E- Business in Bangladesh During the Pandemic

Situation of COVID-19

Sheikh Mahmud Rafin

ID: 124

Batch: Marketing 23rd

Section: B

E- Business Course Code: 415 09 August, 2020

 A Report

on

E-Business in Bangladesh During the Pandemic Situation of COVID-19

Course Title: E-Business

Course Code: 415

Submitted To: Dr. Md. Moktar Ali

Professor
Department of Marketing
University of Dhaka

Submitted By: Sheikh Mahmud Rafin

Roll: 124
Section: B
Batch: Marketing 23rd

Date of Submission: 09 August, 2020

 Letter of Transmittal
09 August, 2020

Dr. Md. Moktar Ali

Professor

Department of Marketing

University of Dhaka.

Subject: Submission of report on “E-business in Bangladesh During the Pandemic Situation of

COVID-19.”

Respected Sir,

Here is the report on “E-business in Bangladesh During the Pandemic Situation of COVID-19”
that you assigned to prepare this report as a part of E-Business course requirement. This report can
be used to get general information of the impact of COVID-19 on the E-business in Bangladesh.
To write this report, I had to take the from the internet, articles and books.

I am pleased to be granted with this vital opportunity and grateful for your assistance.

Faithfully yours,

Sheikh Mahmud Rafin

Id: 124

Section: B

Batch: 23rd

Department of Marketing

University of Dhaka
 Acknowledgement
First of all, I want to give thanks to Almighty Allah for giving me the opportunity to complete this
report. Then I would like to express grateful thanks to my honorable professor Dr. Md. Moktar Ali
for his kind cooperation and helpful guidelines for this report.

Also, I am thankful to those people who helped and supported me to complete this report.
 Executive Summary
E-business in Bangladesh has got moderate attention from people since 2013. And from last couple
of years e-business has experienced rapid growth as the number of smartphone users increased and
also the number of internet subscription. It is expected that by 2021 this market in Bangladesh will
worth more than BDT 70 Billion and Bangladesh will become one of the major market place for
e-business in the South Asia. But as there is sudden break out of COVID-19, this situation has
created both positive and negative experiences for this business such as increasing number of
demands for necessary products on online, increasing online sales and shortage of workers like
deliveryman. But the positive impacts are not for all online business. The e-businesses like online
grocery, online medicine services and e-health services are experiencing high demands whereas
the online restaurants, online computer markets and ride sharing services are facing downward
growth during this crisis. But as there is no opportunity for offline sales, many businesses are
creating their online presence through creating social media account, existing channels, and
creating new contents. However, the businesses can use SOSTAC model to tackle with this
pandemic situation if they want to join in the online actives. For that, they must analysis their
current situation, setting meaningful objectives, strategy, tactics, action and control. As people are
now getting used to online purchasing because they cannot visit the offline stores for maintain
social distance and health safety issue. It will create some positive prospects for the future e-
business in Bangladesh like online purchasing and selling will rise, the expense for offline
marketing will reduce, there will be more e-payment services and the businesses will maintain
efficient supply chain management. Last of all, it can be said that it is an opportunity for businesses
to attract more customers through online during this crisis. And ultimately this adoption of Digital
Business will create a positive impact in the E- economy of Bangladesh in future.
Table of Contents
Introduction ..................................................................................................................................... 1

Situation of E-Business During COVID-19 ................................................................................... 2

Online Businesses having positive & Negative Impacts due to COVID-19 .................................. 3

Advantage of E-Business in Fighting with COVID-19 .................................................................. 5

Businesses Creating their online presence during COVID-19 ....................................................... 6

Businesses Implement E- Marketing Plan Using SOSTAC Model ................................................ 7

Future Prospects of E-Business in Bangladesh ............................................................................... 9

Conclusion .................................................................................................................................... 11

References ..................................................................................................................................... 12

