With faster internet connections, Google cache servers, and better streaming, YouTube is also gaining popularity in Bangladesh.

The popular service providers are:

Electronic Banking in Bangladesh

In this age of information technology, electronic communication is the cornerstone of a country for its business, every government agency and economy. Modern banks play a pivotal role in promoting economic advancement of a country. Electronic banking is a modern banking system that delivers the new and traditional banking products and services to the customers electronically. Electronic banking systems allow business parties or individual to pay directly or to debit accounts via telecommunication systems. It provides users, working with a home computer attached by network to their bank, with the ability to authorize payments, reconcile accounts, and access a variety of other banking services with the help of ATM (Automated Teller machine), visa card, master card, Q-cash, E-cash, Ready cash, mobile, internet etc. This paper represents the scenario of electronic banking in Bangladesh how it is up surging, makes our country with more state of the art facilities and also highlights some drawbacks and recommendations of overcoming the drawbacks of electronic banking.

In Bangladesh, the expansion of e-banking is beset with several infrastructural, institutional, and regulatory constraints such as inadequate availability of reliable and secure telecommunication infrastructure, absence of a backbone network connecting the whole country, poor ICT penetration in the banking sector, lack of skilled manpower and training facilities, absence of supportive policies, guidelines, rules and regulations relating to e-transactions and the like. Despite the constraints, efforts by the Bangladesh Bank in modernizing the country’s payment system and commitment by the government in building ‘Digital Bangladesh’ have brought competition among the scheduled banks to improve banking services and rapidly adopt e-banking on a wider scale. This note provides a critical overview on development of e-banking in Bangladesh and future prospects for better understanding the issue that includes concept of e-banking, present status of scheduled banks in adopting e-banking services, and prospects of e-banking in Bangladesh on the basis of current trend in developing the ICT infrastructure in the country as well as ICT penetration in the banking sector that follows some policy suggestions for BB, Govt. of Bangladesh and scheduled banks so that optimum benefit through e-banking may be obtained.

Introduction

Despite huge demand from the business community as well as the retail customers particularly the urban customers, electronic banking (e-banking) in Bangladesh is still at a budding state due mainly to a number of constraints such as unavailability of a backbone network connecting the whole country; inadequacy of reliable and secure information infrastructure especially telecommunication infrastructure; sluggish ICT penetration in banking sector; insufficient legal and regulatory support for adopting e-banking and so on.1 In Bangladesh, telephone connectivity is inadequate, cost of PCs are still beyond purchasing capacity of most people, internet connection is costly, IT literacy is yet to reach satisfactory level, banking sector lacks skilled IT personnel, and huge investment requirement for establishing technology based banking services are prime drawbacks. In this backdrop, with high potential of e-banking, Bangladesh Bank as the regulator of banking and financial sector, government of Bangladesh, and the scheduled banks together need to come forward with necessary initiatives for successful introduction of e-banking in Bangladesh.

The concept of e-banking includes all types of banking activities performed through electronic networks. It is the most recent delivery channel of banking services which is used for both business-to-business (B2B) and business-to-customer (B2C) transactions. However, in true sense, e-banking includes activities like payment of bills and invoices, transfer of funds between accounts, applying for a loan, payment of loan installments, sending funds to third parties via emails or internet connections regardless of where the client is located. The definition of e-banking varies amongst researchers partially because electronic banking refers to several types of services through which a bank customer can request information and carry out most retail banking services via computer, television or mobile phone (Daniel 1999; Molls 1998; Sathye 1999). On the other hand, Burr (1996) describes e-banking as an electronic connection between the bank and customer in order to prepare, manage and control financial transactions. In brief, e-banking is not a banking product or service; rather it explains the way transactions are conducted. Leow, Hock Bee (1999) state that the terms PC banking, online banking, Internet banking, telephone banking or mobile banking refers to a number of ways in which customer can access their banks without having to be physically present at the bank branch. Therefore, e-banking covers all these ways of banking business electronically.

Since e-banking offers some smart services benefiting both banks and customers compared with traditional banking system, it has become imperative to make necessary room for the scheduled banks to flourish e- banking. Among others, attractiveness of e-banking includes: it lowers transaction cost; provide 24-hour services; ensure increased security and control over transactions; reduces fraud risk; performs higher volume of transactions with less time; increases number and volume of value payment through banks; allows remote transactions facilities that replace physical presence of a customer in a bank branch and; increases transaction speed and accuracy. On the other hand, traditional banking is time-consuming and more costly and therefore, e-banking is replacing traditional banking all over the world. In Bangladesh, e-banking facilities are yet to be fully developed although some technology driven products and services have been in operation over the last few years. The existing technology driven products and services offered by the traditional banks are ATM services, debit card and credit card, transactions through POS terminals, inter-branch online transactions through individualized online closed network of individual bank, limited customer services provided through internet and membership of SWIFT allowing scheduled banks to conduct wireless transactions especially e-transactions.2 All these technology based products and services have obviously unlocked the way to step toward e-banking. Moreover, as a part of modernizing national payment and settlement system, Bangladesh Automated Clearing House (BACH) that includes Bangladesh Automated Cheque Processing System (BACPS), and Bangladesh Electronic Fund Transfer Network (BEFTN), is being implemented under the “Remittance and Payments Partnership” (RPP) project of the Bangladesh Bank funded by DFID-UK is expected to speed up the adoption of e-banking as well.

In this context, it is important to recognize that the present state of technology based banking in Bangladesh permits the banks to perform B2C transactions only whereas B2B transactions are yet to be established. Successful implementation of e-banking will help to conduct both B2C and B2B transactions.

Present Status of e-Banking

E-banking at per international standard is yet to develop in Bangladesh. At present, several private commercial banks (PCBs) and foreign commercial banks (FCBs) offer limited services of tele-banking, internet banking, and online banking facilities working within the branches of individual bank in a closed network environment. As a part of stepping towards e-banking, the FCBs have played the pioneering role with adoption of modern technology in retail banking during the early 1990s whereas the state-owned commercial banks (SCBs) and PCBs came forward with such services in a limited scale during the late 1990s. Moreover, the banking industry as a whole, except for the four specialized banks (SBs), rushed to offer technology based banking services during the middle of the current decade. The existing form of e-banking that satisfies customer demand in banking activities electronically throughout the world are PC banking or PC home banking that include online banking, internet banking, mobile banking, and tele-banking.

PC banking or PC home banking

PC banking refers to use of personal computer in banking activities while under PC home banking customers use their personal computers at home or locations outside bank branches to access accounts for transactions by subscribing to and dialing into the banks’ Internet proprietary software system using password. PC banking or PC home banking may be categorized into two types such as online banking and Internet banking.

Online banking

Transactions in online banking are performed within closed network for which the customer use specialized software provided by the respective bank. International standard online banking facilities are expanding in Bangladesh. At present, 29 scheduled banks offer any branch banking facilities through their respective bank online network that provides facilities like transaction through any branch under the respective bank online network; payment against pay order or pay order encashment, demand draft encashment, opening or redemption of FDR from any branch of the same bank; remote fund transfer, cash withdrawal, cash deposit, account statement, clearing and balance enquiry within branches of the same bank; and L/C opening, loan repayment facility to and from any branch of respective bank under its own online network. Inter-bank transactions or transaction between inter bank branches are yet to expand. Under the modernization program of the National Payment and Settlement System, Bangladesh Automated Clearing House (which includes Bangladesh Automated Cheque Processing System and Bangladesh Electronic Fund Transfer Network) is scheduled to come into effect from September 2009 followed by implementation of online banking at per international standard in near future.

