Assignment on E-commerce in Bangladesh

ASSIGNMENT ON E-COMMERCE IN BANGLADESH

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Table of Contents Ecommerce .....................................................................................3 History of E-Commerce....................................................................3 Why e-Commerce for Bangladesh……………………………………………….4 Bangladesh……………………………………………….4 Traditional and Electronics Business Transaction ............................5 Traditional Commerce vs e-Commerce............................................3 Dimensions of E-Commerce .............................................................6 Business to consumer(B2C) ..................................................7 Business to Business (B2B) ...................................................7 Business to Government(B2G) Government(B2G) ........................... ...................7 Benefits of E-Commerce ...................................................................7 e-Commerce in Different Different Sector in Bangladesh ................................8 ....................... .........8 Overview of implementation stage stage of e-Commerce e-Commerce in Bangladesh 8 Some e-Commerce shop in Bangladesh ............................................9 The impact of e-Commerce ...............................................................9 Constraints to E-Commerce in Bangladesh......................................10 Challenges of E-commerce for Bangladesh......................................11 Recommendations………………………………… Recommendations……… ……………………………………………………… ……………………………………11 ………11 Conclusion........................................................................................12 References………………………………………………………………………………….13

|| E-Commerce in Bangladesh ||

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Ecommerce refers to the buying and selling of products or services over electronic systems through Internet and other computer networks. networks. The most popular medium in which e-Commerce is conducted is the internet. It combines a range of process such as: 

Electronic Data Interchange (EDI)

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Electronic mail (E-mail)

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World Wide Web (WWW)

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Internet Applications

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Network Applications

It does not include include transactio transactions ns over telephone, fax or any payments made online for transactions whose terms were negotiated offline or by physical means. Some Some comm common on appl applic icat atio ions ns rela relate ted d to elec electr tron onic ic comm commer erce ce are are the the following:           

Email Enterprise content management Instant messaging Newsgroups Online shopping and order tracking Online banking Online office suites Domestic and international payment systems Shopping cart software Teleconferencing Electronic tickets

History of E-Commerce 

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In 1950‟s companies began to use computers to store and process internal transaction records. By 1960‟s businesses that engaged large volume of transaction had began exchanging transaction information on punched card. In 1968 1968 Transp Transport ortati ation on Data Data Co-ord Co-ordina inatio tion n Commit Committee tee (TDCC (TDCC ) was formed by some companies.


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In 1979 ANSI (American National Standards Institute) chattered a new committee to develop uniform EDI (Electron Data Interchange). In 1979: Online shopping was invented in the UK by Michael Aldrich. Aldrich . In 1982 1982:: Minitel was was intr introd oduc uced ed nati nation onwi wide de in Franc France e by Fran France ce Telecom and used for online ordering.

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In 1984: World's first recorded B2C online home shopper. Mrs Jane Snowball uses the Gateshead SIS/Tesco system to buy groceries.

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In 1987: 1987: Swreg begins begins to provid provide e softwa software re and sharew shareware are authors authors means to sell their products online through an electronic Merchant account.. account

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In 1990: Tim 1990: Tim Berners-Lee writes the first web browser, WorldWideWeb WorldWideWeb,, using a NeXT computer.

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In 1992: J.H. Snider and Terra Ziporyn publish Future Shop: How New Technologies Will Change the Way We Shop and What We Buy. St. Martin's Press. ISBN 0312063598. 0312063598 .

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In 1994: Netscape releases the Navigator browser in October under the code name Mozilla Mozilla.. Pizza Hut offers pizza ordering on its Web page. The The first first online online bank bank opens. opens. Attemp Attempts ts to offer offer flower flower deliver delivery y and maga magazi zine ne

subsc subscri ript ptio ions ns

onli online ne..

Adult

mate aterials als

also also

bec become ome

comm commer erci cial ally ly avai availa labl ble, e, as do car cars and and bike bikes. s. Netscape 1.0 is introduced in late 1994 SSL encryption that made transactions secure. 

