Retailing in Bangladesh 2020

Retailing in Bangladesh
Euromonitor International
March 2020
RETAILING IN BANGLADESH Passport i
LIST OF CONTENTS AND TABLES

Executive Summary ..................................................................................................................... 1
Coronavirus (covid-19) ................................................................................................................. 1
Country Insight.......................................................................................................................... 2
Socioeconomic Trends ............................................................................................................. 4
Logistics/infrastructure .............................................................................................................. 6
Informal Retailing ...................................................................................................................... 9
Chart 1 Retailing: Non-Grocery Specialist (a) ........................................................... 9
Chart 2 Retailing: Non-Grocery Specialist (b) ......................................................... 10
Market Data ................................................................................................................................ 11
Table 1 Sales in Retailing by Store-based vs Non-Store: Value 2014-2019 ........... 11
Table 2 Sales in Retailing by Store-based vs Non-Store: % Value Growth
2014-2019 .................................................................................................. 12
Table 3 Sales in Store-Based Retailing by Channel: Value 2014-2019 .................. 12
Table 4 Sales in Store-Based Retailing by Channel: % Value Growth 2014-
2019 ........................................................................................................... 12
Table 5 Store-Based Retailing Outlets by Channel: Units 2014-2019 ..................... 12
Table 6 Store-Based Retailing Outlets by Channel: % Unit Growth 2014-2019 ...... 13
Table 7 Sales in Non-Store Retailing by Channel: Value 2014-2019 ...................... 13
Table 8 Sales in Non-Store Retailing by Channel: % Value Growth 2014-2019 ..... 13
Table 9 Retailing GBO Company Shares: % Value 2015-2019 .............................. 14
Table 10 Retailing GBN Brand Shares: % Value 2016-2019 .................................... 14
Table 11 Store-based Retailing GBO Company Shares: % Value 2015-2019 .......... 14
Table 12 Store-based Retailing GBN Brand Shares: % Value 2016-2019 ................ 14
Table 13 Store-based Retailing LBN Brand Shares: Outlets 2016-2019................... 14
Table 14 Non-Store Retailing GBO Company Shares: % Value 2015-2019 ............. 15
Table 15 Non-Store Retailing GBN Brand Shares: % Value 2016-2019 ................... 15
Table 16 Forecast Sales in Retailing by Store-based vs Non-Store: Value
2019-2024 .................................................................................................. 15
Table 17 Forecast Sales in Retailing by Store-based vs Non-Store: % Value
Growth 2019-2024 ..................................................................................... 15
Table 18 Forecast Sales in Store-Based Retailing by Channel: Value 2019-
2024 ........................................................................................................... 16
Table 19 Forecast Sales in Store-Based Retailing by Channel: % Value Growth
2019-2024 .................................................................................................. 16
Table 20 Forecast Store-Based Retailing Outlets by Channel: Units 2019-2024 ...... 16
Table 21 Forecast Store-Based Retailing Outlets by Channel: % Unit Growth
2019-2024 .................................................................................................. 17
Table 22 Forecast Sales in Non-Store Retailing by Channel: Value 2019-2024 ....... 17
Table 23 Forecast Sales in Non-Store Retailing by Channel: % Value Growth
2019-2024 .................................................................................................. 17
Modern Grocery Retailers .......................................................................................................... 18
Prospects ................................................................................................................................ 18
Competitive Landscape .......................................................................................................... 19
Chart 3 Modern Grocery Retailers: Modern Grocery Retailer (a) ............................ 20
Chart 4 Modern Grocery Retailers: Modern Grocery Retailer (b) ............................ 21
Channel Data .......................................................................................................................... 22
© Euromonitor International
RETAILING IN BANGLADESH Passport ii
Table 24 Modern Grocery Retailers: Value Sales, Outlets and Selling Space
2014-2019 .................................................................................................. 22
Table 25 Modern Grocery Retailers: Value Sales, Outlets and Selling Space: %
Growth 2014-2019 ..................................................................................... 23
Table 26 Sales in Modern Grocery Retailers by Channel: Value 2014-2019 ............ 23
Table 27 Sales in Modern Grocery Retailers by Channel: % Value Growth
2014-2019 .................................................................................................. 23
Table 28 Modern Grocery Retailers Outlets by Channel: Units 2014-2019 ............... 23
Table 29 Modern Grocery Retailers Outlets by Channel: % Unit Growth 2014-
2019 ........................................................................................................... 24
Table 30 Modern Grocery Retailers GBO Company Shares: % Value 2015-
2019 ........................................................................................................... 24
Table 31 Modern Grocery Retailers GBN Brand Shares: % Value 2016-2019 ......... 24
Table 32 Modern Grocery Retailers LBN Brand Shares: Outlets 2016-2019 ............ 24