Internet banking

Internet banking refers to the use of internet as a remote delivery channel for banking services which permits the customer to conduct transactions from any terminal with access to the internet. It is the WWW through which banks can reach their customers directly with no intermediaries. Internet banking in true sense is still absent in Bangladesh. Only 7 out of 48 banks are providing some banking services via internet that include account balance enquiry, fund transfer among accounts of the same customer, opening or modifying term deposit account, cheque book or pay order request, exchange rate or interest rate enquiry, bills payment, account summary, account details, account activity, standing instructions, loan repayment, loan information, statement request, ,cheque status enquiry, stop payment cheque, refill prepaid card, password change, L/C application, bank guarantee application, lost card (debit/credit) reporting, pay credit card dues, view credit card statement, or check balance. The core banking activities like fund transfer to third party, cross border transactions and so on are still uncovered by internet banking offered by the scheduled banks in Bangladesh.

Mobile banking

Mobile banking (also known as M-banking or SMS banking) is a term used for performing balance checks, account transactions, payments etc. via a mobile device such as a mobile phone. Mobile banking is most often performed via SMS or the Mobile Internet but can also use special programs called clients downloaded to the mobile device. The standard package of activities that mobile banking covers are: mini-statements and checking of account history; alerts on account activity or passing of set thresholds; monitoring of term deposits; access to loan statements; access to card statements; mutual funds/equity statements; insurance policy management; pension plan management; status on cheque, stop payment on cheque; ordering check books; balance checking in the account; recent transactions; due date of payment (functionality for stop, change and deleting of payments); PIN provision, change of PIN and reminder over the internet; blocking of (lost/stolen) cards; domestic and international fund transfers; micro-payment handling; mobile recharging; commercial payment processing; bill payment processing; peer to peer payments; withdrawal at banking agent;3 and deposit at banking agent. Despite huge prospects, only a few banks adopted mobile banking in Bangladesh during the last year.

Tele banking

Tele banking refers to the services provided through phone that requires the customers to dial a particular telephone number to have access to an account which provides several options of services. Despite huge potential, tele banking services have not been widened enough in daily banking activities in Bangladesh. Only four banks so far provide a few options of tele-banking services such as detail account information, balance inquiry, information about products or services, ATM card activation, cheque book related service, bills payment, credit card service and so on. Funds transfer between current, savings and credit card account, stock exchange transactions etc are still inaccessible through tele-banking in Bangladesh.

Prospects of e-Banking

E-banking is now a global phenomenon. Apart from the developed countries, the developing countries are experiencing strong growth in e-banking. The Bank of Thailand has created an industry payment body to involve other stakeholders, in particular from commercial banks which take leading responsibility for the development of e-payment system and technologies. Internet banking in Korea has increased at a rapid pace. Korea is also leading in online brokerage and mobile banking. In Southeast Asia, internet banking is also developing rapidly in Thailand, Malaysia, and Singapore and to a lesser extent in Philippines (Mia et. al. 2007). In Nepal, ATMs are the most popular electronic delivery channel for banking services but only a few customers are using internet banking facilities. Among others, Nepal’s commercial banks have adopted Credit card, tele-banking, and SMS-banking.

Remittance (Electronic Way)

Today’s fast changing electronic banking channels have massively improved the flow of remittance across the world. In Bangladesh, Banks have grown up relations with many international financial agencies, or intermediaries to master the inflow of remittance into the country from the expatriates working in foreign countries. A few such operators working in Bangladesh are: Western Union Money Transfer, Money Gram, XPress Money.

Call center is a streamlined customer interface and offers a range of banking services through its call center agents. Customers are now getting improved services at a reduced cost in an exciting manner. Available services at call center are:

Account related services

Balance inquiry, transaction inquiry, duplicate statement, cheque book request, ATM/Debit card hot listing, and loan outstanding etc.

Product Information

Deposit accounts, Personal loan, Savings and current accounts, Debit card, Rates and tariff Inquiry, exchange rates, lending rates, deposit rates, tariff etc.

Other Services

Complaints handling, account opening procedure, Bank Information, change request etc.

Findings of the Study

Present Status of Various forms of E-Banking in Bangladesh: Total 40 banks (both public

and Pvt. Commercial banks) were surveyed and the results are summarized as below:

Table: Position of E-Banking in Bangladesh (As on January 31, 2011)

Status of Computerization and Electronic Banking System in Bangladesh

There are a total of 49 scheduled public and private banks in the country. Here there are four state owned commercial banks (Nationalized Commercial Banks- NCBs) have 3496 branches, five specialized banks (DFIs) have 1311 branches, 30 local private commercial banks (Private Commercial Banks-PCBs) have branches of the scheduled banks in the country. The banking system of our country, depending on computerization can be classified into three categories: (i.) Completely computerized (ii.) Partially computerized (iii) Not computerized. Standard Chartered Grindlays Bank Ltd., City Bank NA, American Express Bank, HSBC etc are completely computerized banks in our country. All privates and state owned banks are partially computerized and not computerized. The overall picture of computerization in the banking sector of our country presented in the

following table

Computerized Branches in different types of Commercial Banks

The overall computer density in the banking sector is 1.64. For foreign commercial banks (FCBs) the computer density is 45.34, where as for NCBs the ratio is only 0.41. The specialized bank scenario is almost same as the NCBs, 0.43. On the other hand, private commercial banks have comparatively higher ratio, 4.94. As a whole 81.81 percent bank does not have any local area network (LAN), 30 percent have WAN (Wide Area Network) but for some banks many branches are outside of WAN connectivity. At present, all of the foreign banks of our country are using online banking system, they are invested a lot for their automation banking services. For this reason, they are increasing market share every year. They are the pioneer of implementing electronic banking systems in Bangladesh, but now most of the private banks of our country are using electronic banking systems.

Recently a number of commercial banks of Bangladesh have become the member of Belgium based Society for Worldwide Interbank Financial Telecommunication (SWIFT). For international payment settlement 33 percent of banks are using now SWIFT. With the activation of the SWIFT system banks enjoy instant, low-cost, speedy and reliable connectivity for L/C transmission, fund transfers, message communication and worldwide financial activities. Earlier only foreign banks of this country were availing this facility.

Name of Some Electronic Banks in Bangladesh

Actually cent percent online banking is not available in our country. There are some banks that provide online and manual electronic banking services. The names of the some banks, type of services, electronic payment and their web addresses are given in the following table (http://www.bangladesh-bank.org/).

The objectives of this paper are as follows:

• To describe the different types of electronic banking system

• To highlight the importance of electronic banking

• To give the status of electronic banking system in Bangladesh

• To give the idea of different electronic payment system of electronic banking

• To identify the problem areas of electronic banking in Bangladesh

• To measure the customer satisfaction of the electronic banking in Bangladesh by talking with industry experts and bank officials.

• To make the necessary recommendations to solve the problems of electronic banking system.