List of Figures
Figure 1: E-businesses in Bangladesh……………………………………………………………..2
Figure 2: SOSTAC Model…………………………………………………………………………7
Introduction
E-Business has entirely changed the traditional business world and is moving forward through
adapting the new innovations of technology for highly valued products, reducing cost and saving
time with a view to ensuring maximum customer satisfaction ("What is Digital Business? |
Liferay", 2020). Some of the renowned examples of E-Business are Netflix, Disney etc. Keeping
pace with the developed countries, E-Businesses also possesses a great impact in the business
environment of the developing countries like Bangladesh. Though E-Business in Bangladesh
started from 2006, but it got attention from the year of 2012-2013 and as the number of using smart
devices has increased and also the number of internet subscriptions Digital Business has faced
excessive upward growth in the last couple of years. And it is expected that by 2020 the market of
Digital Business will worth BDT. 70 billion and Bangladesh is expected to be a major market place
for Digital Business in South Asia. Though in Bangladesh people are not all aware about the e-
business system. They like to prefer brick & mortar store for purchasing products rather purchasing
online. Because in online purchasing people do not get the opportunity of touching and feeling the
products that they want to buy. But during this pandemic situation of COVID-19, the cautionary
steps such as government holiday and lockdown system taken by the government of Bangladesh
has made an extensive impact on people in preferring online buying. However, online selling for
the business-like restaurant, apparel, grocery, electronics have experienced changed in their sales
comparing to the normal situation before COVID-19. Also, the businesses as offline stores like
movie theater, electronics stores, shopping malls are facing great trouble to continuing their
businesses during this pandemic situation. In this pandemic situation, the businesses which has
adopted the online technology before COVID-19, doing great and those business which did not
use online innovations are trying to adopt to keep pace with other online businesses. In this report,
the Digital Business in Bangladesh will be discussed in the context of its activities, threats and
opportunities during this current pandemic situation of COVID-19.

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Situation of E-Business During COVID-19
As customers are totally locked up in their home, all the activities including all business
transactions have shifted to online, and in this situation, this shift is only going to continue.

During this Covid-19 pandemic, variable businesses are in Bangladesh experienced great disaster
in their sales, because almost all business in Bangladesh depends on their merchandise sales. And
also, implementation of social and physical distancing makes people careful by limiting from
going outside of their home. However, this situation causes a great fall for the offline sales of many
businesses. The business people who rely on physical space such as super shops, traditional food
markets, restaurants, car dealers, cinemas, they are suffering losses.

Figure 1: E-businesses in Bangladesh

Source: (ANON, 2020)

For the precautionary system against COVID-19 taken by government of Bangladesh impacts on
the transactions in the business-like restaurants, markets, shopping centers, online transportation
and many small & medium enterprises. But because of this pandemic situation, people in several
region have changed their shopping pattern and fulfill their basic need through online. That’s why
the situation is in contrast to online markets comparing to the offline stores. Several e-commerce
and e-service industries are experiencing positive growth except some online businesses which
having downturn growth in this pandemic. However, there are some common problems that all e-
businesses are facing in this crisis. During this pandemic of COVID-19, convenience in meeting

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orders has become the main objective for online businesses as they are experiencing rapid growth
in the number of customers and orders. This sudden increase in demand for online business has
met with a lack of preparation in terms of capacity, mobility and resources as they struggle to meet
this unnatural demand (Express, 2020).

Companies which deliver groceries online are trying to improve their capacity through the
employment of more delivery men. The average order size for these companies rise from an
average of BDT 1300 to BDT 3750. These companies now deal with over 5000 orders a day and
for meeting the number huge number of demands, they are slashing convenience and setting
maximum orders limit and lengthening delivery times. This high demand also affecting in the
management of supply chain in a short time. Also, labor shortage has risen up and workers have
shifted out of Dhaka temporarily. Further constraints on delivery mobility have risen due to the
law of enforcement of workers safety, provisions of proper masks & PPE, sanitizations which have
added extra liabilities for these businesses. An E-CAB study determined a loss of BDT 666 Crore
directly to the industry as a whole, with significant loss in F-commerce (Express, 2020).

On the other hand, this crisis has made way to innovation and collaboration of other businesses.
For example, Bikroy.com the largest online marketplace for C2C platform have introduced a
category called Essentials to help local suppliers and find markets. Food panda, HungryNaki,
Pathao which are totally focused on food delivery have also joined in the delivery system of
grocery, medicine and other items through listing the suppliers on their apps.

However, in this crisis not all E-business are having upscale growth, some E-business are having
downturn in their sale. Let’s discuss these sectors briefly about their situation during this
pandemic.

