The Internet Has Changed Our World

The Internet Has Changed Our World



Welcome to our new series Possible If You Want, powered by Grameenphone, exploring the power and possibilities of the internet. Over the perhaps last 20 years, the internet has reshaped our world. Today, we communicate and connect differently. We shop and consume differently. We build companies and solve problems differently. The internet has penetrated and transformed almost every area of our lives.

This series is about our innate possibilities, the power of the internet, and what happens when we bridge the two. We’ll be interviewing some of the country’s successful technology entrepreneurs and learn about their vision, their take on the power and possibilities of the internet, how they personally and their businesses use technology to tackle some of the pressing problems of our society and much more.

All the stories will be exclusively published in Future Startup and you can find them here.


Introduction 

  • Mobile phone: Bangladesh is a mobile-first country – the ninth largest mobile market in terms of the number of subscribers in the world. Total unique mobile phone subscribers in the country stand at 85 million (GSMA, 2017). According to BTRC, total mobile subscribers has reached 161.506 million at the end of May 2020. 
  • Internet penetration: According to Bangladesh Telecommunication Regulatory Commission, the number of internet users shot up from 30.48 million in 2013 to 106.410 Million at the end of July 2020.
  • Mobile internet penetration: As of 2020, there are 97 million mobile internet users in Bangladesh (BTRC). 
  • Broadband penetration: As of 2020, there are 8.57 million broadband internet (ISP + PSTN) users (BRTC).

Although BTRC is generous in how it defines being online (it includes anyone who has accessed the internet within the past three months), these numbers are impressive. This growth means more and more people who did not have access to the internet before now have access. 

In many ways, this development is closing the digital divide between the rich and the poor, making the opportunity equally accessible to everyone. This is beneficial progress because several studies suggest that a 10% increase in internet penetration is correlated with a 1.35% increase in GDP for developing countries.


I. The great transformation 

We are living in a time of great transformation. The internet coupled with digital technologies has changed the fabric of our lives at its core. From our personal life to how we communicate to how we consume entertainment, our lifestyle has been going through a relentless pace of changes. Things don’t take much longer to become obsolete. Today’s hot trends go out of fashion in a week. Digitization has been bringing profound changes to our businesses – how we deliver service, reach out to our customers, and everything in between. 

This transformation has particularly been fast-paced in Bangladesh. Over the past several years, from almost oblivion, digital has gained significant prominence and become a mainstream phenomenon. Digital platforms and digital services are taking over lives and industries. 

The central difference between the digital and conventional world is in the mindset. The internet represents an abundance mentality and freedom whereas the analog world is about scarcity. This is the central reality of this new world that changes many rules. 

II. Business unusual – the new consumers and the new businesses 

The Internet has revolutionized every aspect of our lives from communications to commerce to the community. From ordering food, shopping grocery, buying a television, sharing a moment with a friend, communicating with a relative abroad, consulting a doctor, calling a cab, the internet is in everything we do. Before the Internet, if you wanted to keep up with the news, you had to walk down to the newsstand and buy a local newspaper or wait for an evening television news report. But today, newspapers or televisions seldom break the news. We know what happened in the US far ahead of any journalist. Facebook and messaging services have become the biggest news media. Today, consumers have much greater access and power than at any time before. 

Similarly, a combination of mobile and internet offers an incredible opportunity for today’s internet companies. Mobile allows centralization and aggregation. You can build one app for many services. A number of companies such as Pathao and Shohoz have been trying to do that in Dhaka. Unlike the analog world, in mobile, you can put the world in a small device and bring it to users. It is naturally tempting when you see such a big opportunity that you have all the means as well as the reasons to pursue. The lure is even stronger when you look at the precedence of such things happening in markets like China or Indonesia or Singapore.

III. Internet and a new world of commerce 

A growing number of companies are moving online and adopting a direct to consumer model amid the coronavirus pandemic as companies across verticals increasingly identify with the fact that the coronavirus pandemic is a setting and that we are about to see a sea change in consumer behavior out of this pandemic. The internet has long been fueling this change. The coronavirus pandemic has accelerated this pace of change. 

Before the pandemic, it was mostly startups and small players taking the advantage of the internet and launching winning products and services. That has changed in the past months. Today, an increasing number of incumbent large consumer product companies are embracing the internet and in the process transforming commerce as we know it. 

Unilever is the latest case of brands embracing ecommerce as an important channel for reaching customers. On July 15th, Unilever Bangladesh introduced U Shop, a one-stop online shop for all Unilever Products. Previously, global skincare brand Nivea partnered with multiple e-commerce platforms in Bangladesh to make its portfolio of personal care products available to consumers online. Local conglomerate MGI did the same for its consumer products. Marico has also launched initiatives to strengthen its online presence. Aarong, the largest fashion retailer of the country, has been seeing phenomenal growth in its ecommerce orders. 

Companies selling online is not a new trend. Unilever products have always been available on major ecommerce sites for a long time. And it is the same for many other brands. 

