Experts: E-commerce to spearhead Bangladesh's trillion-dollar economy

Black_cats · Jul 31, 2023

Experts: E-commerce to spearhead Bangladesh's trillion-dollar economy

E-commerce companies must grasp their unit economics and prioritize sustainable growth

Tribune Report
Published: July 30, 2023 10:34 AM | Last updated: July 30, 2023 10:34 AM

As Bangladesh accelerates towards becoming a $50 billion economy, removing some regulations could go a long way in fostering growth of the e-commerce industry, experts said at a discussion.

Industry experts called for enforcement of existing rules and regulation such as empowering the Director of National Consumer Right Protection (DNCRP), infrastructural support in terms of technology, awareness programs and so on.

The panel discussion was moderated by Ambareen Reza, co-founder and CEO of foodpanda Bangladesh, which took place at the Bangladesh Startup Summit 2023 held at the capital's InterContinental Dhaka, earlier Saturday (July 29, 2023).

Although there is a concern that excessive regulation of the ecommerce ecosystem could have adverse effects, it is essential to acknowledge that we already have a well-established framework of laws enforced by DNCRP and other regulatory bodies.

By effectively implementing these regulations, Waiz Rahim, venture partner at Sturgeon Capital, said: “We can guarantee a responsible and ethical business environment, minimizing any potential misdeeds.”

He also said that mobile data prices acted as a barrier to internet usage. Hence, to make users comfortable in purchasing data, it was important to streamline data packs.

Ambareen Reza, co-founder and CEO of foodpanda Bangladesh, said: “Over time, the government has consistently demonstrated tremendous support to various sectors in Bangladesh, and it is now our responsibility as industry experts to advocate for similar backing. Unlocking the full potential of e-commerce hinges on collaborative efforts from both sides."

E-commerce companies must grasp their unit economics and prioritize sustainable growth, while also receiving essential infrastructural support in the form of technology advancements, awareness programs, and other crucial resources, she added.

Sadia Haque, co-founder and CEO, ShareTrip; Asif Zahir, founder and managing director, Sindabad.com; Afshin Moayed, managing partner, Razor Capital; and Waiz Rahim, venture partner, Sturgeon Capital, provided insights regarding the future of the e-commerce sector within the country as panelists.

Sadia Haque, founder CEO of ShareTrip, said: "It is essential for both local venture capitalists and foreign investors to broaden their perspectives and not limit their considerations to only early-stage startups in Bangladesh. Giving attention to companies that have already established a presence over the years is equally important, as it enables these companies to truly realize their vision.

Unfortunately, this aspect is often overlooked and requires prompt attention, she added.

Furthermore, foreign investors should also take into account the capacity of the fund as a crucial factor in fostering the growth of e-commerce startups, she said, adding that by recognizing this vital element, they can contribute significantly to the advancement of the startup ecosystem.

Asif Zahir, managing director of Sindabad.com, said: "In the B2B sector, customers frequently request reductions in advance income tax (AIT) and value added tax (VAT), which can result in decreased margins for businesses.

While it is reasonable that these policies were implemented in response to fraud incidents that occurred in 2021, it is crucial to strike a balance to avoid excessive regulation of the industry. Overly prescriptive laws may create unfavorable conditions for numerous industries, so a careful and thoughtful approach is necessary to ensure a thriving business environment, he added.

Hosted by Startup Bangladesh Limited, the flagship venture capital company of the Information and Communication Technology Division of the government, Bangladesh Startup Summit brought together startups, enterprises, venture capitalists, angel investors, regulators, think tanks, and experts from various countries and industries.

Through seminars, workshops, panel discussions, and other events, this two-day event provided deep insights into macro trends and market realities, helping startups to leverage opportunities in global markets.

Additionally, this event served as an opportunity for entrepreneurs and investors to interact, share ideas and collaborate.