The data for this paper have been collected both from primary and secondary sources of information. Primary data have been collected from the different banks of Dhaka City, Bangladesh through questionnaire and secondary data have been collected from various published materials and Internet resources in 2007. Major findings of the study are represented in the tabular and text format

Basic Components of Electronic Banking

An electronic banking system requires the following four components—

Banking system software

Communication Network

Delivery Channel

Switching system

1. Banking system software:

By using computer software package, banks can deal with the transaction of cash deposit, withdrawals, bill payment, bill collection, salary and settlement of provident funds, making accounting reports and statements etc. it does not require any use of papers to prepare journals, ledgers, vouchers or notes.

2. Communication network:

It is an important issue in an online banking. In some cases dial-up telephone and in other cases radio link is used for communication network.

3. Delivery channel:

These channels are used in corporate and retail banking, as well as to the individual or family oriented banking. Modern banks and financial institutions are providing facilities like balance reporting, accounts keeping, domestic and international payments, trade financing, monitoring, netting, cash withdrawals and factoring and other sorts of services related to these by using banksys, uroclear, swift etc.

4. Switching system:

To sort the transactions data in due places, e-banking network and various communication tools in bank host computer requires the use of switching system. It helps to prepare various reports and monitor the implementation of those.

Types of Electronic Banking

Electronic banking system provides customer services by means of various techniques or products. Types of services offered are different for each single product. In the following table, the basic types of electronic banking products are presented—-

AUTOMATED TELLER MACHINE (ATM)

Among the electronic fund transfer services, ATM is the most widely used and popular. With this automated computing machine, clients can deposit or withdraw any time of 24 hours a day. With the help of this machine fund can be transferred from one account to another and loan can be repaid. This automated machine can be established at the bank’s lobby, at the clients business avenues, apartment complex, busy commercial areas, shopping centers, factories etc. through ATM service, bank can render its retail services to the clients door. Thus clients can save their time and the transactions seem to be easy to them. On the other hand, banks earn their profit by providing services at lower cost.

Objectives of ATM

ATM has some objectives that make it popular:

Reducing internal operational expenses and increasing profit by increasing the market share are the main objectives of establishing ATM program. As ATM is an automated system, so there is no need to engage any employee to provide deposit and withdrawal services. As a result, periodic cost cutting can be possible.

Create market in the domestic and foreign countries for their banks and to sustain in the competition.

To provide highly efficient services in this modern age of connectedness.

To ensure the computational accuracy of the bank.

How does a customer operate ATM?

Banks supply plastic cards to their clients. Each card has its distinct number, client’s name, and signature of the client with magnetic stripe. Each client has a PIN (Personal Identification Number). During transaction, client put the card into the card input/ reader. Then ATM instructs its client to input the PIN. PIN is to be input into the machine within a specified time limit (Usually 30 to 90 seconds). If the client fails to input in due time or the PIN is wrong, the machine will take the card inside of it and the card cannot be retrieved at that time. Then clients have to go physically to the bank and get their cards if the authority is satisfied with the cause of failure.

If the PIN is correct, the machine asks the client about the type of the service. If the clients want to withdraw cash, then it asks the amount. The amount needs to be input with the numerical keyboard. After typing the amount, client will press the “Enter key” and within few seconds receive the cash, along with the card and transaction receipt and the machine became prepared for the next transaction. Clients are required to change their transaction types before the enter key. Because once the key is pressed, there is no other alternative to change the transaction mode.

Components of ATM:

An ATM mainly consists of two parts like input devices and output devices.

a) Input devices: the components of input devices of an ATM are as follows:

Card reader: The card reader captures the account information stored on the magnetic stripe on the back of an ATM/debit or credit card. The host processor uses this information to route the transaction to the cardholder’s bank.

Keypad: The keypad lets the cardholder tell the bank what kind of transaction is required (cash withdrawal, Balance inquiry etc.) and for what amount. Also, the bank requires the cardholders Personal Identification Number (PIN) for verification. Federal law requires that the PIN block be sent to the host processor encrypted form.

b) Output devices:

An ATM has following four output components:

Speaker: The speaker provides the cardholder with auditory feedback when a key is pressed.

Display Screen: The display screen prompts the cardholder through each step of the transaction process. Leased line machines commonly use a monochrome or color CRT (Cathode Ray Tube) display. Dial-up machines commonly use a monochrome or color LCD.

Receipt printer: The receipt printer provides the cardholder with a paper receipt of the transaction.

Cash dispenser: The heart of an ATM is the safe and cash-dispensing mechanism. The entire bottom portion of most small ATMs is a safe that contains the cash.

Debit card is one of the systems of electronic fund transfer. It is called cash card or asset card. Usually, in debit card, funds are directly debited to the clients deposit accounts. Debit cards can be explained in the following ways-

Debit card is one of type of special plastic card issued by the banks or financial institutions to the depositors, which hold magnetic coded number. The transactions can be operated as required on the basis of the recognition of the magnetic coded number by the machine. The holder of the debit card can easily operate Automated Terminal Based payment. Money can be withdrawn from deposit account and fund can be easily transferred in electronic way with this card.

Credit Card

Credit card is a popular process in retail electronic banking. Generally, if the clients have creditworthiness or have enough money in the deposit account, then the bank provides this plastic cash to the clients. In spite of having debit balance in the deposit account, a client can use this card. Generally, in a credit card, the loan account of a client is debited to reimburse the transactions conducted through the credit card. This card is used for payment of product or service or for withdrawing cash from some specific instructions.

Point of Sale (POS) Service

Under POS service, card owner’s accounts became debit and seller’s accounts became credit for the amount of the purchased goods or services.

Taka can be transferred by two ways:

Seller is required to make a sales draft like credit card. Then this sales draft would debit the card owner’s account and credit the seller’s account.

Respective clients/financial institution/sellers account’s are to be debited or credited by transferring taka from online point of sale terminals.

Main components using in POS from the viewpoint of activities conducting:

Terminates of POS

Concentrators terminals

Switching centre

Bank computer systems

Check Truncation

Check truncation is a process of service where, financial institutions do not return the rejected and un-honoured checks to clients. Financial institutions keep these checks with the monthly statements and provide rejected checks along with monthly statements to the clients.

Financial institutions keep rejected checks till 90 days. If the client finds any inconsistency or difference between the statement provided by the financial institutions and his/her own record, and then he/she can adjust the accounts by communicating with the institution within the “preservation period”.

Home Banking

Through developed electronic fund transfer system, banks can offer its financial services to the doors of customers. Banks at first launch telephone bill payments (TBP) process so that clients can enjoy banking while staying at home. TBP is a fund transfer service by which clients communicate with the financial institutions by phone and authorize them to collect their (clients’) bills, because of which financial institutions debit their client’s account and transfer the funds to the client directed payee account.

Retail Automated Clearing House (ACH) Service

The Automated Clearing House is the electronic network which transfers and clears funds between banking institutions on behalf of merchants and their customers.

ACH is integrated process of service by which payments of different financial institutions are cleared and exchanged in electronic way. ACH is a computer based integrated system and it is the distribution place of paperless transactions. Electronic payments are the substitutes of papers and are recorded in machine-readable from in magnetic tape and one account is debited and another is credited. The participants of ACH system are the members of Automated Clearing House Association. ACH exchanges electronic transactions within a specific geographical area.

Each transaction takes approximately 48 hours to clear, and we strongly suggest that merchants wait five days from the initial transaction date before shipping any goods. This leaves two days to debit the consumer’s account, two days to deposit the funds into the merchant’s account, and one day for the bank to post the transaction.

What is ACH?

Funds transfer system governed by the Rules of the National Automated Clearing House Association, which provides for the inter-bank clearing of electronic entries for participating financial institutions.

