In the era of digitalisation, the rise of e-commerce has become a global phenomenon, impacting economies, industries, and consumer behaviours alike. For emerging economies like Bangladesh, e-commerce has proven to be a game-changer. Over the past decade, Bangladesh's digital landscape has been transformed, spurred on by increased internet penetration, improvements in financial technology, and shifts in consumer behaviour.
In terms of growth, the e-commerce industry in Bangladesh has been growing at a remarkable pace, spurred on by a young, tech-savvy population and an expanding middle class. This is further accelerated by the citizens’ adoption of the latest in consumer technology, in which the internet and the usage of smart mobile devices are now becoming commonplace. According to DataReportal, there are now more than 51 million internet users in the nation, with Bangladesh’s internet penetration rate now at 31.5% of the total population (approximately 167 million) at the start of 2022.
With the number of internet users in the country having risen sharply in the past decade, it has fuelled the growth of e-commerce businesses in Bangladesh, contributing to gross domestic product (GDP) growth and creating job opportunities. The sector's rapid expansion signals a promising future for the nation's businesses to expand internationally. With the right strategies and investments, Bangladesh’s e-commerce enterprises can reach an international audience and benefit from the numerous opportunities in the global e-commerce market.
The importance of cross-border e-commerce
Cross-border e-commerce refers to online trade between a business (retailer or brand) and a consumer (B2C), business (B2B), or between two businesses, or between two consumers (C2C), across national borders. This form of commerce has gained immense importance in recent years, as it allows businesses to expand beyond their home market and tap into new demographics. For Bangladeshi businesses, cross-border e-commerce can open up a wealth of opportunities, facilitating entry into international markets, diversification, and increased revenues.
With the global e-commerce market size predicted to reach $8.1 trillion by 2026, as reported by Statista, the potential for Bangladeshi businesses to expand their consumer base and increase profits through cross-border e-commerce is substantial. By expanding into international markets, local e-commerce businesses can also strengthen their competitive position, improve their resilience, and enhance their business growth.
Potential benefits of international expansion
International expansion can bring numerous benefits to Bangladeshi e-commerce businesses. First, it provides access to a larger customer base. With the advancement of technology, geographical distance is no longer a barrier to conducting business. Through international expansion, Bangladeshi e-commerce businesses can cater to millions of potential customers around the world, thereby significantly boosting sales and profits.
Secondly, international expansion can lead to diversification. By expanding their business operations across different markets, Bangladeshi e-commerce businesses can mitigate risks associated with over-reliance on a single market. In addition, diversification allows these businesses to leverage the varying peak demand times in different countries, which can lead to more stable revenues.
Thirdly, by expanding into international markets, Bangladeshi companies can gain invaluable insights into global consumer behaviour, market trends, and business practices. This can enhance their business strategies, decision-making capabilities, and ultimately, their competitiveness.
Current state of cross-border e-commerce in Bangladesh
The e-commerce industry in Bangladesh is witnessing unprecedented growth. This transformation as mentioned earlier, is backed by increased internet penetration and enhanced access to mobile financial services (MFS), encouraging a major shift in consumer behaviour towards buying things online. With the e-commerce sector's current valuation close to US$1 billion (Tk8,500 crores), a report from the Asian Development Bank (ADB) predicts a threefold market growth by 2023, projecting a value of US$2.4 billion (Tk26,000 crores).
This thriving landscape of approximately 2,500 e-commerce businesses in Bangladesh, complemented by a strong presence of business activities on global social media platforms, offers a vast potential for international expansion. With these robust growth indicators and an expected additional 300,000 jobs in the e-commerce sector by 2024, it's an opportune moment for Bangladeshi businesses to explore the potential of cross-border e-commerce.
Latest trends and innovations in cross-border e-commerce
There are several trends and innovations shaping cross-border e-commerce today. As more consumers turn to online shopping, businesses need to stay abreast of these trends to maximise their potential. Emerging technologies such as artificial intelligence, machine learning, and blockchain are transforming the e-commerce landscape. These technologies are helping businesses to personalise the consumer experience, streamline operations, and enhance security.
Additionally, consumer behaviour is changing rapidly. Today's consumers demand a seamless buying experience, quick delivery, and high-quality customer service. They are also increasingly conscious of sustainability, ethical sourcing, and social responsibility. For Bangladeshi e-commerce businesses looking to expand internationally, understanding, and adapting to these changing consumer behaviours will be crucial to their success.
Target markets for Bangladeshi e-commerce businesses
If Bangladeshi e-commerce businesses are serious about making their mark on the international scene, several potential target markets beckon. The United States, Europe, and China continue to hold positions as the world's largest e-commerce markets and offer incredible opportunities for growth.
Closer to home, opportunities in South Asia are also ripe for the taking. Neighbouring countries like India, with its massive consumer market and burgeoning e-commerce sector, alongside emerging markets in Nepal, Bhutan, Sri Lanka, and Myanmar, offer lucrative options. Their geographic proximity and cultural similarities can make them excellent starting points for businesses venturing into cross-border e-commerce.
Expanding into international markets is not without its challenges. Bangladeshi e-commerce businesses looking to go global must overcome hurdles such as logistics and customs issues, cultural barriers, language barriers, and differing legal and regulatory frameworks.
