Md.

Sanaullah 12-13-2013

Topic: E-Marketing Situation in Bangladesh

Submitted to: Md Moktar Ali Associate Professor Department of Marketing University of Dhaka

Submitted by: Md Sanaullah BBA, !th Batch "oll#$!$, Section#B Department of Marketing University of Dhaka

Date of Submission: % &ovember, $' %

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Letter of Transmittal % December, $' % Md( Moktar Ali Associate Professor Department of Marketing University of Dhaka Sub)ect: Submission of the term paper on the e#marketing practices in Bangladesh Dear Sir, *t is a great honor and pleasure for us to present term paper on this report +as given to us as a partial re,uirement of the -.#commerce/ course in the 0th semester by our honorable course teacher( 1his report has given us an opportunity to apply our theoretical kno+ledge, sharpen our ideas, and communication skills, make us informed about )ob market and bridge them +ith the real +orld of practical e2perience, +hich +ill be a good head start for our future professional career( 3our profound lecture and guideline helped us to cope up +ith the difficulties that +e face in preparing this report( 4astly +e +ould be thankful once again if you please give your )udicious advice on our effort( Sincerely yours, Md( Sanaullah !th Batch "oll# $!$, Section#B Department of Marketing University of Dhaka

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Acknowledgement At first +e +ould like to pay our gratitude to the Almighty, +ho helped us every time and +as +ith us and gave us moral support and strength every moment( 1here is an .nglish proverb -Two head are better than one. So, no one can obtain a noble ob)ective alone( 1his term paper is an accumulation of many people5s endeavor( 6or this, +e are indebted to a number of people +ho helped me to prepare this and for their kind advice, suggestions, directions, and cooperation and proper guidelines( 7e +ould like to pay our gratitude to all of the people +ho helped us a lot for the completion of this report before, during, and after the +orking period( 7e are especially grateful to our honorable course teacher Md( Moktar Ali for giving us valuable suggestions and support in preparing this report( 7ithout her advice and support, it +as totally impossible on our part to complete this( 7e are also grateful to our friends and classmates +ho helped us in completing this( 4ast but not least +e e2press our gratitude to the all the individuals +ho have helped us directly or indirectly(

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E!ecuti"e Summar#: 1he *nternet has opened up a ne+ hori8on for trade and commerce, namely electronic commerce 9e#commerce:( .#commerce entails the use of the *nternet in the marketing, identification, payment and delivery of goods and services( 1his paper highlights the status, statutes, potential and constraints to e#commerce development in Bangladesh( Both the statutory la+s as +ell as the challenges in implementing them are discussed( Ma)or legal, regulatory and institutional constraints to e#commerce are identified( 1he paper also lists specific policy changes aimed at bringing improvements to the legal and regulatory environment affecting e#commerce( Dimensions of E-Commerce 1he three dimensions of e#commerce are Business#to#;onsumers 9B$;:, Business#to# Business 9B$B: and Business#to#<overnment 9B$<:( B$; e#commerce is unlikely to be of much use in the near future in Bangladesh because of lo+ per capita income, a +eak infrastructural and legal environment, lack of trust bet+een business and consumers( B$; for cross border trade is also limited by the factors suggested for the domestic front( *n addition, non#availability of international credit cards, foreign currency remittance restrictions, delays and informal payments at customs clearance even for small value and ,uantity items +ill discourage B$;( 1he B$B application already e2ists in the e2port sector of Bangladesh, especially in the "eady Made <arments 9"M<: industry( "M< has the lion5s share of the e2port earnings in Bangladesh( 1he "M< sector has begun to use the *nternet, and its dependence on ecommerce is likely to gro+ in the coming years( 1he *nternet +ould enable them to seek information about potential buyers as +ell as ra+ material suppliers( Similarly the practice of posting a +ebsite by individual producers has begun( =o+ever, if Bangladeshi producers are unable to accommodate electronic transfer of payment and other facets of e#commerce, the business opportunity +ill move on to countries that have developed such systems( B$< e#commerce is possible in Bangladesh, but on a limited scale at this stage( 1he government is a ma)or buyer of goods and services from the private sector( 1ypically, the government procures goods and services by inviting tenders( 1he availability of the "6P and other relevant documents on#line provides an alternate choice( 1ransactions involving information collection, obtaining various governmental forms, registering activities can also