Wholesale Electronic Banking

Wholesale electronic banking is such banking systems where banking activities are performed through inter- bank networks.

Generally, the following activities are performed in wholesale banking –

Cash Management

Recently banks and corporations are becoming conscious about cash management to ensure available funds in response to the increase in money market rate. Cash management means.

Raise the speeding up of collection of cheques and bills payable,

Careful control of the cash disbursement,

Monitoring of cash flows,

Investment of the idle money.

The Cash Management Department ensures that funds in transit move safely and on time and maintains an optimum cash position. (The bursar staff processes student receivables, which will be discussed in greater detail in subsequent sections of this chapter.) The primary duties of the Cash Management Department include:

Monitoring daily banking activity;

Managing Automated Clearing House (ACH) transactions and wire transfer activity;

Reconciling credit card transactions;

Managing relationships with banks, credit card companies and check guarantee services;

Processing positive pay files that contain a listing of all checks that have been presented to the bank for payment;

Maintaining unclaimed property files;

Verifying daily manual deposits;

Tracking vouchers and providing backup to Accounts Payable;

Processing vendor payment and student refund checks;

Processing manual credit card refunds;

Reviewing and approving mileage and travel reimbursement requests; and

Maintaining an inventory of system wide depository bags and deposit tickets.

WIRE TRANSFER

Wire transfer is one of the most commonly used methods for transferring money from one person to another. In order to make a wire transfer, a person needs to visit a bank or the cash office. Wire transfer can be made from one bank account to another. In order to make a wire transfer an individual needs to visit a bank and provide detailed order of making the wire transfer. Banks require IBAN and BIC codes for knowing exactly where they need to send the money.

Wife transfer is a process in which funds are transferred from sender to receiver quickly and in due time. This type of transfer would be done within or outside of the country.

Wire Transfer activities of electronic banking system include the following 4 stages

1) Payment ordering parties: The person here decides to transfer fund to the recipient account

2) Payment ordering mechanism: In this stage, the sender instructs his bank to transfer funds to the specific receiver’s accounts with the help of wire transfer.

(3) Payment processing and delivery: In this stage, bank transfers fund from one account to another through fed wire, Bank wire, Chips, and SWIFT.

(4) Payment advising: After transferring funds, banks in this stage send messages to the recipient. Banks use the following 4 networks to send messages of fund transfer.

a . Fed wire (The Federal Reserve Communication system)

b . Bank wire

c . Chips (The Clearing House Interbrain Payment Service)

d . SWIFT (The Society for Worldwide Inter-bank Financial Tele Communication).

Corporate Clearing House

By clearing house, financial institutions clear and exchange their electronic payments. At present, in developed countries more than half a million people are using ACH system in paying their salary. Moreover, others are using ACH to serve other purposes. For example, large insurance companies collect their insurance premiums by using the debit entry of depository transfer check. Cash concentration strategy through ACH is very popular and widely used service. Corporations are going for ACH service after considering Financial the facilities (cost reduction, receipt of funds within one day, etc.) of the collection of insurance premium and cash concentration strategy.

Other Types of Electronic Banking

The terms ‘PC banking’, ‘online banking’, ‘Internet banking’, ‘Telephone banking’ or ‘mobile banking’ refer to a number of ways in which customers can access their banks without having to be physically present at the bank branch.

E-banking may be understood as term that covers all these ways of banking business electronically (Leow, Hock Bee 1999).

Tele-banking

Tele-banking service is provided by phone. To access an account it is required to dial a particular telephone number and there are several options of services. Options included-

• Checking account balance

• Funds transfer between current, savings and credit card accounts

• Bill payments

• Stock exchange transaction

• Receive statement via fax

• Loan payment information (http://www.csboak.com/telebank.htm)

The increasing awareness of the importance of literacy of computer has resulted in increasing use of personal computers through the entire world. Furthermore, incredible plummet of cost of microprocessor has accelerated the use of computer. The term ‘PC banking’ is used for banking business transacted from a customer’s PC. Using the PC banking or home banking now customers can use their personal computers at home or at their office to access their accounts for transactions by subscribing to and dialing into the banks’ Intranet proprietary software system using password.

Types of PC Banking

Basically, there are two types of PC banking.

The first type is online banking, in which bank transactions are conducted within closed networks. The customer needs specialized software provided by his bank. The second type is Internet banking, which German banks have been offering since the mid-nineties, although the only product they were offering at the time was information. Unlike closed networks, Internet banking permits the customer to conduct transactions from any terminal with access to the Internet.

Internet Banking

Internet banking would free both bankers and customers of the need for proprietary software to carry on with their online banking transactions. Customer behavior is changing rapidly. Now the financial service is characterized by individuality, independence of time and place and flexibility.

These facts represent huge challenges for the financial service providers. So the Internet is now considered to be a ‘strategic weapon’ for them to satisfy the ever-changing customers’ demand and innovative business needs.

Adequate legal framework and maximum security are the two essential factors for Internet banking. The comprehensive security infrastructure includes layers of security from the network to the browser, including sophisticated encryption that protects customers’ from intrusion when they access the bank over the public network. Actually mobile banking is a variation of Internet banking. Mobile banking is a good example of how the lines between the various forms of e-banking are becoming gradually blurred. Due to the new transmission technologies such as WAP (Wireless Application Protocol), portable terminal like mobile phones, personal digital assistant (PDA) or small hand-held PCs are providing bank customers with access to the Internet and thus paving the way to Internet banking (Islam, Monirul, March 06, 2005).

It assures immense flexibility and makes the financial services independent of time and place. However, the use of mobile banking is still in a nascent state. The slower transmission speed of the WAP standard and the limited amount of information available are just two of the factors inhibiting the use of those terminals.

Advantage of E-Banking

Swift transaction

Digital service

More security rather than traditional banking service

Less time consuming for the transactions

Twenty four hours service

Less risky to carry cash.

Risks in Electronic Banking

With the burgeoning of transactional banking websites, regulatory agencies are increasingly worried about the risks associated with e banking. The Basel Committee report on banking supervision (1998) states that the agency “recognizes that along with the benefits, electronic banking and electronic money activities carry risks for banking organizations, and these risks must be balanced against the benefits”. Following is a review of some of the risks that are inherent in e banking.

Operational Security Risk: External and internal security issues pose perhaps the greatest threat to the growth of e banking. Banks also face the threat of viruses that can be placed in the bank network, or a scenario where a hacker obtains confidential information and then cyber-exhorts the bank with an offer to sell the information back to the bank.

Legal Risk: legal risks can arise due to violations of laws, rules, and regulations. In the world of electronic commerce, where technology and business arc in a state of constant flux, there is considerable ambiguity and uncertainty regarding legal rights. Banks involved in electronic payments, such as stored value cards, must determine whether such transactions impact reserve Requirements. Yet other risks of cross-border regulatory compliance arise as the Internet blurs national boundaries for commerce and payments.

Reputation Risk: Any problems with either security or legal issues can significantly impact the reputation of the bank. This is especially important in the banking industry where public confidence is long touted as paramount. Reputation risk can range from problems of customer dissatisfaction with online services to security breaches and fraud. For instance, identity misrepresentation, or “spoofing”, where bank customer’s arc directed toward a false site, can lead to an irreparable loss of trust between the customers and the bank.

