Time to expand e-commerce to rural areas

Over the past year, as many Bangladeshi consumers have spent most of their time at home, either because of the mandated lockdowns or by choice, they have been buying more goods and services online, instead of purchasing from brick-and-mortar stores. 

Companies, organisations, and business entities have become innovative by allowing consumers to order conventional and non-conventional goods and services online from the safety and comfort of their homes. The evidence has become apparent with the increased online sale of cattle during Eid-ul-Azha, which was significantly higher compared to last year. 

The Covid-19 pandemic has drastically accelerated the migration to electronic commerce, with the expected five-year trajectory being achieved in just a matter of months. Owing to the massive infrastructural and technological advancement in the country, e-commerce has become a popular and increasingly conventional option besides traditional retail, drastically altering people's lifestyles. 

E-commerce has been hailed as the business revolution of the information age. It ensures the adoption of practices that promise significant productivity improvements and increased business opportunities. 

Nevertheless, if the recent complications in the industry have taught us anything, it is that the growth is still largely under construction. While there has been significant development in the e-commerce sector, the growth is not uniform throughout the country. 

Practically, everything that the urban consumer needs can be ordered online, which saves both time and money, making it appealing for urbanites. Businesses and consumers that are located in Dhaka and Chattogram have been quicker to adopt e-commerce than those in rural areas.

Research conducted by Kaymu reveals that over 80% of e-commerce traffic in Bangladesh comes from the country's three major cities, Dhaka, with 35% of total traffic, closely followed by Chattogram at 29% and Gazipur with 15% of total e-commerce activity each year. This is particularly true due to low Internet penetration in rural areas.

Furthermore, income levels are lower, and poverty is higher in rural areas of Bangladesh. According to Eurostat, individuals in densely populated regions utilise  e-commerce more often compared to rural areas. Hence, the rural sector has been slow to embrace new business practices. 

On the other hand, the Internet and technology have been critical tools in connecting people to new opportunities and life-enhancing services, driving e-commerce growth and helping people progress towards a digital society. 

Illustration: TBS

Mobile phones remain  the primary means of Internet  access and is the key technology for reaching the underserved in Bangladesh, especially low-income populations. 

The country launched its first 3G services in 2013 and its first 4G services in 2018. When we combine this with Bangladesh's current mobile Internet  penetration of approximately 52%, it reveals the ample opportunities that are available to the consumers of the rural areas. 

We have seen phenomenal growth in accessing mobile phones and the Internet leading e-commerce into a new dimension. However, it is vital to establish and provide these facilities to the majority of the population living in rural areas.

Additionally, business practices that facilitate new market opportunities and offer productivity improvements are particularly important for the rural sector. On account of the e-commerce industry's high level of dependence on consumer behaviour, rural areas cannot afford to delay the introduction of e-commerce practices any further. 

Businesses must understand the customers' requirements and gradually achieve operational excellence using the proper techniques. Operational excellence involves applying the right digital tools and processes to increase central and local efficiency, decrease operating costs, and empower staff to deliver higher-value services.

While most online shops have already embraced technology extensively, there are newer solutions that take efficiency and quality improvements to the next level by radically reducing the need for manual and error-prone tasks. 

Thus, it is of utmost importance that we start digitising time-consuming internal tasks. Moreover, businesses must create high-value and personalised  interactions with customers. 

Personalisation is now of paramount importance if we want to keep customers content and ensure they keep ordering. Furthermore, optimising the workforce and integrating physical and digital worlds will eventually be needed to reach operational excellence.

In recent years, there has been increased participation in e-commerce activities among rural communities in Bangladesh. Several companies are helping to shrink the rural-urban participation gap in e-commerce. 

Daraz Bangladesh, for example, has put a stride forward with the expansion of Daraz Express (DEX). It is a premium shipping service that provides delivery across the country while enhancing customer experience in terms of faster delivery. 

From providing one-stop solutions for customer pickup and return drop-off to ensuring customer convenience, DEX Hubs are supporting the spread of online businesses in rural and remote areas of the nation. Increasing physical presence helps gather prospective customers' confidence and ensures that they become aware of the platform.

Our country's strength lies in its growing economy, increasing digital adoption and core technological capabilities. The Covid-19 pandemic has given us the opportunity to create a robust e-commerce industry and allow firms to reach operational excellence. 

Khondokar Tashfin Alam, is the Chief Operating Officer, Daraz Bangladesh