Table 33 Modern Grocery Retailers LBN Brand Shares: Selling Space 2016-
2019 ........................................................................................................... 25
Table 34 Modern Grocery Retailers Forecasts: Value Sales, Outlets and Selling
Space 2019-2024 ....................................................................................... 25
Table 35 Modern Grocery Retailers Forecasts: Value Sales, Outlets and Selling
Space: % Growth 2019-2024 ..................................................................... 25
Table 36 Forecast Sales in Modern Grocery Retailers by Channel: Value 2019-
2024 ........................................................................................................... 25
Table 37 Forecast Sales in Modern Grocery Retailers by Channel: % Value
Growth 2019-2024 ..................................................................................... 26
Table 38 Forecast Modern Grocery Retailers Outlets by Channel: Units 2019-
2024 ........................................................................................................... 26
Table 39 Forecast Modern Grocery Retailers Outlets by Channel: % Unit
Growth 2019-2024 ..................................................................................... 26
Traditional Grocery Retailers ...................................................................................................... 26
Prospects ................................................................................................................................ 27
Chart 5 Traditional Grocery Retailers: Traditional Grocery Retailer (a) ................... 29
Chart 6 Traditional Grocery Retailers: Traditional Grocery Retailer (b) ................... 29
Channel Data .......................................................................................................................... 30
Table 40 Traditional Grocery Retailers: Value Sales, Outlets and Selling Space
2014-2019 .................................................................................................. 30
Table 41 Traditional Grocery Retailers: Value Sales, Outlets and Selling Space:
% Growth 2014-2019 ................................................................................. 30
Table 42 Traditional Grocery Retailers Forecasts: Value Sales, Outlets and
Selling Space 2019-2024 ........................................................................... 31
Table 43 Traditional Grocery Retailers Forecasts: Value Sales, Outlets and
Selling Space: % Growth 2019-2024 ......................................................... 31
Non-grocery Specialists.............................................................................................................. 31
Prospects ................................................................................................................................ 31
Chart 7 Non-Grocery Specialists: Apparel and Footwear Specialist Retailer (a)..... 33
Chart 8 Non-Grocery Specialists: Homewares and Home Furnishing Store (b) ..... 34
Channel Data .......................................................................................................................... 35
RETAILING IN BANGLADESH Passport iii
Table 44 Non-Grocery Specialists: Value Sales, Outlets and Selling Space

2014-2019 .................................................................................................. 35
Table 45 Non-Grocery Specialists: Value Sales, Outlets and Selling Space: %
Growth 2014-2019 ..................................................................................... 36
Table 46 Sales in Non-Grocery Specialists by Channel: Value 2014-2019 ............... 36
Table 47 Sales in Non-Grocery Specialists by Channel: % Value Growth 2014-
2019 ........................................................................................................... 36
Table 48 Non-Grocery Specialists Outlets by Channel: Units 2014-2019 ................. 36
Table 49 Non-Grocery Specialists GBO Company Shares: % Value 2015-2019 ...... 37
Table 50 Non-Grocery Specialists GBN Brand Shares: % Value 2016-2019 ............ 37
Table 51 Non-Grocery Specialists LBN Brand Shares: Outlets 2016-2019 .............. 37
Table 52 Non-Grocery Specialists LBN Brand Shares: Selling Space 2016-
2019 ........................................................................................................... 38
Table 53 Non-Grocery Specialists Forecasts: Value Sales, Outlets and Selling
Space 2019-2024 ....................................................................................... 38
Table 54 Non-Grocery Specialists Forecasts: Value Sales, Outlets and Selling
Space: % Growth 2019-2024 ..................................................................... 38
Table 55 Forecast Sales in Non-Grocery Specialists by Channel: Value 2019-
2024 ........................................................................................................... 38
Table 56 Forecast Sales in Non-Grocery Specialists by Channel: % Value
Growth 2019-2024 ..................................................................................... 39
Table 57 Forecast Non-Grocery Specialists Outlets by Channel: Units 2019-
2024 ........................................................................................................... 39
Table 58 Forecast Non-Grocery Specialists Outlets by Channel: % Unit Growth
2019-2024 .................................................................................................. 40
Mixed Retailers........................................................................................................................... 40
Prospects ................................................................................................................................ 40
Chart 9 Mixed Retailers: Mixed Retailer (a) ............................................................ 42
Chart 10 Mixed Retailers: Mixed Retailer (b) ............................................................ 42
Channel Data .......................................................................................................................... 43
Table 59 Mixed Retailers: Value Sales, Outlets and Selling Space 2014-2019 ........ 43