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Potentiality of E-commerce in Bangladesh

E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the Internet. These business transactions occur either business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business. The terms e-commerce and e-business are often used interchangeably. The term e-tail is also sometimes used in reference to transnational processes around online retail.

Background Of e-commerce In Bangladesh:

Bangladesh is one of the large market in the world as population but the peoples are not well enough for online market yet. Since 1970 to 2000 can be said that Bangladesh was almost in the darkest in e-Commerce business. The peoples even never imagine for e-Commerce. They just work in the computer for assignment for school, colleges and university or can be used in private organization or government. But it was very rare in the government project.

Since 2000 the students just waked up and started a revolution with computer work in every department in the every organization and also it’s going to involve most of the government project too. The peoples are getting better and better in terms of time. Bangladesh is also going fast and like western or develops countries. The peoples are doing many things online like read newspaper and doing lots of out sourcing work and getting very good money and not only himself also giving good remittance to the nation too. The peoples are specially studying in the private universities and they are very good enough for the e-Commerce knowledge and uses development. This is very exciting that the private universities are also giving free laptop to every student and forcing them to jump and learn many things from online. This is also nice to see that they are doing online business and putting many things on their sites and selling them easily.

Late 90s: E-Commerce started in Bangladesh in the late 90s. The earlier E-Commerce sites were actually gift sites targeted towards the Non-Residential-Bangladeshis (NRB) living in abroad. All the sites were based in abroad and had branches in Bangladesh.

Year 2000-2008: During this period of time, the E-Commerce sector observed slow growth. There were few E-Commerce websites but there were no system for online transaction which was the first condition for E-Commerce. In addition, high cost of Internet and low penetration meant that few people knew about these sites. According to Bangladesh Bank, payments and transactions by credit cards were nearly Tk11 billion in June 2008; one of the lowest in the world. The country had only about 400,000 credit card holders at the end of June 2009. From 2008, things started to look bright as Bangladesh Bank took various initiatives including implementation of e-Payment Gateway.

Year 2009: The real change came in 2009 when Bangladesh Bank allowed online payment in the country thus, officially opening up the E-Commerce sector. Another major incident of 2009 was introduction of WiMax internet in Bangladesh. It became quite popular in the country.

Year 2013: The year 2013 had been an important year in the history of E-Commerce in Bangladesh.

First, Bangladesh Association of Software and Information Services (BASIS) and Bangladesh Bank jointly observed “E-Commerce Week” for the first time in the country, supported by ICT Business Promotion Council. From January 5 to January 11, there were four roundtable discussions, two seminars, one technical session, special awareness program at Dhaka University and a special promotional campaign at Bashundhara Shopping Mall.

In February 2013, for the first time in the country, Computer Jagat, the leading ICT magazine of Bangladesh, under the supervision of Dhaka DC Office, organized the first fair on E-Commerce . The three-day fair took place from February 7 to February 9 at the premise of Begum Sufia Kamal National Public Library. The slogan of the fair was- “Festival for buying and selling at your premise.” A total of 31 public and private E-Commerce organizations showcased their products and services at the fair. Though first of its kind, the fair was a huge success attracting eighty thousand visitors. Computer Jagat also did live webcast of the fair which was seen by more than fifty thousand people in Bangladesh and abroad. Following the first ever e-Commerce Fair at Dhaka, Computer Jagat arranged e-Commerce Fair at Sylhet, Chittagong, London and Barisal with their partners and participants. Additionally, Bangladesh Bank gave permission to buy products and services online using international credit cards this year. Buying products and services from abroad using credit card is an important aspect of E-Commerce.

Age Group Users In Bangladesh:

Through the research conducted it can be observed that the population falling between the age brackets of 25-34 years account for the highest number of users, with the 35-44 and 18-24 bracket falling at second and third places respectively. One of the most significant reasons for this observation is the fact that people falling in the age bracket of 25-34 years are more inclined towards technology and its usage. These people are at the forefront of technological revolution and are more open towards online shopping.

Gender Popularity User In Bangladesh:

If we look at the overall e-commerce activity in terms of gender and compare the males vs females ratio for e-commerce in Bangladesh, we can observe that out of the total e-commerce activities carried out, 83% comprised of males, with females involved in only 17% of the total. However, if we compare the average e-commerce conversion rate 1 between the two genders, we will be amazed to figure out that it was nearly similar.

Female = 80%

Activity of male vs female in e-commerce across Bangladesh

Type of E-Commerce in Bangladesh :

Currently, three types of E-Commerce are popular in Bangladesh. They are-

Business-to-Business (B-2-B)
Business-to-Consumer (B-2-C)
Consumer-to-Consumer (C-2-C)

Main obstacles:

Compared to other countries, Bangladesh is a late entrant in E-Commerce. Yet, this sector observed tremendous growth within a short time. E-Commerce can be the next major driver of Economic development but there are some issues that need to be addressed. Otherwise, this sector would never reach its full potential.

Developing delivery channel to the customers
Affordable and un-interrupted internet all over the country
Improving the online transaction system
Online fraudulence

Life cycle of an e-Commerce transaction:

e-Commerce improves the efficiency and effectiveness of business, government and not profit organization agencies. The ability of this business conductance all over the world in 24/7. Its major advantage is online and can save a lot of time and money rather than go outside and spent some extra money for shopping. However going online does not guaranteed 100% success and it totally depends on the organization.

E-commerce payment process:

This is very clear that the peoples of Bangladesh are going to purchase online like western or Europe. There are not many sites like western but its increasing day by day in the country and also spreading the rest of the district of Bangladesh. The government also taking part of that and taking many projects to build digital Bangladesh. The peoples can realize that they can save a lot of time for doing online shopping and also can do others works too. Now a days we can see that people are giving bill online.

The e-commerce is the greatest opportunity for a person whether he or she pays the bill online or purchase anything or even can do the business to sell something’s unusable from his home or office. He or she does not need rent a office or space for sell. He just easily can sell this on his own website or even can use others site for selling goods or staffs. e-Commerce is the blessing by the God to the world. The western peoples can’t even think without e-Commerce because they are very much familiar with that and developing also day by day for better satisfaction.

The top payment methods in Bangladesh are:

Cash on Delivery : is the most commonly used payment method in Bangladesh. As per estimates, more than 95% of e-commerce users in Bangladesh prefer cash on delivery (COD) payment model.

Bank / Wire Transfer : Very few e-commerce businesses operate on the system of only delivering the product after receiving the amount through a wire/bank transfer.

bKash / UCash : Some e-commerce websites also prefer these payment models for transferring small amounts.

Credit Card : Most of the e-commerce websites in Bangladesh have merchant accounts integrated on portals to facilitate credit card transactions. However, almost all such e-commerce websites also offer multiple other payment methods and cater to the cash on delivery system.

E-Commerce in Different Sector in Bangladesh:

Though being a under developed country, selected segments of the Bangladeshi business community has embraced technology with reasonable success. Personal computers and the Internet are also emerging as day-to-day business tools. These positive indicators are favoring the prospects of e-commerce in Bangladesh. Some sectors are given below-

Ready Made Garments (RMG).
Banking sectors (Online Banking).
Online Shopping.
Web Hosting, Domain.
Online cards, gifts.
Oil and Gas sector etc.
Online Transportation System, Hotel Management and Tourism etc.