In 1995: Jeff Bezos launches Amazon.com and the first commercial-free 24 hour, hour, inter internet net-on -only ly radio radio statio stations, ns, Radio Radio HK and NetRadio start broadcasting. Dell and Cisco begin begin to aggress aggressive ively ly use Inter Internet net for commercial transactions. eBay is founded by computer programmer Pierre Omidyar as AuctionWeb.

Why e-Commerce for Bangladesh With With the incre increasi asing ng diffus diffusion ion of ICTs, ICTs, more more specif specifica icall lly y the Inter Internet net,, the global business community is rapidly moving towards Business-to-Business (B2B) e-Commerce. The buyers/ importers gain a clear advantage when the Internet gives them access to the global market, by which they can compare


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prices across regions, find out whether prices vary by order fragmentation, get aware awarenes ness s about about substi substitut tute/ e/ alter alternati native ve produc products. ts. Conseq Consequen uently tly,, the sellers/ exporters make sure that they are well portrayed in the cyber world through websites and portals. Like buyers, sellers also benefit from increased and and more more effi effici cien entt acce access ss to the the glob global al mark market et thro throug ugh h the the Inte Intern rnet et.. Bangladesh is pursuing an economic policy of export-led growth. With the rising forces of globalization, it is becoming increasingly important that the private sector, particularly the export sectors are well prepared to meet the requirements and expectations of the importers and also stand out in the competition against exporters in other countries. In such a scenario, two issues are becoming particularly important for Bangladeshi export sectors – one, whether businesses are automating their internal processes with the use of ICTs ICTs to become become increas increasing ingly ly effici efficient ent and compet competiti itive ve in a global global cont contex ext, t, and and two, two, whet whethe herr busi busine ness sses es have have effe effect ctiv ive e pres presen ence ce and and participation in the cyber world. International organizations such as UNCTAD (United Nations Center for Trade and Development) and WTO (World Trade Organization) have, over the last several years, put much emphasis on the importance of e-Commerce for developing countries. UNCTAD has special programs to facilitate developing countries to transition into e-Commerce. The WTO has also developed rules and guidelines for global e-Commerce transactions.

Traditional and Electronics Business Transaction The The busi busine ness ss proc proces esse ses s are are broa broadl dly y divi divide ded d into into five five main main cate catego gori ries es namely: 

Market product and services

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Sell and deliver products and services

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Process payments

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Manage relationship

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Manage the enterprise

Traditional Traditional

e-Commerce

Traditional Traditional Commerce || E-Commerce in Bangladesh ||

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Comme Commerce rce vs. vs. eCommerce Items Sales Channel

•

Enterprise  Internet 

Consumer

•

Manufacturer

Wholesaler RetailerConsumer

Sales

Hour

/Region

•

Entire world

•

Restricted area

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24x7

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Restricted

sales

Sales

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Market space (Network)

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hour Market space (store)

place/method

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Sale based on

•

Sale

•

display Mark Market et surv survey ey and

Customer

•

information acquisition

Any

time

acquisit sition

through internet •

•

Digita Digitall Data Data withou withoutt no

activity

1:1

on

salesman •

re-entry Marketing

based

Require Require informati information on re-entry

Marke arketi ting ng via bibi-

•

directional

One way market marketing ing to consumer

communication Customer

•

support •

Real eal tim time supp suppo ort for for

•

Delayed support for

customer Dissatisfaction

customer

Real time acquisition of

Dissatisfaction

customer needs

•

T Tim ime e

diff differ eren entt

catc catchi hing ng

for for

cust custom omer er

needs

Capital

•

small

•

large


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Dimensions of E-Commerce The three dimensions of e-commerce are: Business-to-Consumers (B2C) Business-to-Business (B2B) Business-to-Government (B2G) B2C B2C e-co e-comm mmer erce ce is unli unlike kely ly to be of much much use use in the the near near futu future re in Bangladesh because of low per capita income, a weak infrastructural and legal environment, lack of trust between business and consumers. B2C for cross border trade is also limited by the factors suggested for the domestic front. front. In additi addition, on, non-av non-avail ailabi abili lity ty of inter internat nation ional al credit credit cards, cards, forei foreign gn currency remittance restrictions, delays and informal payments at customs clearance even for small value and quantity items will discourage B2C.

