e-commerce in Bangladesh

Friday, June 01, 2012

Web Entrepreneurship in Bangladesh: Potentials, Challenges and Recommendations

(This article was first published in another blog of mine in 2009).
I have been involved with information technology sector of Bangladesh since 1999 as a freelance journalist. Thus, I have spent one decade covering this field. Well, when I started in 1999, at that time, most people had a lot of dream with this sector. They thought that if they learnt computer then they would get very good job and their career would be great. In the private universities, hundreds of students used to get admitted in Computer Science and Engineering departments with the dream of becoming rich some day.
Even there was dream in the government level. In 1998, all kind of taxes were removed from the computer accessories. Then in 2001 or 2002, there was even an announcement from government of a target of earning at least a billion dollar from software and IT export. However, the reality is that this dream has not materialized yet and still, the export revenue of Bangladesh from information technology sector is very insignificant in our overall export earning.
Well, I think that the idea of web entrepreneurship has been largely neglected in our country. Perhaps the main reason is that the number of regular internet user is still not that much.
What is web entrepreneurship: Web entrepreneurship is something by which a person or a company earn revenue through websites. This is common in developing countries like USA and European countries. The same is true about Japan and other rich countries but in Bangladesh, it is still in the early years and it has not become a serious business in this country. In this entry, I am going to talk about potentials and obstacles of web entrepreneurship in Bangladesh.
First of all, I like to talk about the potentials and advantages:
1. Unexplored field: Online business is still largely an unexplored field in Bangladesh. We do not have that many websites and most of the websites are not generating good amount of revenue. If we look at Alexa ranking then we will notice that many of the websites in the Alexa top 100 ranking (Top Sites in Bangladesh) are not even from Bangladesh. The Bangladeshi websites that are in the top 100 ranking are mainly online versions of newspapers and some community blogging sites. So, it is clear that it is still largely and unexplored field in Bangladesh. So, there is a lot of potential that you can earn money here if you have the right strategy and expertise.
2. Expanding Internet user base: If I am not wrong I think that Bangladesh joined Worldwide information super highway in 1996. So, it has a history of 13 years and in 2006, Bangladesh got joined to the information super highway with submarine cable. Before that, here, we used to get internet through the use of VSAT. As a result, the number of internet users is increasing very rapidly and it will continue to do so for the next one decade at least. Still, not even 1% of population regularly browse internet.
3. Digital Bangladesh concept: One of the positive sides is that Bangladesh government has declared a plan to turn the country into Digital Bangladesh within 2021.So, there is a lot of good will expressed from the highest level of the government. This is very important thing because in a third world country, a lot depends on the top leaders. So, you can easily understand that because the dream of digital Bangladesh has come from the prime minister of the country, this is a very positive thing and it has added the potential of web based business significantly.
4. E-commerce 2012: Can you believe that e-commerce is yet not legalized in Bangladesh. Good thing is that there is a plan to make it legalized and introduces it from the government level by 2012. This is a very positive announcement that came in the budget of 2009. In 2012, e-commerce facility will start. So, I do not need to explain to you in much detail that it will increase the revenue of internet based business sharply.
4. Educated work force: Bangladesh has a population of nearly one hundred-fifty million. Literacy rate is low but in the last few years, people are now more conscious about the importance of education. As a result, we have seen tremendous growth in the number of private universities in the country. Each year thousands of students are passing out from universities and university collages and we thus have no shortage of fresh graduates. The good part is that many of these graduates are prepare to work with a modest salary.
5. Positive economic growth: I do not have the accurate statistics at this moment but I think that for the last one decade, the economic growth or GDP growth of Bangladesh is around 5 to 6 percent. This is very good compared to most third world countries in the world. What is good is that it is continuous. In other words, the growth is going on for the last few years and the good thing is that it is going to create a sizeable middle class population. The same thing happened in India and China in the last two decades. We hope that the same thing is going to take place in Bangladesh in the next ten years. So, when you have a flourishing middle class naturally you have many people with purchasing capacity. The good part of this middle class people is that many of them are highly educated and they have computers in their home.
Challenges and obstacles:
1. Bandwidth price: Bandwidth price is still very high in Bangladesh. For example, at this moment the price of 1mbps internet bandwidth is more than $250 and when it reaches to the consumer level then it becomes more than $350. This is quite expensive and it has to be lowered down to $100 as soon as possible. Without decrease in bandwidth price, it will be very difficult to flourish web based business.
2. Legal problem: There is still no adequate legal frame work for web base business in Bangladesh. For example, if you want to start a business for earning money by your websites, the first thing you have to think is how to register it with law. As far as I know, there is no category for trade license as website or internet based business. You have to do it in computer and software category or may be cyber café. However, you can easily understand that a website base business is not directly related to computer or hardware or software or even cyber café.