Geographic Trends Of E-commerce In Bangladesh:

Dhaka being the capital city as well as the metropolitan city of Bangladesh, prevails the list of yearly e-commerce activity in the country with 35% of total traffic, closely followed by the second-largest city and main seaport of Bangladesh, Chittagong at 29%. Gazipur City, the neighboring city of Dhaka which is less populated as compared to Dhaka and Chittagong, stands at third place with 15% of the country’s total e-commerce activity each year. Other cities with the highest inclination towards e-commerce following Dhaka, Chittagong and Gazipur City include Narayanganj and Sylhet respectively. More than 80% of the e-commerce transactions are carried out in three major cities of Bangladesh.

-Chittagong

-Gazipur City

Statistics showing geo-targeted e-commerce trends in Bangladesh

Advantages of E-Commerce in the Perspective of Bangladesh:

The multidimensional activity of E-commerce which Bangladesh can be benefited in business sector, i.e.-

Expansion of the era of Business.
Reducing of unemployment problems.
Reducing of communication difficulties.
Access to the international market.
Competition against exporting in other countries.
Business in round the clock.
Helps to enhance the knowledge about business.etc

Telecommunication’s Role in E-Commerce of Bangladesh:

E-Commerce is largely dependent on the Internet and the access, pricing and the quality of Internet services and internet services are significantly dependent on the status and performance of the telecommunications sector. As per the National Telecom Policy, 1998, the telecom sector (Fixed line, Mobile and the Internet) is liberalized for private investment. Following the National Telecommunication Policy, the Bangladesh Telecom Act-2001 was enacted. In order to separate the commercial operations of Bangladesh Telegraph and Telephone Board (BTTB) from its regulatory functions, a separate Bangladesh Telecommunication Regulatory Commission (BTRC) has been established in January 2002. Bangladesh is already connected with Information Supper High Way (I-Way / Submarine Cable) and with the 16-party consortium of the 20000 km „South East Asia-Middle East-West Europe (SEA-ME-WE-4) submarine cable projects as it has already installed the 1260 km branch line cable from the landing station at Zhilanja in Cox‟s Bazaar and at a point in the backbone of the undersea cable in the Indian Ocean. The capacity of the undersea cable will be available in the national network after the installation of fiber link between Cox‟s Bazaar landing station and Chittagong, which is to be completed by 2006 which connection has drastically reduce the communication cost and ultimately the transaction cost. Last Mile connections in Bangladesh are provided jointly by public sector and private sector. At present, in addition to the state-run BTTB‟s Land & Cell operation, four cellular and five rural fixed lines telecom service providers 195 ISPs and numerous cable operators are operating in rural and urban areas of the country. Key developments of Internet service are-

The focus starts to build on the country developing into „Digital Bangladesh‟ by 2021 with this strategy providing a boost to infrastructure.

Mobile internet services have been giving a much needed boost to internet access.
Provide board band services, however, continue to struggle.
Rapid early growth in WiMAX services after operators launch.
BTRC prepares to open market for more VoIP operator licenses.
BTRC issued 34 additional IIG licenses in 2012.
Banglalion and Augere were permitted to upgrade their networks to TD-LTE .etc

Major E-Commerce Websites in Bangladesh:

In spite of various barriers many e-commerce websites are established in Bangladesh. In July, 2013, an article published on Financial Express with title “e-commerce expanding at faster pace; yet no PayPal operation allowed in Bangladesh”. E-commerce in Bangladesh is expanding rapidly, thanks to a fast growing number of Internet and mobile users, people familiar with the business. The volume of e-commerce in terms of transactions in monetary value is expected to reach BDT-2000 million in 2013 against around BDT.450 million of 2012. The products and services that now dominate the country‟s e-commerce are railway tickets, domestic air tickets, hotel booking, electronic products, books, gift items, jobs, hotel reservation clothing and some food items. Major e-commerce websites in Bangladesh are given below-

daraz.com.bd
quickbuy.com.bd
bagdoom.com
ajkerdeal.com
e-courierbd.com
kaymu.com.bd
chaldal.com
rokomari.com
biponee.com

e-CAB (e-Commerce Association of Bangladesh):

Recently in Bangladesh e-CAB (e-Commerce Association of Bangladesh) has started their operation for provide a common platform for discussing and exchanging views on business conditions and issues, both domestic and international, affecting companies or organizations involved with E-commerce or online marketplaces through which trade is facilitated or commenced. e-CAB’s aim also to take action for preservation of rights and interest especially, of the members of the organization and generally for the development of the business services who are related with E-Commerce business, nationally and internationally. To take all steps to support, protest and prevent constitutionally all governmental law or proceedings imposed against any member of the association. The trade organization shall discharge its activities considering the state policy and overall public interest and also it shall not arrange participate or support any activities in contrary to the regulations of the state and subversive to the social peace & tranquility.They also collect maintain, distribute or supply all data statistics and other information necessary for the Email promotion and advancement of business of E-Commerce through letters, circulars, periodicals or though press and other publicity media and to obtain or develop information books, brochures, visual aids and education items for members and to distribute them on a pro-data, on profit on loss basis.

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Historical Development of eCommerce in Bangladesh

Kazi Waliul Islam

March 19, 2022

Updated On : May 27, 2023

Historical Development of eCommerce in Bangladesh

Despite significant growth in the e-commerce sector of Bangladesh, the industry is still in its infancy. Only 4% of the country’s consumers shop online, while the rest prefer shopping malls, markets, or physical shops. As a result, e-commerce businesses have not yet become popular. However, due to the Corona epidemic, the country’s e-commerce sector enjoyed a great deal of traction.

E-commerce Evolution

Munshiji is believed to be the first e-commerce in Bangladesh that Munshiji Technology Limited launched in 1999 to export handicrafts, silk, jute products, tea, leather, and leather goods. In April 2005, another e-commerce platform ClickBD.com was launched. Initially, users could use this website to sell any product. Besides having a marketplace, the platform later added online stores. Finally, in 2006, the country’s first free classified ad website CellBazaar was launched. Later, in 2014 the platform was renamed ekhanei.com .

Although several e-commerce operating in the country, according to the e-Commerce Association of Bangladesh or e-cab, the country lacked the necessary regulations and infrastructure for online transactions until 2008. In addition, internet services were expensive at the time, so the internet penetration rate was relatively low. Hence most of the country’s population was unfamiliar with these e-commerce sites. In 2009, Bangladesh Bank introduced regulations for online transactions. At the same time, Wimax Internet was introduced in the country. In addition, payment gateway infrastructure was developed for the first time in the country in 2010 with the establishment of ‘SSLCOMMERZ.’ Initially, the platform was launched in collaboration with Dutch Bangla Bank Limited and Brac Bank, but now it is the largest payment gateway in Bangladesh.

Bangladesh’s first full-fledged e-commerce company, akhoni.com, was founded in 2011 and later in 2016, was re-branded as bagdoom.com. Also, another online shopping platform ajkerdeal.com was launched in 2011. Meanwhile, in 2012 with the introduction of 3G internet technology in Bangladesh, internet penetration increased, and e-commerce operating in the country also started getting much-needed traction. In the same year, an online bookselling platform rokomari.com was launched following the strategy of global e-commerce giant Amazon.com. Presently, Rokomari, one of the most popular bookselling e-commerce platforms in the country, is expanding its business in other product categories, including electronics and stationery. Meanwhile, Bikroy.com, which was established in October 2012, has become the country’s largest C2C and B2C marketplace in consumer product sales.

