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Transcript of 1 Md. Mahbubur Rahman Alam B. Sc. (Statistics) Dhaka University M. Sc. (Statistics, Major in...
1
Md. Mahbubur Rahman Alam
B. Sc. (Statistics) Dhaka UniversityM. Sc. (Statistics, Major in Econometrics) Dhaka University
PGD(ICT)BUETM. Sc. (ICT) BUET
Assistant Professor, BIBM, Mirpur, Dhaka.Cell: 01556323244, Mail: [email protected] Website: mralam.net
Application of E-commerce and M-Commerce in Business Development: Bangladesh Perspective
E-Commerce
E-Commerce (Electronic Commerce) refers to marketing, selling and business over the Internet or in other word
E-Commerce can be defined as a form of business transactions in which the business parties interact electronically.
In the simplest form, we can say that, E- Commerce is the movement of business on the web.
E-Commerce Vs Traditional Commerce
Traditional Commerce E-Commerce
Market Physical Virtual
Identity of Buyer and seller
Spot and physical Human to Human
Through media Human-Media-Human
Immediacy Getting goods and service Immediately
Getting goods and services at later time.
Price Cost + Profit Cost + Profit + Transport Cost/ Shipping cost
Privacy and Secrecy
Not a major concern here. Consumers are not asked for personal information
It is a major concern for the authority. Consumers are asked for personal information
E-Commerce Traditional Commerce
Sale/purchase of books and CDs Sale/purchase of high-fashion clothing
Online delivery of software Sale/purchase of perishable food products
Online tracking of shipment Sale/purchase of expensive jewelry and antiques
Advertising and promotion of travel services
E-Commerce Vs. Traditional Commerce
Advantages of E-Commerce
This is no doubt 'easy for the busy people'.
24 * 7 operation
Reduction of cost
More choices
Quicker delivery
Advantages to Customers:
Advantages of E-Commerce
Globalization
Reduction of cost
Low cost advertising
Strategic Benefit-
Error detection and correction
Supervision expenses
Mail preparation
Advantages to Business:
Advantages of E-Commerce
Opportunity for disabled
Enables people in Third world countries and rural
areas to enjoy products and services at a reduced
cost
Enables more individuals to work at home, and to
do less traveling for shopping resulting in less
traffic on the roads and lower air pollution
Allow some merchandise to be sold at lower price
Advantages to Society:
Disadvantages of E-Commerce
Hidden costs
Network unreliability
Small companies are unprepared for global
selling
Lack of skill and training of the employee
Lack of security
Ethical concerns
Reasons for E-Commerce not being Very Successful
Not everybody has access to a computer
Buying goods over the Internet is not ‘natural’:
-- The absence of ‘touch-feel’ factor
-- The interaction is unnatural
People are concerned that buying over Internet is
unsafe.
E-Commerce Transaction Model
Business
Consumer Consumer
Business
Government
Business Models of E-Commerce
Depending on the parties involved in the
transaction,
E-commerce can be classified into 4 models.
These are:
Business – to – Business (B2B) model
Business – to – Consumer (B2C) model
Consumer – to- Consumer (C2C) model
Consumer – to – Business (C2B) model
B2B Business Model
B2C Business Model
C2C Business Model
E-commerce Impact on Various Channels
Airline ticket
s
Banking
Bill payme
nt
Insurance policy
Software distributio
n
Traditional system 8.0 1.08 2.22 to
3.32 400-700 15.00
Telephone-based 0.54
Internet-based 1.0 0.13 0.65 to
1.10 200-350 0.20 to 0.50
Savings (%) 87 89 71 to 67 50 97 to 99
US$ per transaction Source: Meeker, 2013.
M-Commerce or Mobile Commerce
The wireless Internet has three main features that permit mobile services to be more personalized than traditional Internet applications.
First, mobile telephones are carried by their owners almost everywhere and kept switched on most of the time.
Second, wireless operators are uniquely able to determine the identity of a user.
Third, operators can detect a user’s exact location, enabling a whole range of new applications.
10 Biggest Markets by Global e-Commerce Sales
1. China ($562.66B in sales projected for 2015)
2. United States ($349.06B in sales projected in 2015)
3. United Kingdom ($93.89B in sales projected for 2015)
4. Japan
5. Germany
6. France
7. South Korea
8. Canada
9. Russia
10. Brazil ($18.80Bin sales projected for 2015)
The Bangladeshi e-Commerce : Inception
In Bangladesh e-Commerce started as early as 1999. However the progress had been stagnant for over a decade.
The first e-Commerce websites were linked with ISPs as well as internet related products were being sold.
www.munshiji.com, www.bdshop.com, www.bijoyonline.com were one of the first e-commerce sites in Bangladesh.
To understand more on e-Commerce in Bangladesh, we have to look at the progression of the connected infrastructure, Internet, Telephony as well as the Banking sector.
The Ecosystem
e-Commerce
E-Payment Systems &
Infra
Delivery logistics Systems
Consumer awareness & confidence
Internet Penetration
Technical development
Short History of e-Payment Systems in Bangladesh
• Vanik systems, currently kown as LankaBangla Finance was the first company to introduce credit cards in Bangladesh.
