Digital Cattle Stores and Full Qurbani Service: COVID-19 disrupts a stubbornly Traditional Market

    LightCastle Analytics Wing
    LightCastle Analytics Wing
    Digital Cattle Purchase

    From being dependent on neighboring countries for shortages to be more than able to meet local demand, the cattle market of Bangladesh has undergone a complete transformation in recent years. It now contributes 1.47 percent of the GDP and directly employs 20 percent of the workforce.[1] 

    The market gets the spotlight every year during the Islamic festival of Eid ul-Adha when cows, goats, sheep, buffalos, and camels are slaughtered on the occasion. This is the most lucrative season for cattle sales, and farmers work for a year or more to rear and fatten their cows in order to sell during this time. The festival also brings the spice and tannery industry in focus as well. Thus, the Eid cattle market in Bangladesh is highly important to the overall economy.

    COVID-19 causing disruption in demand but supply remains steady

    The government of Bangladesh declared a public holiday from March 25 that extended up to May 30 to control the spread of the coronavirus. As a result, most businesses were closed for the two month period. Employees thus could not earn a livelihood. A study by BRAC in June showed that the shutdown resulted in 95 percent of people across the country to lose their income fully or partially.[2] 

    The loss of income means that most people may not be able to afford to buy a cow to sacrifice this Eid ul-Adha – they will compensate by buying a less costly goat or not make a sacrifice at all. Thus, the demand for cattle is expected to be lower in comparison to previous years.

    At the same time, given the longer production cycle, the supply of cattle has not been affected by the current COVID-19 pandemic crisis. This is because cows are reared for more than a year before they are sold to the market. The number of cattle has increased steadily over the years- from 22.98 million in FY 2008-09 to 24.24 million in FY 2018-19.[1]

    Figure: Cattle population of Bangladesh (in millions)/Source: Department of Livestock Services

    Most of the cattle reared are sold for the occasion of Eid ul-Adha. According to Bengal Meat, one of the largest meat processors in Bangladesh, 30% of the country’s annual cattle sales take place during this occasion. The Department of Livestock estimates that the number of livestock suitable for sacrifice this year to be 1 crore 18 lakhs 97 thousand 500 out of which 45 lakh 38 thousand are cows and buffalo.[3] 

    Digital “Haats” are rising and increasing operations

    Every year, makeshift cattle markets (popularly known as “Haat”) are established where buyers go to buy animals for sacrifice. This year, the number of people buying at the physical Haats may be less as a lot of crowding takes place in these places and people will want to adopt social distancing measures. Authorities are also allowing a fewer number of cattle markets under the current scenario, particularly in Dhaka city where social distancing measures are more strictly enforced. 

    The circumstances have thus given rise to many digital platforms for buying and selling cattle online. E-commerce stores such as Daraz, Bikroy.com, and Shuddho Krishi (an online agriculture produce shop based on Facebook) used to sell cattle and goats online over the past few years. This year, these stores are increasing their capabilities in order to cater to a market shifting online due to the pandemic.[4]

    The emergence of “Full Qurbani Service”

    Many residential areas in Dhaka city are voluntarily banning the usual open slaughter of cows this Eid to maintain social distancing. As a result, online businesses have emerged that are offering customers to outsource all rituals and practices associated with the sacrifice. Known as “Full Qurbani (sacrifice) Service,” the services include buying and maintaining cattle for sacrifice, arranging the slaughter, cutting and processing the meat, and delivering it to customers’ homes and even down to donating. 

    Such a service is being provided by both government and private entities. Dhaka North City Corporation (DNCC) has launched “DNCC Digital Haat” jointly with the ICT Division, E-Commerce Association of Bangladesh (e-CAB), and Bangladesh Dairy Farm Association. Using the platform, the whole process involved in the Eid ul-Adha sacrifice to be completed online.[5] Customers can buy their cattle of choice from the platform and the latter will take care of the rest. 

    Bengal Meat had provided Full Qurbani Service for the past six years. This year, the company launched a separate online portal to provide the service. Full Qurbani Service is also being provided by Sheba.xyz and Madol, an e-commerce company based on Facebook.[6]

    Full Qurbani Service has already been popular in other Muslim majority countries. In the UAE, for example, Meat One, a Pakistan-based online butcher store with a franchise in the country, has been providing the service since 2019.[7] The company also has such operations in its home country as well. The circumstances brought about by COVID-19 has given such services to gain popularity and acceptability in Bangladesh this year.

    Time for digital cattle market to shine

    Bangladesh’s e-commerce market got a huge boost in March of this year as the COVID-19 pandemic forced people to stay indoors. As a result, the e-commerce market got its much-needed mass acceptability. The digital cattle market seems to follow the same track as well.

    The digital cattle market of Bangladesh consists of both formal and informal players. Formal players include Bengal Meat, Daraz, Bikroy.com, DNCC Digital Haat, Sheba.xyz, and other e-commerce platforms. Informal ones include businesses operating solely on Facebook (popularly known as F-commerce stores) and are usually small-scaled and scattered.

    Out of the formal platforms, Bengal Meat, Daraz, and Bikroy.com have been in the digital cattle market for almost the previous six years. Data from Bikroy.com, the market leader, shows sales volume increased by 26 percent from 2018 to 2019.[8] Using available data and primary interviews with management of the three companies, LightCastle Partners has estimated the projected sales for these three major outlets for this year’s Eid-ul-Adha:.

    Name of CompanyAverage Selling Price (in BDT thousands)Projected Sales Volume (in number)Projected Sales (in BDT millions)
    Daraz120 to 16020025 to 30
    Bengal Meat93 to 11540037 to 45
    Bikroy130 to 1603700445 to 556
    Total for the three companies3300507 to 631
    Table: Sales projection for the top three digital cattle market for Eid ul-Adha 2020 / Source: LightCastle Estimates

    As per LightCastle projections, the online cattle sales for these three cattle companies alone will total up to BDT 631 millions (approximately USD 7.5 millions). By its most conservative estimate, Bikroy.com expects cattle sales this year to go up by 17 percent.

    This calculation does not factor in the sales from newer platforms such as the DNCC Digital Haat and f-commerce platforms, which while more informal, nevertheless represent the overall market scenario. There are strong reasons to thus believe that the digital cattle market of Bangladesh will eclipse BDT 800 million (USD 9.4 millions) in Eid-ul-Adha 2020. 

    The way ahead: A future where the cattle market is fully digitalized

    Much as in other facets of life, the Covid pandemic has driven a shift towards digitalization in the way people purchase online. The cattle market is no exception and the various restrictions and social distancing measures brought upon by the  pandemic has provided Bangladesh’s digital cattle market with a major opportunity to scale up.

    While many see this growth of the digital cattle market as a temporary blip, there are reasons to believe that the COVID-19 will have a lasting effect in how Bangladeshis approach Eid-ul-Adha. It may usher in an era of digital cattle sales and perhaps more importantly, mainstream the Full-Qurbani service that had been long adopted by other Muslim nations in favour of the outdated and relatively un-sanitary self-preparation methods that had been widely used in Bangladesh.

    Farhan Uddin, Content Writer at LightCastle Partners, has prepared the write-up. For further clarifications, contact here: [email protected]

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    LightCastle Analytics Wing

    LightCastle Analytics Wing is the research division of LightCastle Partners. It is tasked with producing periodic reports on the different sectors of the economy, analyzing trends in markets and making methodical, thorough and intelligent analysis to improve strategy and drive business growth.