In 2013, E-Commerce Week was celebrated with Bangladesh Bank and Bangladesh Association of Software and Information Services or BASIS. In the same year, a premium ICT magazine, “Computer Jagat,” organized the country’s first e-commerce fair under the supervision of the Dhaka DC Office. At the exhibition, 31 public and private e-commerce platforms displayed their products and services. In the same year, Bangladesh Bank allowed the use of International Credit Cards for online shopping. Moreover, chaldal.com , launched in the same year, is currently the most popular online grocery and food item provider in Bangladesh.

In the same year, “Daraz” began its operations and has become the leading and most popular e-commerce platform in Bangladesh. Now, the platform has enlisted global vendors besides local vendors on their platform, and they are the first to deliver foreign products directly to domestic buyers in the country. In addition, the platform is currently working to deliver the products of the multinational e-commerce ‘Ali Express through the platform. Furthermore, in January 2014, the e-commerce association, or E-Cab was established to acknowledge e-commerce-related concerns and ensure the growth of the sector in the country. In addition, E-cab has declared that year as ‘The E-commerce year 2015’.

On the other hand, with the launch of eCourier in 2014 and Pathao Courier in 2015, many more online-based parcel delivery services started coming to the market, which has played a significant role in the growth of the e-commerce sector in the country.

Also, in 2015, khaasfood started its operations with a promise to deliver fresh food. Moreover, Sheba.xyz , the largest online service-based marketplace in Bangladesh, was launched in July 2016. Besides Pran RFL’s e-commerce service othoba.com, another Bangladeshi e-commerce platform pickaboo.com began its journey in the same year. Meanwhile, in April 2017, two popular super shops of the country’ Meena Bazaar and Shopno’ launched their e-commerce website. In addition, many other groceries, home appliances, retailers, and big brands have also started launching their e-commerce websites.

In 2018, the Government of Bangladesh published a digital commerce policy as a guideline for e-commerce websites and to ensure consumer rights. In addition, it was established that copyright, hacking, and product pricing issues were to be enforced directly by the Ministry of Commerce.

In December 2018, the e-commerce platform ‘Evaly’ started its operations in Bangladesh. The platform soon became a major e-commerce platform by offering various lucrative offers and huge discounts. However, Evaly was later charged with fraud and corruption, and their operations are currently suspended. Similar allegations have been raised against several other e-commerce platforms, including Alesha Mart, Eorange, Qcoom, Dalal Plus, Dhamaka Shopping, and Sirajgonj Shop, many of which have shut down their operations.

In June 2021, to ensure customer rights and to stop fraudulent activity, Bangladesh Bank introduced an ‘escrow service’ for e-commerce. According to the new guidelines, banks or financial institutes will withhold online consumers’ advance payments until the seller has appropriately delivered the product.

In addition, in March 2020, a B2B and B2C e-commerce company ‘malamal.xyz’ was launched, serving as a dedicated e-commerce platform for selling industrial products. Meanwhile, in December 2021, Walton, one of the country’s most popular electronics and home appliance manufacturers, launched an e-commerce website called Walcart.

Current Scenario

Based on inventory, there are two types of business models in the e-commerce sector of Bangladesh. One is the ‘retail or inventory lead’ model, where e-commerce platforms buy products wholesale and caters to retail customers. The other is the ‘Marketplace or Zero Inventory’ model, where e-commerce businesses act as trustees between vendors and consumers. In addition, there is another business model called the ‘Mercantile Model,’ where e-commerce platforms provide delivery services on a commission basis and do not maintain any inventory. Popular e-commerce ‘Ajkerdeal’ follows this model.

According to a 2021 report by e-Cab, since 2019, e-commerce platforms in Bangladesh started extensive advertising, and by 2020 the e-commerce sector began to transform into a full-fledged business. There are more than 2500 e-commerce platforms in Bangladesh, of which 1% are large businesses, 4% are medium businesses, and 95% are small businesses. Of these, 1,600 eCommerce entrepreneurs are currently e-Cab members, of which 27 percent are women, and 73 percent are male entrepreneurs.

Besides e-commerce, Facebook-based business or F-commerce has also boomed in Bangladesh. F-commerce has been growing steadily since Facebook introduced its ‘Live’ feature. There are more than 5 lakh Facebook-based business pages in the country, of which 2 lakh pages are now actively operating business. Although e-commerce platforms grow at an average rate of 25 percent per year in Bangladesh, the dropout rate of these new entrants is about 35 percent. According to a report by e-Cab, the average basket value of the country’s e-commerce sector is currently BDT 2,200. In 2020, the average daily transaction volume of e-commerce was BDT 44 crore, which stood at Tk 16,000 crore by the end of the year.

According to another financial express, the market size of e-commerce in Bangladesh was USD 2 billion in November 2020. Still, as the sector is growing at a rate of 50 percent per year, the country’s e-commerce market is expected to reach 3 billion by 2023.

Bangladesh - eCommerce Bangladesh - eCommerce

Overview The e-Commerce sector has seen dramatic growth since the early 2000’s when Bangladesh lacked widespread internet access or a reliable online transaction system. In 2009, the Bangladesh Bank, the country’s central bank authority, began permitting online transactions. In 2013, the Bangladesh Bank also permitted the purchase and sale of goods and services online using international credit cards. According to the International Telecommunication Union (ITU), the number of internet users has nearly tripled from 6.5 percent of the population in 2013 to 18.2 percent in 2017 and continues to grow. While only 2 percent of the population has a fixed-broad band connection, 30 percent of the population has a mobile-broad band subscription. Nonetheless, Bangladesh still ranks 147 out of 176 on the ITU’s ICT Development Index 2017, an annual report that captures the level of ICT development. The eCommerce Association of Bangladesh (e-Cab), the trade body for eCommerce in Bangladesh, estimates there are 700 eCommerce sites and around 8,000 eCommerce pages on Facebook. Facebook remains a popular method for advertising and selling products, to a point that many businesses forgo creating websites. Ten billion taka in transactions take place on eCommerce sites per year according to a 2017 e-Cab report. Current Market Trends Currently, the following four types of eCommerce are popular in Bangladesh:

Business-to-Business (B2B)
Business-to-Consumer (B2C)
Consumer-to-Consumer (C2C)
Business-to-Employees (B2E)
Inadequate delivery mechanisms
A relatively low internet penetration rate
The lack of a robust online transaction system
Prevalence of online fraud
Undeveloped online marketing practices
The lack of a robust privacy policy

