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E-Commerce in Bangladesh

E-commerce: The Asian Decade

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When it comes to e-commerce, it is natural the names of rich and developed countries like USA, UK, Germany etc comes. After all, they have high level of per capita income, high speed Internet and penetration of Internet and mobile phone usage and even ratio of smartphone usage and finally modern financial sector. They should dominate this sector and perhaps they have done it until now very strongly. Well, things are changing and the time of Asia is coming. In fact, this 2010s decade is going to be the Asian decade in e-commerce.

 

Difficulties of finding authentic stats

While writing this article, one of the major problems that I faced was lack of authentic statistics about the market size and other information of e-commerce sector in different Asian countries. In different websites and blogs, different stats can be found about the same country. Let us hope that there will be someday in near future this issue will be addressed. In this article, I have tried to mention the sources from which I have obtained information.

 

China

China has either already become the largest market in e-commerce sector in the world or will do so either by this year or maximum, by next year (2015). It is indeed a huge market with a huge population. The good thing about China is that people love Internet and because of increasing popularity of smartphones, m-commerce is also expanding very rapidly.

Within the next few years, both e-commerce and m-commerce markets will reach to a saturation point and they will not witness high growth on year to year basis. However, because of the fact that still many people live in rural areas and do not own a computer and smartphone, the market will continue to grow for the next 10 years at least.

In near future, I wish to write a long entry or a series of entries about the Chinese e-commerce sector. Here are some interesting stats about this sector in China:

Alibaba is the dominant market player in e-commerce sector of China.

“At the end of 2013 the China Internet Network Information Center (CNNIC) reported that 81% of Chinese internet users access the internet using a mobile device. In 2012 this figure stood at 74.5%.” Source: Five important ecommerce trends in China during 2014

Since 2009, e-commerce sector has seen annual growth of around 70%.

 

India

There is really tremendous growth opportunity for Indian market. Amazon India and Flipkart are the two market leaders. However, there are some other significant players too. The main problem is low penetration of Internet, high level of poverty and lower per capita income compared to China and much lower market size compared to its huge population. The market size was around US $16 billion in 2013. With all these limitations and problems, India offers a huge opportunity for doing business in e-commerce field. So, I am expecting all the major players like Amazon to make the best out of it in the next one decade.

 

Japan

Japan has the richest  economy in Asia. It has very high level of Internet penetration and mobile phone usage. It has the highest amount of per capita spending online in Asia and second in the world (after USA). Rakuten is the market leader in this field in this Asian country.

Twitter and Facebook are very popular among ordinary people. Most of all, Japanese people are tech savy and love new gadgets. So, all the right things are there. The only challenge is that the people in the country are not fan of websites on other languages except their own native Japanese. Still, the country has huge potential for growth as number of Internet users is going to hit 100 million in the next 4 years.

 

Korea

We all know that South Korean people are simply addicted to Internet. They have very high speed Internet connection- perhaps the fastest internet on earth. They also have online gaming league even. So, it is not surprising at all that Korea has a vibrant e-commerce industry that has attractive market opportunity even for foreign companies too. Korean people browse not only their websites but spend heavily on Chinese e-commerce websites too.

 

Taiwan

Taiwan also has high speed internet, high level of mobile usage, smartphones, highly educated and tech savy people who love internet. So, it is no wonder that this country has a booming e-commerce market with 20% annual growth. From a report:

Taiwan’s e-commerce market is expected to reach NT$1 trillion (US$33.7 billion) by 2015 and will soon take over half of the local retail market, estimated at NT$4 trillion yearly, said Jacky Wang, head of Yahoo Taiwan’s e-commerce group.

Growing at an annual rate of some 20 percent, Taiwan’s e-commerce transactions totaled NT$767.3 billion in 2013, Wang said, citing statistics.

The stats say it  all.

 

Malaysia

Malaysian economy is an Asian success story. According to a research report:

Nearly 20 million people are connected to the Internet in Malaysia, and another five million are expected to go online next year. A high double-digit percentage of Internet users in Malaysia shop online, motivated by price advantages, product range and availability of reviews. Malaysian shoppers look for free shipping, convenience and exclusive online deals offered by online stores. Moreover, online shopping is encouraged by new E-Commerce regulations adopted in 2013, aimed at protecting consumer rights and preventing online fraud.

