Online Shopping Among The Bangladeshi Smartphone Users Lowest In Asia Pacific
Behind the sluggish growth of mobile commerce in Bangladesh
A recent study done by the GSM Association, a trade body representing the interest of worldwide MNOs, found that Bangladeshi smartphone users are among the lowest (11%) in the Asia Pacific to shop online, lagging behind even Pakistan (21%) while on per with Myanmar (11%).
The report puts smartphone users in the Asia Pacific into three categories; monthly shoppers, less frequent shoppers and those who entirely don’t use smartphones for online shopping purpose. Overall, South Korea holds the highest rank with a record 87% of shoppers use the smartphone for online shopping, while both Bangladesh and Myanmar is at the bottom of the chart with only 11% of smartphone users shopping online.
Bangladesh’s neighbor, India, is nearly 5 times ahead in this prospect. 28% of her smartphone users are engaged in online shopping regularly.
What you need to know
- As mentioned earlier, only 11% of smartphone users in Bangladesh shop online. It means while mobile commerce continues to dominate ecommerce narrative in many markets, Bangladeshi smartphone users are not into it yet
- Of those, 6% shop online on a monthly basis.
- 5% shop on a less frequent basis.
- And the rest 89%, which is the exact same figure for Myanmar, don’t use smartphones for online shopping altogether, according to the study.
Bangladesh’s smartphone penetration stands at 16.1% of total population. If we consider the smartphone users who are shopping online, this means only 2.9 million people are doing online shopping among which only 1.6 million doing it monthly. As many as 23.9 million smartphone users do not do online shopping entirely.
According to BTRC website, the total number of active internet subscribers has reached 96 million in July 2019, among which 90.409 million are mobile internet users. Meaning, more than half of the population has mobile internet penetration. The reasons behind this spectacular and rapid development are, according to the GSMA study, upload speed grew twice, mobile latencies almost halved and per user international bandwidth increased by a third.
Even after having more than half of the population under mobile internet penetration and being the fifth largest mobile market in the Asia Pacific (GSMA: Country overview), only 11% online shoppers are using smartphone to do so is quite an irony to bear with. Many of the factors that contribute to this are:
Demanding behavioral change
E-commerce is still a new thing. People are not used to this type of online buying behavior. Thus on one side, e-commerce is offering customers a new landscape for shopping, on the other hand, it is asking them to alter their shopping behavior, which is a tall order at least for now in the early days. A handful of ecommerce companies and eCommerce initiatives such as Deligram and Ekshop are trying to address this behavioral challenge with various initiatives.
Mobile internet is expensive
According to GSMA 2017 country report, Bangladesh has 35 million unique mobile internet subscribers. But the usage remains limited for most mobile internet users – one of the reasons being expensive and complex nature of mobile internet packages. There is also quality issue. On the other hand, online shopping is not an instantaneous job. It takes time because one needs to see the products and go through a whole purchasing process. Despite the fact that mobile internet is pretty expensive in Bangladesh and it comes with a lot of hidden conditions and limitations and complex offers that hamper user experience, mobile internet usage continues to grow rapidly. But it remains inadequate to enable people shop online using smartphone.
There is quite a large gap regarding the quality of services that e-commerce sites promises and the quality of services that the customers receive. In many cases, there have been complaints from the customers in this matter. This is one of the reasons behind limited adaptation of eCommerce in Bangladesh.
Price and quality discrepancy
Price is the ultimate retail shopping driver. This is something many eCommerce players in Dhaka often miss. In most instances, shopping online is expensive for customers than shopping in physical retail. While many eCommerce promises convince as an incentive, unfortunately, convince is simply not a strong enough incentive.
Absence of proper incentive for people
This modern world thrives on incentive. For a shopper, price and quality are two of the most important incentives. E-commerce platforms need to give additional incentives other than mere convenience. Because no matter how fast your platform beats Dhaka’s traffic people will always judge you by the competitive price and the quality of service that you adhere to.
The data that only 5% of total smartphone users in Bangladesh shop regularly online has been making a wave in online and offline discussion forums in Dhaka. While it is an interesting finding and quite a depressing one in that, it does not really tell much about either eCommerce industry or smartphone users in Bangladesh.
Many people took it seriously because in most markets mobile commerce is a key trend dominating overall ecommerce narrative. It is a key trend in terms of internet usage in Bangladesh. However, it could also be that eCommerce is going to be an entirely different realm where mobile commerce is unlikely to play an outsize role anytime soon.
Muhammad Jubayer is an undergraduate student at the University of Dhaka studying Finance. He works as a Trainee Analyst (Intern), and writes about startup, entrepreneurship, and e-commerce. You may reach him at [email protected]