Online Payment Cash transactions are still the predominant financial transaction method for the majority of the population. According to research by e-Cab, more than 90 percent of eCommerce users in Bangladesh prefer the cash-on-delivery payment model. Most eCommerce business portals in Bangladesh have integrated merchant accounts to facilitate credit card transactions. However, almost all eCommerce websites also offer multiple other payment methods and still cater to the consumer preferred cash-on-delivery system. Very few eCommerce businesses operate on the system of only delivering the product after receiving payment through a wire/bank transfer. Online payment remains limited but is growing in Bangladesh as a result of an increase in internet/mobile cell phone penetration, gridlocked traffic which discourages in-person shopping, and growing per-capita income levels. In 2009, the Bangladesh Bank introduced an online payment system facilitating fund transfers and online payments of utility bills by credit card. Since 2011, there have been important developments in financial transaction regulation (mobile payments, digital wallets, and smart cards) as well as transaction infrastructure (e.g., electronic funds transfer payment gateways). The creation of the Bangladesh Electronic Funds Transfer Network is a step towards developing a modern payment system infrastructure. This has created expanded business avenues for financial institutions as well as entrepreneurs to offer electronic or mobile payment processing services to the unbanked population. This area of electronic payment processing services has already attracted local and foreign investment. Investment areas for non-bank entrepreneurs cluster in the areas of solution development and operations for payment intermediary services, direct service delivery models in partnership with banks, and the development of value-added financial applications. Mobile eCommerce The ITU’s latest Bangladesh profile states that 88.1 percent of inhabitants have a mobile phone subscription while 30 percent of inhabitants have a mobile broadband subscription. e-Cab’s 2017 report states that Bangladesh has 99 percent geographical coverage in voice and data connectivity. Utility bill payment and remittance transfers via mobile phone were introduced in Bangladesh in 2006 and 2010 respectively through the country’s leading mobile operators and banks, and have become very popular with the masses. The government also authorized mobile operators to sell railway and bus tickets, and tickets to cricket matches organized by the Bangladesh Cricket Board using mobile phones, which have gained popularity. Currently, 28 banks have approvals to offer mobile financial services, with 20 already launching services. Mobile banking services in Bangladesh include cash-in, cash-out, merchant payments, utility payments, salary disbursement, foreign remittances, and fund transfers. Digital Marketing With strong growth in the number of mobile internet subscribers and growing digital infrastructure, more companies in Bangladesh are investing in digital marketing. While traditional media remains strong among older demographics, digital media is more popular among younger segments of the population. Fund allocation toward digital marketing remains modest at 5 to 10 percent across companies, but as conversion continues, this statistic is set to change drastically. Digital media has specifically become a strong tool for small and medium enterprises to strengthen their brand recognition. Restaurants, fashion stores, gadget shops, and lifestyle pages increasingly use digital marketing. Content development and digital media marketing are the most popular services that digital agencies currently offer. Online advertising is also slowly expanding as video platforms mature. Digital analytics is still in the development stages in Bangladesh and not yet widely used by businesses. Major Buying Holidays The major buying holidays in Bangladesh include the major Muslim holidays of Ramadan, Eid ul-Fitr, and Eid-ul-Adha. Hindu, Buddhist and Christian Holidays, including Buddhist New Year, Durga Puja and Christmas, respectively, are also observed by segments of the population. Other major Bangladeshi holidays include: Bengali New Year (April 14), Independence Day (March 26), and Victory Day (December 26). Some of these holidays are based on religious calendar and depend on lunar sightings. Social Media Social media is widely used in Bangladesh. Facebook is the most prevalent of social media platforms with more than 29 million users in Bangladesh. Facebook is used to engage consumers and is also a major e-Commerce platform. There are over 8,000 e-commerce Facebook pages in Bangladesh, many of which are small businesses using solely Facebook to advertise and sell their products, ranging from clothes, beauty products to food. With faster internet connections, Google cache servers, and better streaming, YouTube is also gaining popularity in Bangladesh.

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Bangladesh - eCommerce Bangladesh - eCommerce

Business-to-Business (B2B)
Business-to-Consumer (B2C)
Consumer-to-Consumer (C2C)
Business-to-Employees (B2E)
Inadequate delivery mechanisms
A relatively low internet penetration rate
The lack of a robust online transaction system
Prevalence of online fraud
Undeveloped online marketing practices
The lack of a robust privacy policy

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Business Assignment on Bangladesh enters into e-commerce Area Assignment Bangladesh has recently entered into the world of e-commerce. Bangladesh Bank (BB) opened up the e-commerce transactions in the net in 2009.
E Commerce Policy Framework for Bangladesh
Bangladesh e-commerce started in, and remains mostly concentrated in, the area of B2C transactions. B2B (Business to Business): Proper B2B marketplaces with secure payment options, and auction and bidding facilities need to be developed. Government can arrange training or workshops for businesses (including MSMEs) to convert existing systems ...
E-Banking Business in Bangladesh
Our honorable course instructor has assigned us at the beginning of the semester an assignment on ''E-banking business in Bangladesh'' which is most vital and one of the basic concepts of our course titled E-commerce and E-business. we ,the group members of group 2 have provided our best effort to conduct assessment on that topic and present our...
Bangladesh
According to research by the e-Commerce Association of Bangladesh (e-CAB), more than 90 percent of eCommerce users in Bangladesh prefer the cash-on-delivery payment model. ... This mandatory policy eliminates competition and involves security risks, and NPSB becomes a single point of failure if it ever crashes. Mobile eCommerce. In a 2017 ...
PDF Overview the E-Commerce in Bangladesh.
typically uses the World Wide Web at least at some point in the transaction's life cycle, although it can encompass a wider range of technologies such as e-mail as well. Bangladesh has also stepped into the arena of ... Emergence of E-Commerce in Bangladesh: with the increasing diffusion of ICTs, more specifically the internet, the global ...
A Review on E-Commerce System in Bangladesh: An Empirical Study
These local e-commerce platforms have succeeded in disrupting the e-commerce market in Bangladesh by catering towards the local market and innovative business models for e-commerce in emerging markets. An interesting case study is how these company's innovative business practices, services portfolio, and marketing strategies have captured an ...
What is E-commerce and how does it work in Bangladesh
Besides, the trade body for eCommerce in Bangladesh, the eCommerce Association of Bangladesh (E-Cab) estimates there are 700 eCommerce sites and around 8,000 e-commerce pages on Facebook. This is because Facebook remains a popular method for advertising and selling products, to a point that many businesses forgo creating websites.
Electronic Banking in Bangladesh
Among others, attractiveness of e-banking includes: it lowers transaction cost; provide 24-hour services; ensure increased security and control over transactions; reduces fraud risk; performs higher volume of transactions with less time; increases number and volume of value payment through banks; allows remote transactions facilities that replac...
Assignment on E-Commerce Bangladesh
E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the Internet. These business transactions occur either business-to-business, business-to-consumer, consumer-to-consumer or consumer-to-business.
Historical Development of eCommerce in Bangladesh
According to a 2021 report by e-Cab, since 2019, e-commerce platforms in Bangladesh started extensive advertising, and by 2020 the e-commerce sector began to transform into a full-fledged business. There are more than 2500 e-commerce platforms in Bangladesh, of which 1% are large businesses, 4% are medium businesses, and 95% are small businesses.
Bangladesh
Currently, the following four types of eCommerce are popular in Bangladesh: Business-to-Business (B2B) Business-to-Consumer (B2C) Consumer-to-Consumer (C2C) Business-to-Employees (B2E) In order to facilitate e-commerce and encourage the growth of information technology, the Information and Communication Technology (ICT) Act, 2006 was enacted.
Transparency in Poultry Grower Contracting and Tournaments
Start Preamble Start Printed Page 83210 AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: This final rule amends the regulations under the Packers and Stockyards Act, 1921 (Act), to add disclosures and information that live poultry dealers engaged in the production of broilers must furnish to poultry growers with whom dealers make poultry growing arrangements.
Bangladesh
The eCommerce Association of Bangladesh (e-Cab), the trade body for eCommerce in Bangladesh, estimates there are 700 eCommerce sites and around 8,000 eCommerce pages on Facebook. Facebook remains a popular method for advertising and selling products, to a point that many businesses forgo creating websites. Ten billion taka in transactions take ...

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