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be conducted on#line( 1his +ill reduce time costs, corruption and the necessity of going through lengthy bureaucratic procedures as +ell as increasing transparency( Government Legislation An overvie+ of the government trade and industrial policies as +ell as various acts and statutes affecting e#commerce has been presented in this paper( 6or e#commerce to develop re,uires an enabling environment that +ould ensure easy and ,uick movement of inputs as +ell as goods and services +ithin the country and cross border trade( 1+o ma)or government documents reflect the mood of trade and investment policy directions to be pursued in the medium term( 1hese are the 6ive#3ear Plans and the *ndustrial Policy( 1he 6oreign Private *nvestment 9Promotion and Protection: Act of >0' guarantees legal protection to foreign investors against nationali8ation and also indemnifies them against losses due to civil unrest( *n the area of foreign trade, the legal frame+ork is primarily governed by three legislative Acts: 1he *mports and .2ports 9;ontrol: Act, ;ustoms Act, >!>@ and 1he 6oreign .2change 9"egulation: Act, >?'@ 1he >AB( "evisions and

updates of these Acts are made periodically( 1he .2port Policy >>B#$''$ aims at promoting e2ports in the regional and international markets( 1he recently passed *ntellectual Property "ights 9*P": bill of Bangladesh concentrates on soft+are copyright protection( =o+ever, e#commerce related copyright protection is not covered in the ne+ *P"( According to the .vidence Act, 00 , a physical signature is necessary to make any contract legal( 1his makes electronic contracts void under Bangladeshi la+( ;ontract 4a+ in Bangladesh is governed by the ;ontract Act 0B$( ;ross border contracts are legal, but a physical signature is necessary to validate the contract( 4egislation that legali8es digital certificates, electronic contracts, also needs to be enacted to promote e#commerce( 1+o Acts play an important role in dispute settlement ## the Arbitration Act >A' and the Money 4oan ;ourt Act >>'( 1he Arbitration Act governs the settlement of any disputes arising from business transactions( 1he Money 4oan ;ourt 9Artha "in Adalat: is an independent )udicial body established under the Money 4oan ;ourt Act >>' and the Money 4oan ;ourt "egulation >>' to recover public money loaned to individuals through public sector financial institutions( =o+ever, the Money 4oan ;ourts are overburdened +ith the enormous number of cases they have to deal +ith( Although no la+s that directly provide for ;onsumer Protection e2ist in Bangladesh, certain la+s, if implemented appropriately, can play a significant role in ;onsumer Protection( 1+o
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Articles in the ;onstitution in Bangladesh ## Article ? and Article 0 C state broad principles regarding consumer protection( Article 0 specifically includes raising the level of nutrition and improvement of public health among the states primary duties( Article state( Infrastructure: Status and Issues *nternet services are directly dependent on the telecommunication infrastructure of the country( 1he Bangladeshi telecommunication sector is characteri8ed by poor level of penetration, high cost to access and a lengthy +aiting period( Although the Bangladesh 1elegraph and 1elephone Board 9B11B: continues to be a monopoly in providing basic telephone connections, the private sector5s involvement in cellular phones and as *nternet Service Providers 9*SP: have been allo+ed( Despite the need for easy and affordable access to *nternet services, B11B5s pricing and regulatory strategy on *SPs are restrictive( ? can be interpreted as making the provision of basic necessities a fundamental responsibility of the

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Table of $ontents

Topic Introduction Major Constraints in E-marketing Telecommunication E-Banking Human Capital Conclusion e!erences

Page 8 11 12 12 12 13 1"

%ntroduction
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7ithout practical e2perience, no one can ac,uire complete kno+ledge( Dalue of theoretical kno+ledge is insignificant, if practical e2perience is not added( *t is more reali8ed in the study of Business +here practical e2perience plays an important role( Bachelor of Business Administration 9BBA: program is designed +ith an e2cellent combination of practical and theoretical aspects( Students are re,uired to prepare different Assignment in various courses( As the students of BBA to fulfill the re,uirement of this Degree, +e +ere assigned to make a term paper on -.#commerce/( 1o enrich our kno+ledge on .;, +e have tried our best to use this opportunity( After observing systematically, +e have prepared this term paper on the basis of our findings and observation relating to the topic( &b'ecti"es of the Stud#: (eneral &b'ecti"e: 1he general ob)ective of preparing this report is evaluation of different e#marketing practices that are applied in different organi8ation and to fulfill the re,uirement of our course organi8ational behavior through gaining the practical e2perience( Specific &b'ecti"e: 1he specific ob)ective of preparing this report is C 1o fulfill academic re,uirement, 1o find out the real picture of e#marketing practices in Bangladesh 1o get an overvie+ of present and future situation of e#marketing in Bangladesh 1o dra+ a comparable picture of the theoretical approach and the practical applications( 1o gather practical kno+ledge about e#marketing 1o enrich our theoretical, and practical ability

Methodolog#:
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1o make the Assignment more meaningful and presentable, t+o sources of data and information have been used +idely( Source of )ata

