Payza, first ever e-wallet in Bangladesh, along with Bangladesh Commerce Bank Limited, is offering 21% discounts on all products of popular e-commerce sites of Bangladesh till end of February.
After the five *BRICS countries, economist Jim O’Neill identified a second group of eleven countries with a high potential of becoming among the world’s largest economies in the 21st century. One of these “Next Eleven” is Bangladesh, a South Asian country of 161 million people.
As the first and largest e-wallet provider to operate in the country, Payza has a close relationship with Bangladesh. We’ve invested heavily in the local e-commerce market and we are proud to say our investment has paid off for Payza and Bangladeshis alike. Today, the online retail market is growing more rapidly than ever and there couldn’t be a better time for international sellers to expand their business into this exciting country.
Unless otherwise noted, figures in this article are sourced from:
- Ahmed Saad Ishtiaque and Adib Sarwa; University of Liberal Arts Bangladesh
- Lh Jewel; Digital Marketing Bangladesh
- Ministry of Foreign Affairs Denmark; Bangladesh eCommerce Country Fact Sheet
- Internet penetration:5% penetration
- Mobile penetration: 23%
- Online shoppers: 5 million
- E-commerce sales: USD 38.1 million
- E-commerce annual growth rate: 200%+ (2013-2016)
Despite its relatively small size, Bangladesh is the eighth most populous country in the world, fifth in Asia, and third most populous Muslim-majority country. It’s also one of the world’s most densely populated countries with triple the density of neighboring India. The country’s primary language, Bengali, is the seventh most spoken language in the world.
If you visit Bangladesh today, you will not find the impoverished country it once was. Instead, you will step out of the airport to find a vibrant consumer culture, fresh from celebrating the 45th anniversary of Bangladeshi independence. Between 1990 and 2014, the country’s poverty rate went down by more than half, with the rate of extreme poverty dropping to 12.9% in 2016, a remarkable achievement in poverty reduction.
The new emergence of a consumer class in Bangladesh has led to a 72% growth in e-commerce transactions over the course of 2016, with business-to-consumer (B2C) accounting for 90% of all transactions. With over 60% of online shoppers between the ages of 25 and 34, the market is young and tech-savvy, though cash-on-delivery still remains the most common payment method.
Besides the usual success of online hotel and travel bookings, the most popular e-commerce categories for Bangladeshi consumers are electronics, books, clothing and, uniquely, food. Online food delivery platforms such as Foodpanda and HungryNaki have gained an impressive following in the last few years, while online grocery shopping platforms Chaldal and Direct Fresh are also experiencing strong growth.
Drivers and Barriers
Driver: Emerging Consumer Class
Today, only 7% of the country’s population is classified as middle or affluent class (MAC), but that number is rapidly rising. More importantly, consumer wealth is being dispersed regionally, with projections indicating that the number of cities with MAC populations over 100,000 will double within the next ten years.
Barrier: Debt Concerns
When markets shift out of poverty, there is always an increased level of consumer wariness. The new influx of disposable income in Bangladesh has made consumers optimistic – 60% expect their incomes to rise this year – but also wary of going into debt for fear of not being able to repay it.
While most transactions are still in cash, two-thirds of MAC consumers in Bangladesh own Internet-enabled smartphones, allowing them to make the leap to mobile payments. Mobile banking is already quite popular, as is researching products prior to purchase, allowing the opportunity for retailers to reach Bangladeshi consumers via m-commerce.
While brand loyalty is good for e-commerce as a whole because it brings in repeat customers and builds trust, it does make it more challenging for new market entrants. However, while Bangladeshi consumers cite brands as a top motivating factor for their purchases, they are also budget and quality conscious. Retailers new to Bangladesh can attract customers by undercutting the established competition or offering a better-made product.
Bangladeshi E-Commerce Facts
- One of the fastest-growing markets worldwide.
- Rapid upward mobility: over 30 million more Bangladeshis are expected to make the leap out of poverty by 2025.
- Total e-commerce transactions grew by 72% in 2016.