• These were completely static non Magnetic strip cards with swipe impression charging systems.
• NCC Bank was the first commercial bank to introduce credit card.
• ATM card penetration started as early as 1999, however all Debit card and ATM cards remained in a “Walled Garden” status till 2004-5
Short History of e-Payment Systems in Bangladesh
• The first payment switches that came onboard in Bangladesh were “eCash” and “BEPS”
• “Q-Cash” and “Omnibus” were quick to follow.• BFTN has been implemented at the last – only an year or two
back.• Interoperability of the payment switches still remains elusive.
Bangladesh still relies on high level payment switch interoperability like “VISA” and “Mastercards”
• Recently “AMEX”, “JCB” and “DINERS CLUB” switches have been introduced.
Short History of e-Payment Systems in Bangladesh
• There have been multiple attempts to bring in e-payment gateways to Bangladesh.
• The cautious approach by Bangladesh Bank as well as commercial Banks as well hindered the growth.
• Bangladesh remains among one of the only two countries in SAARC region not to have access to global e-Payment solutions like Paypal and AliPay.
• Recently Bangladesh Bank is encouraging the inclusion of e-payment gateway in a Bank led model.
Short History of e-Payment Systems in Bangladesh
• “Payza” got introduced recently by Bangladesh Commerce Bank
• Among the many positives in a list of countless discouraging facts is the growth of MFS.
• bKash and DBBL are success stories. • Now over 14 active MFS brands are operating.• The country found its own way to progress despite all these.• Payment aggregators like “SSL Commerz” and “Walletmix”
have arrived.
Delivery and Logistics Systems
• Delivery and logistics systems are still underdeveloped• The country still relies on non automated hand to hand delivery
methods.• Though the Courier Services Association claims a daily
distribution of over 4 Million individual parcels and letters every day in the country, Most of it is undocumented or minimally documented
• The National Post office is the slowest to adopt new technologies.
• The commercial couriers are no better
The nagging problems still remains
Consumer confidence on Payment
Efficient Logistics
Proper Infrastructure
& Finance
Current status of e-Commerce in Bangladesh
Bangladesh has over 2000 active ecommerce sites currently operating all over Bangladesh.
Bangladeshis are one of the quicker races to adopt f-commerce.
There are currently more than 3000 f-commerce initiatives by Bangladeshis.
Daily over 3 LAC transactions are happening in e-commerce
Payment Gateway transactions are still the lowest around 30000 (Excluding MFS).
Where are we compared to our neighbors
Prospects of e-Commerce in Bangladesh: few pointers Active telecom penetrated Base is over 13 Cr. Active internet penetrated base is over 5 Cr. Already Smartphone sales is growing by 38% year by year. It is estimated that end of 2016, 90% of the Mobile penetrated
population will have internet capable handsets. Banking penetration is growing MFS penetration is growing at an explosive rate. e-Payment aggregators are coming onboard AlterNet payment systems are being introduced. Inactivity by Banks in financing is giving way to venture finance.
e-Commerce has many faces
We are still primarily working over “e-Tailing” Explosive growth opportunities are there in e-Ticketing,
Travelling and e-goods. Slowly these are getting introduced.
Challenges in coming days
Access to Finance Delivery systems and Logisticse-payment gateway proliferation and use of BFTN
in e-Commerce.Single body to take e-com initiatives forward : e-
CabProper promotions and awareness building
Success StoriesIt is said - where there is a will there is a way.Bangladeshi e-Commerce ventures are now going to
venture capitalists for funds.Chaldal.com received $ 0.5 million USD as seed fund.Bdjobs.com offloaded 28% of its shares for $30
Million AUD.Newscred.com has Series B funding of $20 Million
USDWe stepped into “Crowdfunding”.
Looking Forward Currently one data is floating around that last August-
September during the end of Eid-ul-Azha around 200 Cr. Was transacted for e com in a month.
We are looking at a 200-300 Cr. Monthly transactions on e commerce in 2015.
Currently around 1-2% of these transactions are over Banking channel
Taking the transactions to at least 30% should be the primary goal in 2016-2018
Few research predicts by 2020 Bangladesh e-Tailing will become 20% of all retail sales.
Number of Transaction in Different Delivery Channels (2015)
July 2015 (Monthly) Yearly (2015)
Transactions Amount (Cr) Transactions Amount (Cr)
MICR
1,721,614
126,675.00
20,659,368
1,520,100.00
Non-MICR
4,222
90.40
50,664
1,084.80
EFT
1,327,946
6,616.00
15,935,352
79,392.00
Credit Card
1,036,287
637.00
12,435,444
7,644.00
Debit Card
11,063,479
8,410.00
132,761,748
100,920.00
Prepaid Card
50,622
32.00
607,464
384.00
International Card 492,891
356.00
5,914,692
4,272.00
Total Card
12,643,279
9,436.00
151,719,348
113,232.00
Internet 519,671
1,674.00
6,236,052
20,088.00
Mobile
97,334,572
13,745.00
1,168,014,864
164,940.00
Agent
70,340
203.00
844,080
2,436.00
POS
1,527,163
1,053.80
18,325,956
12,645.60
E-commerce
93,650
29.30 1,123,800
351.60