Time is now for e-commerce to grow

Is life changing technology or technology changing life? Whatever may be the answer, life is becoming heavily dependent on technology. The Information and communications technology (ICT) is probably the most powerful one among all other technologies at this point of time.
In the recent past, Bangladesh has made big achievements in many sectors. Out of which, mobile financial service (MFS) is one of the outshining ones. MFS started only four years ago and now has 29.2 million subscribers which stand 16 per cent of adult population of the country (formal banking penetration is 40 per cent of adults). bKash and DBBL, with 58 per cent and 17 per cent of market shares respectively, are the two top players. While MFS is redesigning the financial sector, it is also helping some other sectors to develop - and e-commerce is one of them.
e-commerce was always a back bencher among other sectors in our country not because it didn't have the potential but because it didn't get the proper support and environment to grow. The major drawbacks were internet penetration, user-friendly payment method, security and a healthy base of subscribers which is again dependent on the first three factors.
If we compare the internet user status of Bangladesh with the developed countries where e-commerce is quite popular, then it will give us a clear idea about our backwardness in the field. Countries like USA, Canada, Australia, UK and Germany have 80-85 per cent internet access and Bangladesh has only 6.86 per cent.
Again, if we compare our status with that of other countries of the Next 11 of Goldman Sachs, Bangladesh is the last among all. The closest one is Pakistan with more than 10 per cent of penetration.

This poor internet access is the biggest hindrance to the development of e-commerce in our country. Mobile phone operators are playing a great role through deploying data services though there are issues regarding pricing of data packages since bandwidth gets cheaper day by day. This effort has got a momentum with the launching of 3G by the commercial operators from 2013.
Before October 2013, internet subscriber base was 36 million and 54 million in September 2015. The growth is only 55 per cent which is not as satisfactory.
The prospects of e-commerce has increased due to the proliferation of smartphone in recent years. Though the market is mostly dominated by feature phone, smartphone is slowly coming into the scene because of lower price. In the first half of 2013 smartphones accounted for 6.0 per cent of total handset shipment into Bangladesh whereas in Q4, 2014 it stood at 16 per cent. This shows how fast smartphone is grabbing the market.
When internet access and smartphone are a launching pad for e-commerce, a convenient and user-friendly payment method is the next big hurdle to overcome. Earlier, there was no other way to make an online payment in Bangladesh other than card. It has been estimated that there are 3.8 million debit card-holders and less than 1.0 million credit card-users in Bangladesh; the number of debit card-holders should have been 40 million by now.
Internet security is another issue. Revealing sophisticated information like card number and CVV code in the online interface gives the consumers a feeling of vulnerability regarding fraud and internet theft. Besides, internet payment gateway was not also available for which establishing payment network was extremely difficult. It was solved when Dutch-Bangla Bank Limited (DDBL) launched IPG in the name of Nexus-Gateway in June, 2010 and BRAC Bank, in December, 2010. Launching of IPG has practically opened up the door of e-commerce in Bangladesh.
So, only after 2010 the ground was prepared for e-commerce and it has got  a momentum by launching of 3G. But the final door, which is an easy method of making payment, was still waiting to be introduced. This  was done with the launching of MFS in 2011. As of today, 29.2 million people have an easy payment method ready at their hand and rate is increasing at the rate of 127 per cent.
Bangladesh is one of the very few countries which have maintained GDP (gross domestic product) growth consistently above 6.0 per over a decade. Along with this economic growth, the political commitment to turn the country  into a digital one opens a big window of opportunity for e-commerce.

The current government's vision of turning Bangladesh into a digital one has provided an opportunity for the companies, along with the consumers, to take up digital challenges. As a result, various government and semi-government organisations, autonomous and semi-autonomous bodies are also now trying to take their services to the door-steps of consumers based on ICT-technology. Usually these organisation are the very last to adopt any such changes. It has created a very positive environment for the e-commerce companies to grow.
According to BASIS (Bangladesh Association of Software and Information Services), more than 2000 online trading platforms have made its way to Bangladesh in just three years. It has been estimated that the market, including Facebook, has yearly transactions of around BDT 10 billion along with 20-25 per cent annual growth rate.
After telecom paved the accessibility (through internet and smartphone), MFS has addressed critical issues like:
i) Handy amount of customer base enabled with payment method so that the business case get successful,
ii) Secure way of making payment which has the capability of avoiding traditional internet fraud,
iii) Making payment from anywhere anytime within the country. It means one can make payment on weekly holidays or after mid-night when traditional banking services are not available,
iv) Relieves dependency on COD which is a big headache for each and every e-commerce initiatives,
v) It also brings transparency in transaction and removes dependency on delivery boy handling cash,
vi) For virtual goods and services real-time delivery is possible thus ensuring higher level of excellence.
However to capitalise this enormous supporting factors, e-commerce industry needs to carefully steer its business. Building trusted brands, managing innovative frauds and service excellence will be the key to success.
The writer is currently working as Head of B2B, Mobile Financial Services at Grameenphone Ltd. Prior to joining Grameenphone he worked in bKash Ltd., Citycell, Dhaka Bank Ltd. and Chittagong City Corporation Computer College in various capacities.
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