Times of Dhaka : Online shopping has emerged as a new window of trading in goods and services in Bangladesh, boosted by the expansion of information and communication technology (ICT), industry people said.
They said online trading is getting popular in the country as many companies have entered the fray offering a wide range of products including kitchen items, clothes, shoes, cosmetics, home appliances, books and even flats.
Part of the reason why this is becoming popular, they said, is its hassle-free feature that saves both time and money.
To reach out to the potential customers, the companies post advertisements in social media and online news outlets besides the mainstream one.
The industry people said online business is flourishing both in formal and informal ways, with the latter mushrooming on the back of social networking sites such as Facebook pages.
They added many of such pages that offer virtual shopping are seasonal and become active especially on festivals like Eid and Pahela Baishakh.
"The main reason behind such a significant growth in online shopping is the easy access to internet and its increasing number of users," chairman of ajkerdeal.com Fahim Mashroor told the FE.
Ajkerdeal.com offers products such as food items, apparel, cosmetics, jewellary, accessories, electronic products, shoes and home appliances.
According to the Bangladesh Telecommunication Regulatory Commission (BTRC), the total number of active internet subscribers reached 45.67 million until April 2015 while 44.22 million are mobile internet users.
"E-commerce allows one to shop virtually everything online. An online portal offers a wide range of products--from kitchen items to flat," Razib Ahmed, President of E-Commerce Association of Bangladesh (e-CAB), said.
Websites offer online shoppers a wide range of options while allowing them to shop staying at home as city dwellers prefer this due to traffic jam, he added.
Aggressive advertisement campaigns by online classified websites such as Bikroy.com and Ekhanei.com have helped create awareness among ordinary people about the potential of online buying and selling, he noted.
The e-CAB started its journey on November 8 last year and has 160 member companies. Many e-commerce websites and Facebook pages are unable to join this association because the owners have no trade licence, Mr Ahmed added.
Faria Jahan, a customer care official at Diamond World Ltd, said customers can buy their products faster.
She added that the online system had enabled the company to attract clients from across the country--not just Dhaka and Chittagong, where it has only six outlets in Dhaka and one in Chittagong.
Nazmul Amin, operator of a Facebook page-- nokshactg.com-said young people between 24 and 35 are the main customers of such mode of trading.
On an average, four to five thousand people visit his Facebook page and the number increases before the Eid festivals, he added.
Officials at Chaldal.com said they are delivering kitchen items in the capital city within three hours while it takes only an hour to deliver within Uttara-main focus of the site.
The officials said one can get his or her desired products with a few clicks and without going outside and the delivery is free.
Sometimes quality products are cheaper than those of superstores, they added.
According to the industry insiders, the country has around 200 e-commerce websites and at least 3,000 F-commerce (Facebook commerce) sites.
They, however, could not mention the actual business of the sector, but said that an annual e-commerce sale is estimated at about Tk 2.0 billion.
In Pakistan, e-commerce is growing at 30 per cent a year while it is 28 per cent in India, but in Bangladesh, the rate is less than 10 per cent, they added.
Though e-Commerce made its entry to the country in late 90s, it was then used for distributing gift items by local affiliates of the overseas sites.
Online shopping gained momentum in 2011 after the Bangladesh Bank cleared way for payment by debit and credit cards in local currency, industry insiders said.
Though payments can now be made online through cooperation between e-commerce websites, bkash and banks, they still account for a small proportion of payments in the country. Most firms collect payment on delivery.
Fraudulent activities are a threat that might discourage the shoppers, which the industry people claimed is done by the third-party engaged in delivering the products.
To operate a website, one needs a domain name-- an identification that defines a sphere of administrative autonomy, authority or control within the internet and web-hosting service that allows individuals and organisations to make their domain or website accessible via the World Wide Web (www).
Local companies charge Tk 800 to Tk 1,500 for a domain registration as well as renewal fee while web-hosting charge depending on space on internet and internet speed ranges from Tk1,000 to Tk 0.25 million.
More than a dozen companies in the world are dominating domain registration business who got licence from 'www', based in the US. The companies in Bangladesh operate as resellers or agents of the big companies like go daddy, iPage, web.com, justhost.com, bluehost, Fat Cow.
In Bangladesh, among 1,000 companies, 20 big companies including the BTCL control majority of the domain business.
Though the sector has immense potential to grow, leaders of e-CAB and BASIS e-commerce alliance argued that the proposed 4.0 per cent VAT will adversely affect the sector, saying it will create problems for local entrepreneurs.
"This is not the right time to impose any kind of tax or VAT on e-commerce sector," Mr Mashroor, also convener of BASIS e-commerce alliance. said.
Terming the large-scale investment by the multinational companies in the country's growing online market another challenge, he said adding it has become a major obstacle to the development of local entrepreneurs.
He expressed concern about the multinational companies' control over local e-commerce market, saying it might discourage the local entrepreneurs.
The sector needs government policy support including tagging post offices with e-commerce companies so that the rural people can get products at their door steps, Mr Ahmed said.
It is time that the government starts recognising e-commerce as a completely separate and independent industry, he added.
They called upon the government and other policymakers to devise a local entrepreneur-friendly investment policy to help them grow and withdraw the proposed VAT.
Officials at the online markets said the concept has opened up opportunities for third-party vendors, who serve between the sellers and the customers.
Thus, new jobs are being created in the country.
At present, 10,000 to 15,000 people are involved with the sector, which would create employment for more than 0.2 million within the next five years, they said.