Online Businesses having positive & Negative Impacts due to

COVID-19
Online Grocery Shops: Due to the lockdown system, people are not going outside of their home.
They are keeping social distance in dealing with COVID-19. But maintain this social distance,
they cannot buy their necessary grocery needs from the brick and mortar stores. As a result, they
are forced to think of alternatives to grocery shopping from brick and mortar stores Many urban
inhabitants hence turned towards online grocery shopping platforms. The current crisis has been

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regarded as the biggest opening yet for online grocers. Many online groceries are experiencing
huge number of orders a day. Chaldal.com and Meenaclick.com are having access pressure on
their orders. They are improving their efficiency to meet this increasing demand and trying to grab
this opportunity to increase their online selling in this pandemic. The influx of new consumers in
this industry is a great opportunity if they can be turned into loyal consumers. However, that
requires proper service and delivery within the specified time. Platforms like Chaldal are failing
to achieve those requirements due to obstacles such as reluctance from perceived safety concerns,
inability to deliver outside Dhaka, reduced number of deliverymen, lack of safety equipment,
shorter time window per day, etc. If the platforms can overcome such obstacles, they will be able
to experience significant market growth and redefine online platforms as the norm for grocery
shopping ("E-Commerce in Bangladesh Struggling to Capitalize on Opportunity - LightCastle
Partners", 2020).

Online Restaurant Services: Restaurants are the worst victims in this crisis. Almost all the
restaurants have closed during this COVID-19. As a result, they have no sales revenue and also
they are meeting with great loss that they cannot meet only their operating cost. Though some
restaurants have continued their online operations but this strategy does not help to get better result
as their expectation. Because customers are now more serious about hygienic products and
customers are feeling more hesitation on ordering online foods because of health safety issue.

Online Medicines & Sanitization tems: Online medicine services experiencing high demands in
their online orders. As people are staying in their home, they are ordering their medicines through
online apps to avoid social distance in the dispensary. Also, other items like toiletries, sanitization
items, masks are having great demand in this pandemic. That’s why the medicinal stores are trying
to adopt this market through online platform.

Ride Sharing Services: Before Covid-19, the online transportation system has got outstanding
responses by the people. But now to limit the spread of COVID-19, ridesharing by Uber and Pathao
had been banned by the Bangladesh Road Transport Corporation (BRTC).

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E-Health Services: The E- e-health service industry is facing a sudden pressure in phone calls
consultation with 30% increase daily because of the situation of COVID-19.

Online Clothing Services: Before COVID-19 people in Dhaka city are quite used to shopping
cloths from online sites. But due to this pandemic, the sales for clothing decreased at a high rate.
However, the clothing businesses have faced great loss on the occasion of Pahela Baishakh and
Eid during this pandemic. Because in these two occasions clothing businesses usually experienced
great sales revenue. But due to this pandemic customer did not buy cloth for these occasions. Also
customers can’t go to the physical store and the store are closed, that’s why customer are now
buying their clothes from online.

Online Computer Buying Services: People in this lockdown are feeling hesitation when they
think about buying a mobile phone or computer in this lockdown. As these are high complex
product, people want to go to the stores to buy themselves. However, these electronic stores start
online selling but they are not getting expected responses.

As the e-commerce and e-service industries are highly dependent on daily wagers, the sudden
outflow of workers from the city also led a serious workforce shortage. But now the daily wage
earner is coming to Dhaka city for earning, so it can be said that the shortage of workers will not
create as much problem for these Digital Businesses.

Advantage of E-Business in Fighting with COVID-19

In the fight against COVID-19, economic activities that require close physical contact have been
severely restricted. Governments around the world have put in place containment measures to slow
down the rate of infection, including lockdowns, border closures, and restrictions on economic
activities. Even where strict restrictions are not in place, consumers and businesses are opting for
“social-distancing” to avoid physical proximity and potential contagion. Activities deemed as
essential, such as grocery shopping and visits to health facilities, have not yet seized up in most
countries – but are key remaining hotspots for potential new infections. In this context, e-
commerce – defined broadly as the sale of goods or services online - is emerging as a major pillar
in the fight against COVID-19. First, e-commerce can help further reduce the risk of new
infections. By offering online grocery delivery, for example, supermarkets can help customers
avoid in-store visits. Online payments can obviate the need for in-person cash transactions.

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Second, e-commerce can help preserve jobs during the crisis. For instance, while restaurants
cannot accommodate in-venue dining, many have resorted to offering online take-out services –
maintaining a basic revenue stream that can help keep the business afloat through the crisis. In
some cases, e-commerce can even create new jobs during the crisis – as consumers shift towards
online offerings. Third, e-commerce can help increase the acceptance of prolonged physical
distancing measures among the population. The continued availability of online shopping and
online services, including video chats, movie streaming, and online classes, makes it much more
bearable to live and work while limiting physical interaction with others (World Bank Group,
2020).

