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Starting a New E-commerce Business in Bangladesh in 2021? 5 Beginners’Mistakes to Avoid

Written by Md Saimum Hossain and Mahadi Hasan Sagor, two co-founders of the premier digital-first advertising agency GEEKY Social. Their track record and experience of working with more than a hundred small, medium, and large e-commerce businesses home and abroad was the chief motivation behind this article. Click here to talk to them for help with digital media buying! Alternatively, they can be reached at [email protected].

Starting in 2013, we’ve worked with probably more than 100 f/e-commerce businesses in our entrepreneurial lifetime. We have served, managed, struggled, failed, and succeeded with our clients during this period. Now, as e-commerce gains more importance than ever and new e-commerce entrepreneurs enter the market in hundreds if not thousands, we thought we would distill what we have observed in these past 8-odd years. We write this two-part article where the first part contains what we have observed to be common patterns of mistakes by first-time e-commerce entrepreneurs. 

1. Not adopting a niche business strategy

One of the biggest mistakes new e-commerce entrepreneurs make is to focus on broad categories instead of a niche. As a general business strategy, in the e-commerce space too, if you don’t have a big investment backing you up that can get you by for several years until you reach enough scale to turn a profit from your operations, you are better off being a niche player. Instead of competing with the incumbents (existing players) in an already crowded broad market segment, find out a niche that you can profitably serve and stick to it. Chances are significant that you will build a brand that is known for its specialization and a loyal customer base that will help you and your business remain afloat without burning much cash.

Take a look at renowned e-commerce brand “Gowala” whose founder Md Shafiul Alam focused on being a dairy-based e-commerce rather than competing with other broad grocery e-commerce players like and successfully stood out from the crowd from a brand perspective.  

2. Not serving a big enough target segment

The first point above comes with a caveat and that is what we would like to caution you against: Being a niche player doesn’t mean you will focus on too narrow and too small a market segment (e.g., selling food items for novelty pets). Before you spend even one taka of investment in your new e-commerce business, make sure that you quantify your niche customers and try to understand whether the niche is going to have enough scale to make a profit.

You don’t need complex algebra to quantify the market. Use simple, common-sense metrics like the total number of estimated customers multiplied by average order value in a year or a lifetime. We have seen too many businesses fail in Bangladesh due to focusing on a market that is too narrow to serve with the kind of fixed investment that is required for running e-commerce logistics operations. 

3. Not having/utilizing an Omni-channel acquisition plan

Okay, let us start with defining what we mean by “Omni-channel”: It is the fact that a business is present on all touchpoints/channels of a customer’s purchase journey and therefore targeting and acquiring customers across multiple channels. In Bangladesh, first-time e-commerce entrepreneurs have a tendency, in our experience, to consider and utilize Facebook both as their primary storefront and customer acquisition channel.

While there is no denying that with approximately 40 million active users and an aggressive targeting mechanism, Facebook is still the most relevant platform for e-commerce businesses in Bangladesh, over-dependence on Facebook can put you in a tight spot for several reasons. The most vital of those reasons is the “cost” factor. When you combine multiple channels in your acquisition efforts, you can experiment and see which platform provides what kind of Return on Ad Spend (ROAS – defined as sales in taka generated against every taka spent for media buying) for your marketing budget. When you consistently track this kind of data for some time, you have a dataset from which you can determine which platform provides you with the best ROAS. 

Add to the fact that having an Omni-channel acquisition plan also means that you are not at the mercy of one single platform. This means that if there is any adverse effect on Facebook (political issues, algorithm updates, etc.), you will still have other channels to fall back on. Finally, not every type of your customer is on Facebook. Using an omnichannel plan, you will be able to reach and convert diverse customer segments and churn out incremental sales from each.  

Safe-food e-commerce company Khaas Food’s founder Habibul Mustafa Arman has successfully utilized this omnichannel strategy to transform his business. Khaas Food uses a multitude of channels like Facebook, Google, Email, SMS, Retail Outlets & Modern trade, etc. to target and acquire customer orders which have served the business pretty well. 

4. Not taking a marketing funnel-based approach from Day 1 

Confused about what a “marketing funnel” is? Don’t be. In its simplest form, a marketing funnel is nothing but a tool to better understand your customer’s buying journey by segregating it into 3-4 interconnected stages. It’s called the marketing “funnel” because the final outcome looks actually like a funnel that covers the considerations customers go through when making purchase decisions: awareness, engagement, and action/purchase. Marketing funnels are essential in understanding how your prospective customers are interacting with your business online and how you can bring more people from one stage (e.g., awareness) to the next (e.g., engagement) and ultimately convert them into your paying customers.

Now, while running an e-commerce business, we understand how “generating sales” easily tops your priority list. However, we see far too many first-time entrepreneurs suffer from a lack of a basic understanding of how the selling process works – how people go through stages of awareness, engagement/consideration concerning a product/service and then ultimately takes (or doesn’t) the much-awaited purchase action (hit the Checkout button). Once a good set-up “marketing funnel” captures this customer behavior and gathers pertinent customer data for you, you then get to optimize your marketing efforts and target/re-target certain groups of people to take certain specific actions. It will not only help you unearth crucial insights but will also bring in more revenue, increased traffic, better ROAS, and, most importantly, higher retention and repeat purchases. 

Too many entrepreneurs in the Bangladesh e-commerce space don’t understand either how funnels work or how important funnels are. However, we are of opinion that much of the hype around the new wave of e-commerce can and should be attributed to the power of utilizing customer data in funnel-based marketing. To help those entrepreneurs with their funnel-driven marketing solutions, tools like Webengage were created to save cost and get the customers to take purchase actions. 

5. Not having control over critical digital assets

We cannot stress this point enough: First-time e-commerce entrepreneurs in this country fail to retain control over their critical digital assets like Website Cpanel, domain, and hosting credentials along with the primary ownership of social media pages like a Facebook page, Instagram page, etc. On top of that, some of the entrepreneurs don’t have ownership of their ad accounts too. It’s either an early-stage employee or a family member or an agency that has a possibility of operating in bad faith that has the login credentials to all of these mission-critical digital assets. So whenever there is a conflict between the entrepreneur and any of these parties holding the keys to the fort, the entire business operations are at the risk of a shutdown.

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