LightCastle Partners (LCP) has launched a report titled – ‘The Rise of Digital Consumer Class In Bangladesh’. The report was disclosed at a press conference that was held at EMK center on Thursday, 21st January. SD ASIA was the media partner of the event.
The report is about the technology users and the rise of digital consumer in Bangladesh.
To help the technology businesses have a better understanding of this surging population base, Lightcastle Partners (LCP) conducted an online study with over 450 respondents in Dhaka, Chittagong, and Sylhet–three developed markets in the country. Coming from emerging middle, and the middle and affluent class (Monthly income within USD 251-650 range) households, around 64.4% of these respondents are aged 20-40 with 35% representation from 20-30 year age group.
Few Snapshots From The Report:
Bangladeshi Digital consumer Class:
Keeping the consumer decision-making process in mind, LCP has identified four major categories between Bangladesh’s digital respondents. They are:
1. Early Starters: 51% of our respondents are Early Starters. 26% of them are from Chittagong, rest live in slightly established areas in Dhaka.
2. Digital Aspirants: Concentrated in Dhaka, digital aspirants are one step closer to being truly digital. Around 19% of our respondents purchase low-cost items (clothing, baby products etc.) online and prefer Cash on delivery as the primary payment option.
3. Traditionalists: 23% of our respondents are receiving product information online and are dependent on physical options for product evaluation and purchase/ payment. Living in growing neighborhoods of Chittagong, Sylhet, and Dhaka, they spend more time online for communication purposes only.
4. Connected Maestro: Though it is comprised of roughly 7% of respondent base, connected maestros have the highest potential to create an impact. With 100% respondents having access to laptops and smartphones, this group also involves families’ chief wage earners, preferring online/ mobile payments for online purchases.
Ecommerce Sites Consumers Of Bangladesh:
Right now, E-commerce sites are getting more visitors than ever. According to LCP’s survey on Digital Consumers, in 2015, ekhanei.com was the most popular e-commerce site among Bangladeshi users (21% of the total user). Then other sites came second with 18% share. Bikroy.com ranked third with 17% share.
The majority of e-commerce business in Bangladesh fall under C2C (consumer to consumer) transaction business model, where a consumer sells products to another consumer. Companies like Ekhanei.com, Bikroy.com, Priyoshop.com and daraz.com are the top players. A growing number of B2C (business to consumer) e-commerce sites also operate their businesses in Bangladesh, most of which are existing businesses adding an online shop front. However, there are also social media exclusive firms as well. B2B (business to business) transaction-based businesses in Bangladesh are the least prevalent form of e-commerce business in Bangladesh. Most companies operating in the RMG sector utilize B2B online transaction to do business with foreign firms.
E-Commerce Spending Behavior Of Bangladeshi Consumers – Frequency and Preferred Purchase Timings:
With Stronger security protocols, easier transaction facilities achieved with assistance from banks and trusted logistic companies, consumers are becoming more conducive to online transactions. This has resulted into more frequent transactions (once a day-18% and once a week-22%) with most of the purchases concentrated on weekends (33%). Also, this has helped establish the trend to purchase via e-commerce platforms all year round (37%). However, during the religious festivals like Eid, Puja, Christmas (27%) and other cultural festivals like Bengali and English New Year (20%) most of the digital middle and affluent consumers prefer to shop via e-commerce platforms.
As the research suggests, the digital consumers spend, on an average, BDT 1000 to 10,000 (28%) per visit. This is understandable, as Fashion-wear (22%) and Fashion accessories (18%) are the most bought items from these e-commerce sites.
Most of the Bangladeshi users spend 501-1000 BDT to buy products from e-commerce sites (29.60%). The report also suggests that only 9% users brought products from e-commerce sites worth more than 1000 BDT.
With the central bank’ step to allow the implementation of e-payment gateways in 2009, e-commerce businesses have proliferated rapidly though many B2C businesses, operating under the hybrid model and incorporating “cash on delivery (COD)” mechanisms. Given that large majority of the consumers would still prefer “COD” (67%) – the trend is likely to continue. However, mobile payment gateways, if correctly leveraged, can be promising alternatives – 32% of the respondents would like to use mobile payment gateways with a more easy-to-use mobile wallet option.
With the advent of 3G internet, coupled with the proliferation of smarter gadgets and availability of secured and flexible mobile financial services, E-commerce industry in Bangladesh is poised for exponential growth – the research also suggests that 38% of the middle and affluent consumers would definitely like to increase their online purchases in the next year.
Comparing current trend for online purchase with intention to go digital in the future over different product categories gave some interesting insights
• Within next 12 months, a significant portion of traditionalists and early starters are going to shift from “See online and buy retail” trend and move to “Digital Aspirant” group for more than a couple of items.
• Roughly 4% of the consumers surveyed said they purchase Consumer Electronics and Grocery items online. However, considering the current consumption trend, these are the categories accumulating the highest growth rate in the near future.
• The conversion rate for consumers seeking digitized food services remains almost similar – indicating a need for expanding business in emerging regions as a long-term business strategy.
• People are willing to move online for high-value purchases/leasing such as Home/Apartment as well. Traditional real estate businesses could consider this as an important indicator for some transformation.
Bijon Islam, CEO of LightCastle Partners said about the report, “Since consumers are on the digital space and interact with each other via online channels it is only natural that reaching out in that space would yield the best business results. So it’s time you start interacting with the digital side of your target market as with time that is where they will make their purchases.”
The importance of having a digital strategy for the future has become apparent from the study and exhibits business categories that are ripe for moving into electronic space.
If you want to get access to a soft copy of the report, please fill out the short form here- http://goo.gl/D6I04f
Source : sdasia.co