PRIMARY DATA

SECONDAR Y DATA

6igure: Sources of data Both primary and secondary data sources +ere used to generate the report( *rimar#: <roup study of the selected cases, our perceptions and observation, and discussing +ith the course teacher( Secondar#: : 1he secondary information has been e2tracted from various te2tbooks on .# marketing( Ether notable information that +as used for this report +as the information gathered from internet( 4imitation: *n spite of having the +holehearted effort, there +ere some limitations, +hich acted as a barrier to conduct the program and for doing an empirical research +ork, such as: Time and budget $onstraint:

1he study is based on the analysis of .#marketing( But this allocated time is not enough for a complete and fruitful study( Lack of E!perience:

Due to lack of e2perience, there is a chance of having some mistake in the report though best effort has been applied to avoid any kind of mistake( Source Limitation:

1here +ere not sufficient source from +here +e can collect the data %nfrastructure: Status and %ssues
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*nternet services are directly dependent on the telecommunication infrastructure of the country( 1he Bangladeshi telecommunication sector is characteri8ed by poor level of penetration, high cost to access and a lengthy +aiting period( Although the Bangladesh 1elegraph and 1elephone Board 9B11B: continues to be a monopoly in providing basic telephone connections, the private sector5s involvement in cellular phones and as *nternet Service Providers 9*SP: have been allo+ed( Despite the need for easy and affordable access to *nternet services, B11B5s pricing and regulatory strategy on *SPs are restrictive( B11B5s decision to itself offer *nternet services since >>> has caused concerns among private providers as they are e2empted from paying fees and royalties to the government( B11B5s monopoly over long distance and international voice traffic remains protected by the &ational 1elecommunications Policy 9&1P>0: until $''' and $' ' respectively( 1his has been a consistent impediment for the gro+th of e#commerce( A proven important catalyst in the promotion of e#commerce, Doice over *nternet Protocol 9Do*P: is prohibited in Bangladesh( Demand for Do*P has ho+ever, been increasing and the industry has been urging the government to liberali8e the international traffic( 1he &1P>0, enacted in >>0, suggests establishing an independent regulator, the Bangladesh 1elecommunications "egulatory ;ommission 9B1";:( =o+ever, B1"; is yet to be operational 9 "ob, >>>:( Governance Bangladesh has an intractable problem of poor governance( 1his has been manifested in the form of continued active involvement of politicians and public officials, often in collusion +ith the private sector, in adopting unfair business practices( As a conse,uence, institutions continue to remain +eak and legal and regulatory reforms are difficult to implement( "ent seeking activities galore, discouraging competition and promotion of efficiency( Poor governance can be both a cause and an indirect effect of ineffective e#commerce development( *f the cost of doing business remains high, characteri8ed by bottlenecks, bureaucratic red tape and corruption, the efficiency gains from e#commerce becomes mute( 1rade and commerce through e#commerce assumes business norms and practices that are mutually acceptable or understandable bet+een buyers and sellers( Poor governance discourages trade in general and e#commerce in particular( 1he ma)or reasons for poor 6oreign Direct *nvestment 96D*: in Bangladesh are its small domestic market, poor infrastructural facilities, +eak governance and poor la+ and order conditions( Bureaucratic red tape and corruption also dissuades domestic investment( .commerce and 6D* are likely to reinforce each other5s presence and gro+th( Acceptance
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and successful application of e#commerce +ould enhance the business environment, sending signals to foreign investors that it is becoming easier to do business in Bangladesh9 Mann, $''':( Major Constraints to E-marketing 1his paper highlights various constraints to commerce and trade in general and e#commerce in particular( 1oo fe+ telephone connections Absence of a strong independent regulatory body for the telecommunication sector Absence of encryption la+ that precludes acceptance of digital signature( Strong dependence on 4etter of ;redit 94F;: to conduct international transactions( &on#issuance of international credit cards for cross border transactions( *nterest rate ceiling on e2port loans( Business-to-(o"ernment +B,(- Scenarios 1he government is a ma)or buyer of goods and services from the private sector( 1ypically, the government procures goods and services by inviting tenders( 1his has been the traditional method of any government procurement for goods and services( 1ender notices are published in the ma)or national dailies follo+ed by selling the "e,uest for Proposal 9"6P: documents to the interested bidders( *f any bidder seeks clarification on any aspect of the "6P, the customer is mandated to notify that clarification to all bidders by mail( *n addition to costing money and taking time, such notification sometimes forces the customer e2tending the bid# closing deadline 97orld Bank, >>>:( Bidders also obtain the "6P document -unofficially/ for a comprehensive understanding of the Gscope of +ork5 as +ell as for assessing their o+n capability( 1he availability of the "6P and other relevant documents on#line provides an alternate choice, thereby reducing the monopoly rent that can be e2tracted( *n order to prevent such unfair practice, the Bangladesh 1elegraph and 1elephone Board 9B11B: initiated publishing the "6P documents of selected pro)ects in its +ebsite( 1his immediately stopped the illicit practice of unofficially selling the "6P document, and only competent bidders +ere able to procure the "6P documents( *n addition to reducing the e2tra administrative burden of B11B, it also enabled B11B to close those bids +ithin a reasonable timeframe( 1he posting of the "6P