Businesses Creating their online presence during COVID-19

It has already seen that some businesses have adopted the online strategy before this pandemic and
they are now trying to improve their business to become effective and efficient to increase the
revenue stream through online. Other businesses which have not adopted the online strategy yet.
They are now trying enough to go on online so that they can keep pace with other online business
and also, they can have sales revenue to cover up their minimum operating cost. But it’s not
possible in Bangladesh to have great response in every sector through online. Because all the
people in Bangladesh are not used to purchase from online. and that is Bangladesh is now have the
4G internet services through which the internet service can cover the major town or city in every
division and that is a great opportunity for the businesses which can use online strategy. Also, the
businesses can cope up with this pandemic situation by creating an internet presence and stay
connected with customers to held business transactions. For online presence business owners are
following some tips to sustain their business in this crisis situation.

Social Media Account: Apart from the existing online business, the other offline businesses are
now trying to capture the customer base through social media during this crisis. Through creating
E- presence on social media like Facebook, YouTube, Instagram etc. the offline business can share
their massage and information to the customer easily and quickly. In this lockdown customer
cannot go to the brick & mortar stores because of social distance. But when the brick & mortar
stores avail themselves on the online sites the customer can easily find out the e by staying at home

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and order from the page or site ("Helping Businesses Create an Online Presence During COVID-
19 (Coronavirus)", 2020).

Using Existing Channel: The business can use the existing channel like company’s website or
customer’s email or phone numbers where they can share the information about their business
activities such as their business hours, available goods or services. Also, they can provide
information about health safety to attract the customers. The businesses also can create Facebook
page where they can use instant-reply massage, Instagram direct massage and messenger to
connect with the customer in real time ("Helping Businesses Create an Online Presence During
COVID-19 (Coronavirus)", 2020).

Creating New Content: The existing business are creating new contents for their customers in
this pandemic situation. To manage customer confusion, businesses can review contents to make
sure it reflects their most recent changes. For example, some restaurants are no longer able to
accommodate a dine-in experience, they can update their Page or create a new post to let customers
know about takeout or delivery options that are still available or newly available ("Helping
Businesses Create an Online Presence During COVID-19 (Coronavirus)", 2020).

Businesses Implement E- Marketing Plan Using SOSTAC Model

During this pandemic of COVID-19 different small & medium offline businesses can use

SOSTAC
Model

Situation Objective Strategy Tactics Action Controll

Market & Appropriate use Defining

Mission & STP & measuring the
Demand of Marketing Structure
Vission Marketing Mix &responsibilities outcomes
Analysis Mix

Integrated
Resource Customer Communication Training & Comparing
Customer Motivation
Analysis Satisfaction Channel with Standards
Database

SOSTAC model to implement new E- marketing strategy. Through SOSTAC model businesses

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can analyze and review their current situation, objectives, strategy, tactics, actions and control
(Stephenson, 2020). The briefly discussion of these key areas are given below:

Figure 2: SOSTAC Model

Source: Author

Situation Analysis: Any business need to first analyze the market, customer demand and
competitors to implement E- marketing. During this crisis, customers are getting dependent on
Digital Business as they are staying home. So, the businesses must need to identify their customer
base who prefers E- purchasing. Then they need to analyze the resources through which they can
learn about how their performance will be to fulfill the customer demands. And also, they can
review their competitors about how they create value to the customer. For these facts, businesses
can do SWOT analysis. According to these analyses, the business will get a review of their current
situation.

E.g. if a brick & mortar restaurant business want to implement E- marketing plan they need to
analysis the current situation of the online market, demand & online competitors and comparing
their strengths, weakness, opportunity and threats with their existing resources.

Objective Analysis: In this stage, businesses must have to clarify its objectives from the overall
context such as mission and vision, customer satisfaction, and the targeted value for implementing
E- marketing plan.

E.g. to start an online business, a restaurant business must set relevant objectives such as increasing
online sales, reducing time and cost, additional value offering through online operations.

Strategy: Any businesses have to set strategy of how it will achieve its targets. For Strategy it
needs to analyze STP and marketing mix. Through which it can segment its marketing, target the
customers, and position itself among other online competitors through unique value proposition.
It can use a well database system to integrate with customer database.