Table 60 Mixed Retailers: Value Sales, Outlets and Selling Space: % Growth
2014-2019 .................................................................................................. 44
Table 61 Sales in Mixed Retailers by Channel: Value 2014-2019............................. 44
Table 62 Sales in Mixed Retailers by Channel: % Value Growth 2014-2019 ............ 44
Table 63 Mixed Retailers Outlets by Channel: Units 2014-2019 ............................... 44
Table 64 Mixed Retailers Outlets by Channel: % Unit Growth 2014-2019 ................ 44
Table 65 Mixed Retailers GBO Company Shares: % Value 2015-2019.................... 45
Table 66 Mixed Retailers GBN Brand Shares: % Value 2016-2019.......................... 45
Table 67 Mixed Retailers LBN Brand Shares: Outlets 2016-2019 ............................ 45
Table 68 Mixed Retailers LBN Brand Shares: Selling Space 2016-2019 .................. 45
Table 69 Mixed Retailers Forecasts: Value Sales, Outlets and Selling Space
2019-2024 .................................................................................................. 46
Table 70 Mixed Retailers Forecasts: Value Sales, Outlets and Selling Space: %
Growth 2019-2024 ..................................................................................... 46
Table 71 Forecast Sales in Mixed Retailers by Channel: Value 2019-2024 .............. 46
Table 72 Forecast Sales in Mixed Retailers by Channel: % Value Growth 2019-
2024 ........................................................................................................... 46
RETAILING IN BANGLADESH Passport iv
Table 73 Forecast Mixed Retailers Outlets by Channel: Units 2019-2024 ................ 47

Table 74 Forecast Mixed Retailers Outlets by Channel: % Unit Growth 2019-
2024 ........................................................................................................... 47
Direct Selling .............................................................................................................................. 47
Prospects ................................................................................................................................ 47
Channel Data .......................................................................................................................... 49
Table 75 Sales in Direct Selling: Value 2014-2019 ................................................... 49
Table 76 Sales in Direct Selling: % Value Growth 2014-2019 .................................. 49
Table 77 Direct Selling GBO Company Shares: % Value 2015-2019 ....................... 49
Table 78 Direct Selling GBN Brand Shares: % Value 2016-2019 ............................. 49
Table 79 Forecast Sales in Direct Selling: Value 2019-2024 .................................... 50
Table 80 Forecast Sales in Direct Selling: % Value Growth 2019-2024.................... 50
E-commerce ............................................................................................................................... 50
Prospects ................................................................................................................................ 50
Channel Data .......................................................................................................................... 52
Table 81 E-Commerce by Channel and Category: Value 2014-2019 ....................... 52
Table 82 E-Commerce by Channel and Category: % Value Growth 2014-2019 ....... 53
Table 83 Forecast E-Commerce by Channel and Category: Value 2019-2024 ........ 53
Table 84 Forecast E-Commerce by Channel and Category: % Value Growth
2019-2024 .................................................................................................. 53
Homeshopping ........................................................................................................................... 53
Prospects ................................................................................................................................ 53
Competitive Landscape .............................................................................................................. 54
Vending ...................................................................................................................................... 54
Prospects ................................................................................................................................ 54
RETAILING IN BANGLADESH Passport 1
RETAILING IN BANGLADESH
EXECUTIVE SUMMARY
Strong growth in retailing is due to population growth, urbanisation and rising incomes. Young
mid- and high-income urban consumers are becoming more aspirational and open to buying a
wider range of goods. However, this does not reflect the reality for the country’s rural-dwelling
low-income majority, whose spending remains limited to the absolute essentials. Distribution
issues also present challenges, with modern retailing still underdeveloped and traditional
grocery retailers still dominant.
This report analyses the market for retailing in Bangladesh. For the purposes of the study, the
market has been defined as follows:
▪ Modern grocery retailers
▪ Traditional grocery retailers
▪ Non-grocery specialists
▪ Mixed retailers
▪ Direct selling
▪ E-commerce
▪ Homeshopping
▪ Vending
Explanations of terminology used in this report are as follows:
▪ GBO refers to Global Brand Owner, which is the ultimate owner of a brand.
▪ NBO refers to National Brand Owner, which is the company licensed to operate a brand on
behalf of a GBO. The NBO may be a subsidiary of a GBO or it may be a completely separate
company.
Note:
▪ Market sizes are researched at category level, lower data levels are modelled.
▪ Retailing excludes the following industries and channels: specialist retailers of motor vehicles,
motorcycles, vehicle parts, fuel; foodservice; the rental, hire and leasing of products;
wholesalers; cash and carry outlets; consumer-to-consumer transactions; informal retailing;
and revenues generated by duty free retailers.
▪ Retailing sales value excludes the following categories: motor vehicles, motorcycles, vehicle
parts; fuel; revenue from all services wherever possible (such as banking); and captive and
semi-captive establishments.
