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%. The majority of the population of Bangladesh is 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 an e-KYC system by December 2020. The first three quarters of 2020 saw U$ 65 Bn+ transactions 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 potential.

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 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 in the future economy of Bangladesh?

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

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

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

WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a data-driven approach to create opportunities for growth and impact. We consult and collaborate with development partners, the public sector, and private organizations to promote inclusive economic growth that positively changes the lives of people at scale. Being a data-driven and transparent organization, we believe in democratizing knowledge and information among the stakeholders of the economy to drive inclusive growth.

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