Digital Commerce in Bangladesh: Policies and Possibilities

LightCastle Analytics Wing
January 26, 2021
Digital Commerce in Bangladesh: Policies and Possibilities

Bangladesh’s digital commerce industry is gaming forward on the back of the following growth drivers:

Strong Economic Vitals for Tech Products and Services
Despite the pandemic, Bangladesh till Sep 2020 has clocked a GDP growth rate of 5.2% (ADB, 2020) – one of the highest in Asia – much ahead of South Asia’s average growth rate of -6.8% or compared to India’s -9% or Sri Lanka’s -5.5%. Majority of the population of Bangladesh are young and tech-adaptable, where 62%+ are under 35 years. The Middle class is growing at 10% per annum to reach 34 million by 2025.  Increasing adoption of digital services with 110Mn+ internet users (95% on mobile devices), 40Mn+ on smartphones (BTRC & GSMA, 2020).

Growth in Digital Transaction Embracement
Digital services in the financial sector are slowly expanding. The Covid-19 pandemic has added momentum to them. Private banks have scaled up their digital services during the pandemic. As part of digitization, each bank has to launch e-KYC system by December 2020. The first three quarters of 2020 saw U$ 65 Bn+ transaction with 72% of the market dominated by mobile banking. With 96Mn Registered users and U$ 202Mn daily MFS transactions, digital transactions will unlock the digital commerce industry’s potentials.

E-Commerce Market Grows at a Steady Pace reaching USD 2.1 Bn
All online-based platforms that mainly retail everyday essentials have experienced remarkable business growth during the pandemic, shooting the eCommerce market (including f-commerce) at a steady pace to U$ 2.1Bn in 2020. The sector has connected 1,200 e-commerce companies, 60,000 SMEs (35,000 individuals; 25,000 enterprises), among which are 2,000 web-based and 50,000 active f-commerce merchants. In the next five years, the country’s e-commerce sector can create around five lakh jobs and holds the potential to be a key driving force of the economy.

Pandemic propelling Digital Transformation in all sectors
The COVID-19 pandemic has undeniably altered consumer buying behavior, wherein traditional retailing has taken a back seat. An exemplar shift towards a more digitized world is evident, with prompted changes in spending habits are likely to have long-term ramifications. High priority sectors poised for growth and digital transformation in the coming decade show early promises, including Pharmaceuticals, Agriculture, ICT/ITES, Logistics, and Digital Financial Services.

Can the Digital Commerce Industry become a critical driving force of the future economy of Bangladesh?

LightCastle Partners presents “Digital Commerce in Bangladesh: Policies & Possibilities”

1. Bijon Islam, CEO, LightCastle Partners
2. Mehad ul Haque, Project Manager and Senior Business Consultant, LightCastle Partners
3. Silvia Rozario, Project Manager and Senior Business Consultant, LightCastle Partners

To learn more about the Digital Commerce Landscape of Bangaldesh Document download full report

WRITTEN BY: 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.

For further clarifications, contact here: [email protected]

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