E.g. a restaurant business can use a database system through which they can identify the level of
customer engagement, customer place and number of orders and prioritization.

Tactics: Business use tactics during the implementation process to choose appropriate marketing
mix and communication channel. For that businesses can build a contact plan over the customer

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lifetime. Apart from, businesses can use emails, interactive ads, social media or mobile apps to
communicate with customers.

E.g. restaurant business are communicate with the customers through Facebook pages, mobile
massage, and the delivery food apps in smart devices.

Action: In this stage, the E- marketing plan will define the need for responsibilities and the
structure to applied, then guidelines to follow, and need for any training motivation and internal
marketing.

E.g. a restaurant business needs a well-structured system to run online selling operations such as
considering orders, place that orders, prepare the orders, and deliver it to the customer.

Control: This stage involves the measurement and metrics used to estimate the effectiveness of
the strategies being used to attain the targeted objectives. Business needs to measure the
accomplished result with the targeted objective, and also they need to analyze the customer survey,
reports of online sales, by setting different standards.

E.g. according to the online sales during this pandemic situation, restaurant business can estimate
the sales transition compared to offline. And also based on the facts they can change their
strategies.

Future Prospects of E-Business in Bangladesh

Though the crisis of COVID-19 badly affected the brick & mortar stores, it will create some
positive changes in the whole e-commerce system. However, the current business landscape is
going through some drastic transformation. All functions in a business such as marketing, finance,
and other operations are shifting quickly towards online due to this crisis (Kader, 2020).

According to the Daily Observer, it has been projected that there will be more than 18.3 million
internet subscribers in Bangladesh by 2020. And Bangladesh is expected to become a mega sector
for e-commerce in the South Asia ("What Covid-19 means for Bangladesh’s ICT and E- sectors",
2020).

There is a fact that people are changing their buying pattern due to this crisis to maintain social
distance. As they are staying home, they will purchase their needs through online like groceries,
medicines, clothing’s, foods etc. Already the biggest online market places like Daraz.com,
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Chaldal.com, Ajkerdeal.com, Bikroy.com are experiencing excessive order on their site. And it
will increase more in future as people are now getting used to the online purchasing.

But the buying pattern for some high complex products like vehicles, computers, smart phone and
others will not change. Because these products need high involvement for purchasing and people
want to touch and feel the product before purchasing and also there is confusion of getting correct
products through online purchasing. Even then a few people are ordering the products like
computer, laptops and other electronics from online though it will not have a great impact in future.
But if these retailers assure the customers with proper services and also if they can maintain
trustworthy relationship with the customer through online like the Gadget & Gear, Ryans, Startech,
these electronics market will have positive feedback.

So, it is expected that in future the use of e-business for both customer and companies will rise
like online purchasing & selling, efficient in supply chain management. Companies will cut
revenues through reducing marketing as they will give more priority to online marketing. And
also, the use e-payment service will increase.

Overall, E-Business will gain new customers as well as identifying new segments of users who
would otherwise have taken a long time to come to E- commerce. And the situation is likely to
sustain in the coming years and accelerate the growth of Digital Businesses in the coming years in
Bangladesh (Express, 2020).

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Conclusion
It is very hard to say whether COVID-19 will leave or not. It has already affected every sector in
Bangladesh. Specifically, it drastically damages the business sectors. Almost all the businesses
have closed up due to this lockdown. The Government are trying to reinforced the economy. But
general people are hardly doing offline transaction now. People are now trying to purchase from
online to avoid social distance. The biggest online market places in Bangladesh are having huge
amount of order per day. That’s why other business is quickly trying to adopt this online strategy
so that they can keep pace with other businesses. As there is an opportunity of huge number of
internet subscribers in Bangladesh that will help business to attract more customers through online.
Ultimately this adoption of E-Business will create a positive impact in the E- economy of
Bangladesh in future.

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(2020). Retrieved 7 August 2020, from

http://documents1.worldbank.org/curated/en/280651589394091402/pdf/Recommendations-
to-Leverage-E-Commerce-During-the-COVID-19-Crisis.pdf

Express, T. (2020). COVID-19 upside: E-commerce enterprises prosper as sales boom. Retrieved
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Kader, R. (2020). The Coronavirus Pandemic Has Fast-forwarded the Future of eCommerce -
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Stephenson, R. (2020). How to write a E- marketing plan using PR Smith’s SOSTAC® planning
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