- Total m-commerce market value doubled in 2016.
- Two-thirds of all e-commerce traffic comes from the two largest cities, Dhaka and Chittagong.
- 49% of online shopping traffic comes from new customers.
What we are witnessing in Bangladesh is an example of the leapfrog effect. A young and newly affluent population is rapidly adopting e-commerce, primarily by leaping straight from cash payment to online shopping via their mobile devices. While internet and mobile penetration are still relatively low and poverty relatively high, both of those facts are changing rapidly and experts agree that the market potential of Bangladesh is one of the highest in the world. By investing in this growing market, retailers can get a leg up on the competition and start building brand loyalty.
Expanding into a new international market is a risky venture but a very rewarding one if done right. For the latest information about how you can build and maintain a strong e-commerce enterprise and keep it compatible with legislation and buying habits at home and abroad, subscribe to the Payza Blog and follow us on Facebook and Twitter for the latest industry news.
*BRICS countries: Brazil, Russia, India, China, South Africa.
Payza Bangladesh signed and agreement with SSLCOMMERZ, an online payment gateway service of SSL Wireless on September 29, 2016, at Casada corporate office, to offer an enhanced online payment solution in Bangladesh.
This partnership will give Payza members access to over 400 different categories of local e-commerce merchants of SSLCOMMERZ, such as lifestyle, e-shop, travel and aviation, hospital, digital services, online ticket, food delivery, universities, and others. Customers can enjoy easy and instant check out, while shopping online from hundreds of websites by simply logging into their Payza e-wallet through SSLCOMMERZ. Additionally, this will enable customers to use web based mobile top up services.
“Our main focus is to grow and enhance online payments in Bangladesh and that is why we are very excited to be in accord with SSL as it will create more options in the growing e-commerce industry of Bangladesh,” said Nafis Ehtisham, Head of Operations, Marketing and Sales.
Digital World 2015, this year’s edition of Bangladesh’s annual technology and e-commerce conference will take place from February 9 to 12 at the Bangabandhu International Conference Center in Dhaka, the nation’s capital. The event gathers government officials, policy makers, captains of industry, academics, investors and international development agencies.
Mr. Rahman, Senior Vice-Chairman of Casada Technology Ltd, Payza’s authorized agent in Bangladesh, will be in attendance and representing Payza at Digital World’s E-Commerce Expo to discuss the exciting advancements in online payment processing and money transfer solutions Payza is bringing to Bangladesh’s rapidly developing e-commerce environment. Mr. Rahman will also be giving a presentation entitled Next Generation Ecommerce: Prospect and Challenges on February 12, beginning at 11:00 AM local time.
Payza and Casada are currently in the final stages of testing a bank transfer feature that will allow Payza members in Bangladesh to add and withdraw funds to and from their online account at the lowest cost possible. Currently there are close to 1000 Bangladeshis that have connected their bank accounts to their Payza account in anticipation of this new feature!
Mr. Rahman looks forward to speaking with ambitious Bangladeshis at the event to discuss Payza’s vision of The Future of e-Commerce in Bangladesh. “Our goal is still to merge the world Bangladeshis already know with the online world that is developing right in front of our eyes,” explained Mr. Rahman. “The people that attend Digital World are exactly the type of people that will be forging this new, digitally connected Bangladesh and we are excited to meet with them, hear their ideas and share our own in order to better play our part in this incredible undertaking.”
Casada and Payza are positioned to play a major role in Bangladesh’s e-commerce scene. Payza has offered services in Bangladesh since the company opened in 2012, taking special interest in the developing nation that is home to more than 150 million people. As part of its commitment to ecommerce in Bangladesh, Payza has formed a partnership with Bangladesh Commerce Bank to give Bangladeshis a fast and simple way to add and withdraw their online money.
“Casada and Payza have made a commitment to not only be a participant in Bangladesh’s e-commerce environment, but to be a driving force behind it,” Mr. Rahman added. “The Bangladeshi people have a great partner in Payza that will help bring this country forward into the digital age.”