Business to Consumer (B2C) Where enterprises sell directly to the customer, often cutting out wholesalers or retail outlets. B2C is the most commonly understood form of internet business www.muktobazaar.com most most succ succes essfu sfull tradi trading ng has has been been with with standard products such as CDs, Books, Software, downloadable music etc. Business to Business (B2B) It is larger, growing faster. This includes procurements of raw materials and suppli supplies, es, liais liaison on with with contra contracto ctors, rs, sales sales channe channels, ls, servi servicin cing g custom customers ers,, coll collab abor orat atin ing g with with part partne ners rs,, inte integr grat ated ed manag anagem emen entt with with data data and and knowledge. Business to Government (B2G) Here business trade directly with government offices and agencies for public procur procureme ement nt (e.g. (e.g. suppli supplies es for hospit hospitals als,, school school and other other gover governme nment nt contracts. Consumer to consumer (C2C) Online transaction between private individuals. There are many sites offering free classifieds, auctions, and forums where individuals can buy and sell thanks to online payment systems like PayPal where people can send and receive money online with ease. eBay's auction service is a great example of where person-to-person transactions take place everyday since 1995.

Benefits of E-Commerce The benefits of e-Commerce are many and many. Some of them include:


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24X7 operation: Round the clock operation is an expensive proposition in the brick and mortar world while it is natural in the click and conquer world Global Global reach reach:: The The net net bein being g inhe inhere rent ntly ly glob global al,, reac reachi hing ng glob global al customers is relatively easy on the net compared to the world of bricks Cost Cost of acqu acquir irin ing g serv servin ing g and and reta retain inin ing g cust custom omer ers: s: It is rela relati tive vely ly cheaper to acquire new customers over the net. Thanks to 24 X 7 oper operat atio ion n and and its its goal goal reac reach. h. Thro Throug ugh h inno innova vati tive ve tool tools s of push push technology to retain customers, loyalty with minimal investments. An exte extend nded ed ente enterp rpri rise se is easy easy to buil build: d: In toda today‟ y‟s s worl world d ever every y enterprise enterprise is a part of the „connected „connected economy‟; economy‟; as such you need to extend extend your your enterp enterpri rise se all the way to your your suppli suppliers ers and busines business s partners like distributers, retailers and ultimately you end customers. Internet provides an effective (often less expensive) way to extend your enterprise beyond the narrow confines of your own organization. Too Tools ls like like enter nterpr priize resou esourrce plan planni ning ng (ERP ERP) ,sup ,suppl ply y chain hain management management (SCM) (SCM) and customer customer relationshi relationship p managemen managementt (CRM), (CRM), can easily be deployed over the net permitting amazing efficiency in time time need needed ed to mark market et,, cust custom omer er loya loyalt lty, y, on time time deli delive very ry and and eventually profitability. Dis-i Dis-int nter erme medi diat atio ion: n: Using Using the the net net one one can can dire direct ctly ly appr approa oach ch the the customers and suppliers, cutting down the number of level sand in the process, cutting down the costs. Impr Improv oved ed cust custom omer er serv servic ice e to your your clie client nts: s: It resu result lts s in high higher er satisfaction and more sales Power to provide the ‘best of both the worlds’: It enhances traditional along with internet tools.

E-Commerce in Different Sector in Bangladesh Desp Despit ite e bein being g a unde underr deve develo lope ped d coun countr try, y, sele select cted ed segm segmen ents ts of the the Bangladeshi business community has embraced technology with reasonable success. The Facsimile in the 1980‟s and mobile telephones in the 1990‟s popularized modern technology in the mass market. Personal computers and the Internet are also emerging as day-to-day business tools. These positive indicators are favoring the prospects of e-commerce in Bangladesh.