What is different this time? Two things: 1) we are seeing that companies themselves are directly getting into ecommerce 2) companies are paying a lot more attention to their online operation. 

Direct to consumer (DTC) has been a major trend over the years as both consumers and new generation businesses move online and directly sell to consumers. 

In the past, it has mostly been about small upstarts who launch online taking the advantage of low-cost and then eventually move up in the ladder such as Dollar Shave Club in the US which Unilever later bought for about $2 billion dollars. Now the trend is increasingly being adopted by major brands across verticals. It appears pandemic has helped accelerate the pace. 

____________

The pandemic has proved that the internet is inevitable. The shift that we are seeing in more businesses moving to digital is simply a wider recognition by companies across verticals of this reality. Pandemic has fast-forwarded commerce. 

___________

III.A: The second-order consequences

This shift in how commerce for both consumers and businesses works, however, is happening in layers and comes with a myriad of second-order consequences. 

For most incumbent companies such as MGI and Unilever, the e-commerce move is part of an emergent strategy as these companies find ways to tackle the pandemic. The good part of an emergent strategy is that it evolves organically. As a result, we are seeing a number of trends and patterns coming to the surface as brands try to move their businesses online to tackle the pandemic. 

1/ Brands are approaching this shift in two ways: 1) a number of companies are enlisting their brands on ecommerce marketplaces and sites such as Daraz, Chaldal, Evaly, and so on. They are approaching it as yet another channel for sales and not as a model for reaching customers directly. 2) Some companies are building independent ecommerce sites as brands evolve to DTC model 3) and a third group of companies is doing the both: building their own independent operations as well maintaining a presence in other ecommerce sites as well. 

2/ Each of these decisions comes with various second-order consequences in the short and long run. In simple terms, in DTC, you own the customer interaction, which is the most critical thing in digital. If the brand has a strong image in the market and a strong user base, DTC makes complete sense, which Nike and a few other brands are doing in markets like the US. If you don’t have a strong brand image, more distribution channels are better for you. 

3/ There are other consequences. One change we are already seeing: growing demand for managers and professionals who can run digital commerce operations and technologists who can build ecommerce platforms. Similarly, there will be more jobs around ecommerce logistics and other areas of ecommerce operations. 

4/ The shift will increase the overall spending in ecommerce and digital advertising. As more companies push ecommerce, the overall GDP of ecommerce is likely to grow, which the pandemic has already accelerated. 

5/ These changes are going to create competitive pressures in the market. The fragmentation will eventually threaten the aggregators. If enough brands see value in DTC, the overall ecommerce scene is going to be very different in Dhaka than other markets. 

The pandemic has proved that the internet is inevitable. The shift that we are seeing in more businesses moving to digital is simply a wider recognition by companies across verticals of this reality. Pandemic has fast-forwarded commerce. 


IV. Building the future 

The Internet has brought an incredible opportunity to explore opportunities and ideas and work that were reserved for a select few. Fortunately or unfortunately, we are living through a pandemic that has been fatal for far too many people from too many perspectives from employment opportunities to lack of healthcare support to a crisis of mental health and much more. 

This new reality brings us to an urgency. As Marc Andreessen of A16Z wrote in his recent famous essay, it is a time to build. Building for creating opportunities. Building for better services for even greater numbers of people. Building for addressing critical challenges of our time. We need better manufacturing. We need better education. We need better transportation. We need better healthcare. The building, it appears, is the most important work we all have to address. As Andreessen puts it:

“Every step of the way, to everyone around us, we should be asking the question, what are you building? What are you building directly, or helping other people to build, or teaching other people to build, or taking care of people who are building? If the work you’re doing isn’t either leading to something being built or taking care of people directly, we’ve failed you, and we need to get you into a position, an occupation, a career where you can contribute to building. There are always outstanding people in even the most broken systems — we need to get all the talent we can on the biggest problems we have, and on building the answers to those problems.”

To that end, the internet brings us an immense opportunity. The Internet has democratized access to opportunities, information, knowledge, connection, and every other critical raw material for building. It empowers and enables each of us to be a builder. 

As I wrote before, you can divide the internet age into two phases: penetration and deployment. Penetration is about bringing people on the internet. Deployment is about developing and offering services and products and solutions using the power of the internet. 

Building for existing internet users is no small opportunity. Although Bangladesh is not yet there in terms of penetration and has a long way to go before the country brings all the people on to the internet, building services and products for the existing internet users have already begun. The opportunity is endless there both in terms of scope and what has been done so far. 

Mobile internet offers an unprecedented opportunity for growth. The unprecedented growth in mobile and internet penetration has implications not only for tech but also for many other industries. Internet penetration is slowly catching up with mobile penetration. But compared to that, services on the internet are not there yet. This is where the next big growth opportunity lies – the usage of the internet. 

We have seen a handful of successful products that have been built on top of the mobile phone and internet in Bangladesh creating new use cases for mobile and internet such as bkash, Pathao, Chaldal, Bdjobs, and a few others but there are many more opportunities to explore. The use phase of the internet is just getting started.

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