Malaysia has huge opportunity for growth in this field and the government of the country is surely looking for foreign investments.

 

Singapore

Singapore has very high per capita income compared to most Asian countries. It has embraced ICT long ago and has very usage of mobile phone, smart phone and Internet and Internet through mobile phone. Literacy rate is very high and most people use English language too in their day to day life. Still, the country not showed enough success in e-commerce. That may change from this year. You can read this:

Why 2014 is the moment of truth for e-commerce in Rest of ASEAN

 

Vietnam

Vietnam is going to have its own version of Black Friday this December. Well, it is more like Cyber Monday. Anyway, Vietnam is going to officially celebrate Online Shopping Day on 5 December 2014.

From a website report:

At the launch ceremony on August 8, Tran Huu Linh, Head of the E-Commerce Department under the Ministry of Industry and Trade, said that hundreds of businesses are expected to get involved in the programme.

Linh added the country has around 120,000 businesses which own online shopping websites. Despite the huge number of websites, consumers have encountered a number of hindrances as they are unfamiliar with shopping online procedures.

Therefore, the online shopping day is established to develop e-commerce services effectively.

 

Middle East

Middle East huge potential for growth in e-commerce as some of the countries have very high per capita income. However, many people still do not have the habit of buying online and that seems to be an obstacle. Still, the e-commerce market is growing.

Gulf Times wrote:

E-commerce sales in the Middle East are expected to touch $15 billion by 2015, up from $9 billion in 2012, according to a report by payment solutions provider Payfort.

There are around 4.43 million online buyers in the region spread across countries such as the UAE, Saudi Arabia, Egypt and Kuwait, the report released during the ArabNet said.

The UAE has around 3.6 million e-commerce customers with the lion’s share of them in Dubai, and 27 per cent are in Sharjah and Abu Dhabi.

Almost 60 per cent of e-commerce customers said that competitive pricing and better deals were the motivator to shop online while 56 per cent cited convenience.

 

Another big challenge is that fact that not many local companies are coming to this sector. An industry can grow when there are many players.

 

Central Asia

I could not find much information about e-commerce in Central Asia. However, close proximity to Russia and China is a key factor for the countries in this region.

The Times of Central Asia wrote:

Experts predict that by the end of 2015 the volume of e-commerce market in Kazakhstan may reach $3.6 billion or 4 percent of the total retail market, the official website of the Prime Minister of Kazakhstan reported citing Mirbolat Ayupov, the chairman of the National Info-Communications Holding Zerde.

In 2013 the volume of e-commerce market reached $450 million-$600 million, which is about 2 percent of the total retail market.

 

From another website about Armenia:

In 2012, total e-commerce transactions in Armenia amounted to $8.6 million, composing only 0.08% of GDP. Though it is higher than some of its neighbors1 it lags behind other countries in the region including Iran and Turkey where e-commerce transactions reached $1 billion and  $162 million, respectively.

 

South Asia

I have already mentioned about India earlier in this post. As for other countries in Asia, Bangladesh government is now trying to speed up things in this field in the country. Online market places and classified websites are becoming very popular. There are now several hundred e-commerce websites. Facebook commerce is also becoming popular.

Pakistan is also a growing market in this field. From a Pakistani newspaper:

Pakistan is one of the fastest emerging e-commerce markets in the region.

 

The level of trust global online groups are showing in the talents of the Pakistani youth and the e-commerce industry here suggests that, in the near future, it is likely to hold a significant share in Pakistan’s economy.

Sri Lanka has the highest literacy rate in South Asia. The country has now peace after many years of civil war.

 

Future Trends

The future looks to be very bright for Asian e-commerce industry. China is heading towards saturation, India has a lot to offer growth. Bangladesh, Pakistan and Indonesia together have a market size of half billion people. Still many people do not have access to Internet in this continent. The number of smart phone is growing but there is still a lot of room for growth.

Then there is the challenge of winning the heart and mind of people about buying things online. Many people are worried about fraud and safety of their credit cards. This is indeed a big challenge. We also need some Asian success stories in e-commerce. Another big challenge is the lack of good quality courier service at an affordable price.

 

All the governments in this country should work together and join hands to promote e-commerce across the continent. E-commerce can truly transform the lives of millions of people in Asia. It is time that we take it seriously.

 

 

 

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Written by Razib Ahmed

August 17th, 2014 at 10:20 pm

Posted in E-commerce

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