3. Domain and Hosting: If you want to set up a website then the most important part is buying a domain and hosting. As far as I know, domain price is good as per with the international market but many Bangladesh companies lack some of the versatile facilities that are associated with domains. If you buy a domain from US companies like Go Daddy then you can get a lot of facilities and you can do a lot of things. The same goes for hosting. Hosting is yet very expensive compared to international companies like Go Daddy or Host Gator. So, I really wish that from Bangladesh, some companies become agents of big companies like Go Daddy and Host Gator or Bluehost.
4. Risk taking mentality: Well, I have been working as a freelance for more than seven years and when I left my university job the first reaction I had from my friends and relatives was that I was a mad person. At that time, I was very young and was still in my late twenties. So, none of them could understood the rational behind such a risky thing done by me. This is a very big problem that I see among educated people in Bangladesh. They think that after passing from university they must try to get a well paid job and they would work 9 to 5. If you want to be a web entrepreneur, you must be prepared for taking all kinds of risk. From my own experience, as a Blogger and web entrepreneur from Bangladesh, I know that it can be a very tricky job or business. Today, you get good traffic from Google but tomorrow your traffic can decrease a lot. There is no stability in your revenue.
4. Habit: Because there is no e-commerce facility here, people do not have any habit of buying from internet yet. So, if you want to become a web entrepreneur in Bangladesh then at first it will become a very big problem for you. Here most people do not have any idea how to buy from internet and it will be a very big challenge for you to create this habit among other people.
5. No Paypal: If you have any idea about online business then you know that in USA a lot of transactions are carried out by Paypal. Paypal has decreased the risk of using credit card directly in websites and it is very helpful. Howeve, itis yet to include in Bangladesh. As a result, Bangladeshi people are suffering a lot. I wish that Bangladesh Central bank and the concerning ministries talk to the officials of Paypal about including Bangladesh in their payment system. If needed it can be make one way that with Paypal money will only come to Bangladesh but from Bangladesh you can not send any money with it. This thing has already happened with Western Union.
6. No role model: Except perhaps Bdjobs.com, we do not have any notable success story with any website. Well, these days, I can see that Bdjobs is offering a lot of training programs and I am very happy for it. They have first created a brand name and thus they have achieved credibility with their website. So, arranging workshops and training programs have become successful and they are also earning money by using their credibility of the website. This is a very good example of web entrepreneurship in Bangladesh and I really wish that more websites become popular and get the same level of success.
7. No venture capital: Even in our neighboring India, there are some venture capital farms who are ready to invest on your business if your business have the potential. In Bangladesh, we still do not have it. Perhaps the NGO’s and some big companies can come forward in this regard.
1. Bandwidth price: I like to say that there is no alternative to decreasing the price of internet bandwidth without any delay. If you want to make e-commerce popular or if you want to create successful web entrepreneur then you have to decrease bandwidth price. If the price of bandwidth is decreased then more and more people will be able to join internet and will have the habit of browsing.
2. Online transaction system: There is no alternative to this matter. If you want to make web entrepreneurship a success then people must have a way to buy and sell things online. I am hopeful that this problem will be solved in the next two years but I really wish that it happens this time. Here, I like to mention that I wrote a cover story for a computer magazine Computer Bichitra in 2000 about e-commerce. I am very sad to say that noting has happened in the last nice years in this regard.
3. Venture capital: I like to again repeat the same thing that in web based business it is very difficult to get bank loan or other kind of institutional loan. It is the venture capital companies and angel investors who have to come forward. However, the problem is that as far as I know, we do not have adequate legal frame work in Bangladesh for this kind of thing. I hope that this matter can be discussed a lot in the coming days and we can see the creation of some venture capital companies from the leading NGO’s and multinational companies.
4. Private University initiative: In government universities, there is some kind of bureaucratic or red tape problems or there is shortage of fund. However, in the private universities, they have a lot of freedom to exercise and money is not that much of a problem for any new initiative. I really hope that some private universities can directly encourage students to form some groups and start web based business. Computer science and Business Administrations departments can play crucial roles in this regard and they can easily make small group of students like ten students in a group and ask the ten students to take an initiative to make a website and try to find a business model.
5. BCS and BASIS: Bangladesh Computer Samity (BCS) and Bangladesh Association of Software & Information Services (BASIS) are the two leading ICT associations about information technology in Bangladesh. They have many members and they also have a lot of influence over the decision making process of the government. They can encourage their members to take some initiatives in web entrepreneurship.
In conclusion, I like to say that it is the right time for the growth in web entrepreneurship in Bangladesh. This is a sector that really can generate revenue locally and bring some foreign currency.


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  3. First sentence give you little bit information which behind have a lot of history. So potential article for web entrepreneurship in Bangladesh. I also read another informative article which is......
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