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Only 23% Of Internet Users In Bangladesh Shop Online

Jul 20, 2016

The good days are ahead for the ecommerce industry in Bangladesh. Despite all the talk concerning the growth of the sector, only a meager 2% of the entire population and 23% of internet users shop online, according to a B2C UNCTAD eCommerce Index 2016.

UNCTAD B2C E-COMMERCE INDEX measures the readiness of countries to engage in online commerce. The index is composed of four indicators: internet-use penetration, secure servers per 1 million inhabitants, credit-card penetration and a postal reliability score. The 2016 edition is second of such report published by the UNCTAD.

Luxembourg, a tiny European country, secured the first position in this year’s index followed by Iceland, Norway, Canada and Japan. Six of the top ten ecommerce ready economies are European, along with three from Asia-Pacific region and one from North America. The United States stands at 11.

Among the developing countries, Asian Tigers, Korea, Hong Kong (China) and Singapore, with high Internet penetration and well-developed logistics lead the pack followed by United Arab Emirates, Qatar, Uruguay, Kuwait, Chile and Malaysia. Bangladesh stands at 121.

The index covers 137 countries. Although, the report covers areas like internet penetration, ease of payment [credit card], logistics, availability of online shops but there are other forces that play a role in the growth of ecommerce that the report did not take into account. In many economies, retail market environment, literacy, capacity of the users, and consumer preference for shopping also play a role in determining the growth of ecommerce.

Similarly, while access to credit card was considered as synonymous to ease of payment but it is not appropriate for many economies. There are countries with a very low rate of credit card usage but they are doing well with ecommerce and solved payment problem by applying other mechanisms.

The reports also explored why people don’t shop online. Among the reasons reported by the participants in various high, middle, and low-income countries are payment problem, lack of online shops and delivery issue top the list.

The eCommerce industry has experienced a tremendous growth in recent years in Bangladesh. The market size has grown rapidly. We have seen some very promising companies like Chaldal, Ajkerdeal, Bagdoom, PriyoShop in the sector. And investments are also happening in the space. However, several critical problems also persist for the sector like payment, logistics, and a proper framework. Despite the limitations, the sector has a bright future given that it is just getting started.

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Ibrahim works as an Intern at FS. He takes interviews, writes features, and meets entrepreneurs and makers and doers.

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