Telecommunications: An %ntegral *art of E-$ommerce

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Access, pricing, and the ,uality of *nternet services are critically dependent on the status and performance of the telecommunications sector( 1he telecommunication sector of Bangladesh is characteri8ed by poor level of penetration 9'(A telephone for every highest in the +orld, and a lengthy +aiting period ## average +aiting period for a ne+ E-Banking Mechanism #utomation and E$T in t%e $inancial &ector: *n Bangladesh, electronic fund transfer is at an early stage and used on a very limited scale( .lectronic banking, +hich is highly dependent on the application of *1, has been pioneered by the foreign commercial banks( 1he local banks are yet to be fully automated( Most local banks use computers on a stand#alone basis( 1he e2tent of computeri8ation in the local banks is limited to database management and electronic communication 9through e#mails: only( A fe+ foreign commercial banks and local banks are offering on#line banking facilities in the form of Automated 1eller Machines 9A1M: and local credit cards( Enly one multi#national bank is no+ practicing on#line fund transfer bet+een its branches, and t+o other local banks are supposed to introduce it +ithin $'' ( Also, the banks no+ offering A1M facilities have formed a common A1M pool( Under this system, a customer of any bank in the pool can receive the services using the same .uman $apital Successful application of e#commerce demands not only availability of technology and infrastructural facilities but also a skilled manpo+er that can appreciate and apply it( Bangladesh lacks skilled manpo+er and kno+ledgeable managers in the *1 sector( ;omputers are primarily used for +ord processing, making presentations, e#mails in selected formal sector business establishments( =o+ever, the communication is constrained by the ,uality of verbal and +ritten communication skills in .nglish, +hich is mediocre at best, even among university graduates( *f Bangladesh aims to interact closely +ith the international $onclusion Synergy bet+een telecommunications and information technology has the proven capability of monitoring and administering the real#time transactions( 1herefore, liberali8ing the telecom and *1 sectors as +ell as reforming the country5s financial and commercial procedures is the preconditions of successfully implementing ecommerce in Bangladesh( *n the case of marketing, simply having a +ebsite in the vast sea of the *nternet is not sufficient( Uniformity is an important factor in the commencing of contracts through the '' persons, <raph :, high cost to access, H%A connection fees for each telephone, one of the

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*nternet( 1herefore, to take advantage of the ne+er opportunities that *1 development presents, the Bangladeshi companies have to attain internationally /eference:
Ali, Syed Ashraf, 1995. Foreign Exchange and Financing of Foreign Trade, Lita Academics, Dhaka. The Asia Foundation, 2000. Bangladesh Export-Apparel Industry: Into the 21st Century the ext Challenges, cto!er, Dhaka. A"ad Dr. A. #., Dr. $. $. %. &oarder and $d. '(!al, 199), !u""ary of #eports on $ruguay #ound Agree"ents and #elated Issues, $inistry of *ommerce, +o,ernment of the -eo.le/s 0e.u!lic of 1an2ladesh. 1akht, 3aid, 1999. %olicy Induced Constraints to !&E 'e(elop"ent in Bangladesh, A re.ort .re.ared for the 4SA'D funded & 1S -ro5ect. 1an2ladesh 1ank, 1999. Annual #eport 1))*-)+, Dhaka. $c*onnell 'nternational, 6'TSA, 2000. #is, E-Business: !ei-ing the .pportunity of /lo0al E-#eadiness1 $ann, *atherine L., Sue 7. 7ckert and Sarah *leeland #ni2ht, 2000, A %olicy %ri"er: /lo0al Electronic Co""erce, 'nstitute for 'nternational 7conomics, 6ashin2ton D*. $inistry of *ommerce, +o,ernment of 1an2ladesh, 2000. Trade %olicy #e(ie2, April 2333, Dhaka. -olicy 'm.lementation and Analysis +rou. 8-'A+9, 1995, %olicy I"ple"entation and Analysis /roup, Final #eport, the $inistry of 'ndustries, + 1:4SA'D, Dhaka. -rice;aterhouse*oo.ers, 1999. Bangladesh Teleco""unication !ector #efor" %ro4ect, Dhaka. 0a! A!dur, 1995, #efor"ing the Bangladesh Tax !yste" for Industrial 'e(elop"ent, -'A+, $inistry of 'ndustries:4SA'D. 0a! A!dur, 199<, #ecent %rogress in Trade 5i0erali-ation and industrial 'eregulation, -'A+, $inistry of 'ndustries:4SA'D.

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