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Private sector participation in line with the implementation of data and predictive technology can bridge the gap between the e-commerce industry and rural Bangladesh

Sazzad Reza Basunia / Contributor

April 10, 2022, 10:45 a.m.

Last modification: April 10, 2022, 1:08 PM

Sazzad Reza Basunia. TBS Sketch


Sazzad Reza Basunia. TBS Sketch

Electronic commerce is commonly described as a monumental revolution in the information age. In the age of the Internet and digital technology that is driving the creation of new opportunities, government and the private sector have taken various initiatives to ensure that daily necessities reach people’s doorsteps easily and quickly.

But surprisingly, Bangladesh has not yet developed any e-commerce based initiatives targeting the rural population.

Connecting rural people to e-commerce platforms has so far been about being the producers. No initiative has yet been taken to approach the rural population as consumers.

City dwellers may not realize it, but shopping in rural areas is not as easy as in urban areas. A study found that 73% of people in rural areas go to town for wider access to goods, such as cell phones, televisions, motorbikes, etc. To do this, they must travel an average of 20 km.

Consequently, rural consumers are faced with major problems such as the proliferation of counterfeit products, the unavailability of branded products and the lack of opportunities to choose from a wide variety of products. Due to the low density of suppliers in these regions, the distribution frequencies of large companies are low.

But these problems can be solved through the implementation of data and predictive technology.

The real picture of e-commerce development in the country is not satisfactory. It remains a popular and growing alternative to conventional retail only among the upper middle class and upper class in urban areas. The lion’s share of the country’s e-commerce orders come from Dhaka, Chottogram, Gazipur and Narayanganj.

Illustration: TBS

Illustration: TBS

Illustration: TBS

According to the e-commerce association – Ecab, more than 1,600 e-commerce organizations are currently operating in Bangladesh. With a lack of innovation, all these e-commerce platforms are battling in the same ocean.

Meanwhile, the country’s rural economy is diversifying. As agricultural work in the country is growing, the non-agricultural sector is also growing in the rural area. The improvement is noticeable in most villages.

Improved health, education and communication infrastructure is evident, as well as improved haat bazaars and most villages are now part of the power grid. Village roads are now connected to Upazila districts and highways.

In the changing scenario, in order to bring the benefits of e-commerce to the village, technology must be combined with supply chain management.

The tyranny of middlemen remains a major obstacle to rural economic development. According to a report by the Ministry of Agriculture, farmers sell cabbage at an average price of Tk 13.50, but when it comes to Dhaka city, the price increases up to Tk 36. This pushes us into a vicious circle: rural people are getting poorer and the urban middle class is queuing up behind TCB trucks.

In order to overcome this problem, we need rural digital highways where rural farmers and city dwellers will meet.

In China and Indonesia, the online-to-offline (O2O) e-commerce model plays an effective role in the rural economy by establishing strong coordination and relationships between rural people and e-commerce platforms.

The online-to-offline model is a type of business strategy where the buyer orders online but takes delivery from specific points. This gives rural shoppers confidence in online shopping and also alleviates the problem of finding addresses for villagers.

There will be a hundred economic zones in our country. We need to think about ways to accelerate the development of our rural economy by linking economic zones with rural e-commerce.

Future initiatives for rural e-commerce development will require a strategy to maximize labor utilization. Also, the platforms will have to prove their value through performance, which will require an integration of physical and digital activities. Otherwise, the initiatives will remain in vain.

Gaining customer trust and solving last mile issues through the online-to-offline (O2O) method is a magical strategy. At this point I would like to share a personal experience. During the first wave of Covid-19, libraries across the country had closed due to the nationwide lockdown. In order to ensure that the supply of academic books matches the demand while keeping the interest of distribution partners stable, we have adopted the online-to-offline strategy.

In a very short time, we created a platform where we took orders and organized deliveries from a library closest to the students. The response was more than we could have anticipated.

Our villages need a changemaker – an entrepreneur – who will step up to make a positive difference through an innovative platform that offers buying and selling branded products, digital banking/insurance services, facilitates city ​​dwellers’ investment in vegetables, fish, and poultry, builds grain banks for farmers, facilitates the rental of farm equipment, and so on. – all under one roof.

And only then will real development take place in our villages and it will have a direct impact on the development of our rural economy. With the promising combination of machines and technology, our villages will overcome the inequality of digital facilities. And we will experience the universal benefits of e-commerce.

Sazzad Reza Basunia works at as Business Head.

Warning: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.


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