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RMG Sector

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Banking on the Web (Online Banking)

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Online Shopping

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Web Hosting, Domain

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Online cards, gifts

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Pay Bill

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Education

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Etc.

Overview of implementation stage of e-Commerce in Bangladesh Minist Ministry ry of Commer Commerce, ce, Minist Ministry ry of Inform Informatio ation n and Commun Communica icatio tion n and Planning Commission jointly implementing the e-commerce in Bangladesh  There is e-Commerce committee headed by commerce secretary 

Ministry of Information and Communication is working for enacting a law regarding “Electronic Transaction act”

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Online order from foreign buyer has started s tarted

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www.re www.regis gistra trarof rofcom compni pniesb esbangl anglade adesh. sh.com com here here regis registra tratio tion n of joint joint stock company started as online

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Online non-financial transaction has started by all bank from 31-7-2002

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Intra-bank transaction started from 31-7-2003

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Some bank already started credit card system in a limited way

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About 2 months Bangladesh Bank give permission of Ecommerce in local currency through banks within the country.

Some e-Commerce shop in Bangladesh www.webbangladesh.com


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www.haatbazar.com www.number1shop.com www.bdbazar.com www.bengalcommerce.com www.sonarmarketplace.com www.upoharbd.com www.bdgift.com www.cellbazaar.com

The impact of e-Commerce 

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E-commerce can transform the way products and services are created, sold and delivered to the customers. It can also change the way in which the company works with its partners. The followings are well established benefits of e-commerce: Improved productivity: Using e-commerce, the time required to create, transfer and process a business transaction between trading partners is significant significantly ly reduced. reduced. Furtherm Furthermore ore human errors like duplicatio duplication n of records are largely eliminated with the reduction of data entry and reentry in the process. This improvement in speed and accuracy plus the acce access ss to docu docume ment nt and and info inform rmat atio ion n will will resu result lt in incr increa ease se in productivity. Cost Cost saving savings: s: The cost cost saving savings s stem stem from from effici efficient ent commun communica icati tion, on, quicker turnaround and closer access to market. Streamlined business process: Use of internet and with automation of business process can make business more efficient Better Better Custome Customerr servic service: e: Custome Customerr can enjoy enjoy the conve convenie nience nce of shopping at any hour and anywhere in the world. Opportunities for new business: Business over the internet have global customer reach. There are endless possibilities for business to exploit and expand their customer base.


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Constraints to E-Commerce in Bangladesh Out of 64 districts, Internet services are available only in 6 major district headquarters. BTTB is planning to gradually roll out an IP network up to the 64 district headquarters. In January 2002, the Internet facilities were extended to 12 districts. The project is running on very fast and today almost 40 plus districts are getting Internet facilities. Followings are the barriers of e-commerce in Bangladesh: • Very Very minim minimum um numb number er of of users users of of web web sites sites;; • Poor telecommunication infrastructure with limited fixed-line access, unreliable connectivity and low bandwidth (9K); • High price of computer and hardware: The per capita income of our people is less than US$520. But in order to buy a computer it is needed US$500 and for this reason, it is beyond the capacity for a villager’s to buy it. • Lack Lack of tech technic nicall ally y effic efficien ientt perso personne nnel; l; • Lack Lack of inves investme tment nt in in hardwa hardware re and and softw software are;; • The banking infrastructure in terms of electronic payments and inter-bank connectivity is poor. As such, the customers of 5770 branches of the local banks are unable to operate their account with the other branches of the same bank. Inter bank transaction is more cumbersome as the clearing-house of the central bank is not online. An inter-bank transaction may take even 2 weeks if the branches are different cities. Only branches of the private banks are interconnected with their respective head offices. They are also satisfactorily computerized. This represents only 25% of the entire banking sector. • Smal Smalll numbe numberr of Cre Credi ditt Card Card use users rs;; • Limitations of supportive legal system. Such as, exchange controls, protection of telecommunication telecommunication monopolies, restrictive trade practice and prohibitions; • Abse Absenc nce e of of cyb cyber er law; law; • People's People's mindset mindset and very very slow slow and and expensiv expensive e Interne Internett services; services; • Enterpris Enterprise e managers' managers' lack of initiati initiative ve and leadership leadership in taking taking advantage of ecommerce;


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Challenges of E-commerce for Bangladesh 

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Network Infrastructure o Intra-bank and Inter-bank Connectivity Local and Global  Bank-Client Connectivity o Security of transaction o Banking mechanism o Automation Convertibility of the Bangladesh currency o Retention quota o International credit cards o Capacity Building: Human, Technical and Regulatory Quick Settlement, Online credit Information, Skilled e-Manpower, o Regulatory Framework Investment Legal Infrastructure Currency Convertibility: Access to Global Finance E- Culture

Recommendations The assessment of the e-commerce environmental environmental forces of Bangladesh leave us some room to recommend some steps and measures, that should be undertaken by the policy makers and business stake holders for the full fledged implementation and development of e-commerce in Bangladesh. The recommendations are:  There should be an EFT (Electronic Fund Transfer) Gateway, which will connect all finance and banking institutions, ATMs, POS and related websites. Such Gateway will speed up the transactions among banks, commercial institutions. This sort of infrastructure needs to be implemented on priority basis.  A CCG (Credit Card Gateway) should be established. A credit card gateway is a server that makes online credit card transactions safe (Skinner, 2005). The software protocols in the CCG use the information provided to check for availability of funds and to make sure the credit card is not expired, lost or stolen. This takes only seconds. When the


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 

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transaction is approved a receipt is generated for the customer, and the funds are transferred to the vendor's bank account through EFT. Unlicensed radio frequencies should be made available on demand and VSAT operating licenses should not limit the bandwidth. To improve banking mechanism, Bangladesh government should compel the banking sectors to automate their operation and going online by a specific period. The control of foreign exchange should be liberalized gradually, and easier issuance of International Credit Cards should be allowed, banks should take effective steps here. Business associations and organizations should be made aware of the benefits of e-commerce. Business organizations like FBCCI, DCCI, MCCI, and BGMEA can play a significant role in promoting e-commerce in Bangladesh. Political commitment to improve governance and institutional strength is essential for successful application a pplication of e-commerce. Last but not least, National ICT policy, 2002 and enactment of the ICT Act, 2005 is required to enhance the implementation of e-commerce.

CONCLUSION

A key reason why e-commerce, especially the business-to-business segment, is grow growin ing g so quic quickl kly y is its its sign signif ific icant ant impac impactt on cost costs s assoc associa iate ted d with with invent inventori ories, es, sales sales execut execution ion,, procur procureme ement, nt, intangi intangible bles s like like bankin banking, g, and distribution costs. If these reductions become pervasive, e-commerce has the potential to be the application that ushers in the large productivity gains. Achi Achiev evin ing g thes these e gains gains is ther theref efor ore e cont contin inge gent nt on a numb number er of facto factors rs,, including access to e-commerce systems and the needed skills. However, what is unique about ecommerce over the Internet and the efficiency gains is that it promises the premium placed on openness. To reap the potential cost savings fully, firms must be willing to open up their internal systems to suppliers and customers. This raises policy issues concerning security and potential anti competitive effects as firms integrate their operations more closely.


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REFERENCES http://www.manufacturingnews.com/news/editorials/cohen.html http://www.businessweek.com/the_thread/economicsunbound/archives/2008/ http://www.businessweek.com/the_thread/economicsunbound/ar chives/2008/ 06/the_importance.html http://www.med.govt.nz/templates/MultipageDocumentPage____16344.aspx http://www.cid.harvard.edu/cidtrade/issues/ecommerce.html http://en.wikipedia.org/wiki/Ecommerce http://www.google.com.bd/


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Assignment on E-commerce in Bangladesh

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