CORONAVIRUS (COVID-19)
The analysis in this report was written before the known outbreak of Coronavirus (COVID-19)
on 31 December 2019. Accordant industry data were also built and published prior to this date,
and before the virus started to spread and export internationally. Euromonitor International has
therefore not included analysis relating to COVID-19 in this report, and its potential influence is
not factored into forecast data.
Given its early stage of development, the scale and impact of COVID-19, both at global and
national levels, remains uncertain, but is evolving fast. For the latest insight on COVID-19 and
how it can be expected to impact demand across fmcg industries, readers can access strategic
analysis and regular updates on www.euromonitor.com and via the Passport system, where
new content is being added on a systematic basis as the situation develops.
Country Insight
▪ Many Bangladesh people shop for essentials and perishable items on a daily basis.
Furthermore, many items are generally purchased in small quantities and this is particularly
common among rural communities and low-income consumers. The reason for this is that
average income levels remain low, while the practice of paying workers on a daily basis is
widespread.
▪ Most rural consumers have access only to informal retailers. Informal retailing is present
throughout the country and is as popular in urban areas as it is in rural parts of the country.
However, many consumers shop monthly for non-perishable items such as rice and oils and
fats, buying in bulk as and when they can afford to. Fresh produce is usually bought daily or
on every other day.
▪ Recent years have seen major changes in the shopping habits of more affluent urban
consumers. Among the trends underpinning these changes are the increasingly hectic
lifestyles of people living in major urban areas, which means that they must shop less
frequently. In addition, the proliferation of refrigeration appliances in the homes of affluent
urban-dwellers means that they are able to store fresh food for longer periods of time. This
means that consumers are becoming more interested in shopping weekly, with the weekend
(Friday and Saturday) generally the most popular time to go on a big weekly shopping trip.
▪ Friday is the most popular day for buying non-grocery items such as apparel and footwear
and consumer electronics as this is traditionally a day of rest and consumers have more time
to browse. Shopping centres are common in large cities such as Dhaka and Chittagong and
they are located in both central areas and in suburban districts. In smaller towns and cities
meanwhile, the majority travel to the town centre or a larger city when they want to go
shopping.
▪ Traditional markets remain the default shopping channel for the majority of Bangladeshis and
few consumers shop regularly in modern stores. Most traditional markets are run by the local
authority of the town or city in which the market is located. However, economic development
and the expansion of modern retailing mean that modern channels are attracting growing
numbers of people, particularly in urban and suburban areas of the country. Nevertheless,
demand for modern retailing is limited mainly to mid- and high-income consumers, with less
affluent people viewing them generally as unaffordable.
▪ There is a widespread perception that traditional grocery retailers and informal retailers offer
lower prices and this is the main reason for their popularity among consumers of all income
groups. Some estimates have put the share of informal retailing at 70% of all retail sales in
the country. Street vendors, markets and traditional grocery retailers offer consumers the
option to haggle over prices, something that modern grocery retailers do not offer. However,
strong sales growth is being seen in modern grocery retailers due to the expansion of
Bangladesh’s urban middle class, who view modern retailing as synonymous with high quality
and the convenience of one-stop shopping.
▪ One factor that negatively impacts the operations of modern retailers is that they are liable to
pay higher taxes than traditional and informal retailers. Specifically, products sold in modern
retailers attract a higher rate of VAT. According to Bangladesh’s finance minister, the VAT Act
2012 will be implemented during the current fiscal year (2019-2020). This means that local
traders will have to pay 5% VAT, while larger businesses will be required to pay 7.5% or 10%,
depending on the scale of their operations. This is likely to make products sold via modern
retailers and chained retailers of all types more expensive and this will inevitably influence the
purchasing decisions of consumers. Although the government has announced its plans to
implement this law numerous times before, protests and objections from various parties have
led them to delay the implementation of the law, as well as infrastructure gaps and corruption
among government officials.
▪ Another factor that contributes to the higher prices charged in modern retail outlets is that the
cost of doing business is increasing for large companies in Bangladesh, especially in large
cities such as Dhaka and Chittagong. Commercial rents have increased significantly recently,
rising by some 20% over the course of the review period, while wages also increased by
around 12% between 2017 and 2019, spurred by the rising cost of living.
▪ The majority of Bangladeshis do most of their shopping locally, usually at the market that is
closest to their home. However, it is becoming increasingly common among urban consumers
to travel into the centre of the city to go shopping, with shopping centres among the main
attractions. Many shopping centres have additional amenities such as fitness centres,
cinemas, food halls and children's play areas, making them popular leisure as well as
shopping destinations. The development of out-of-town shopping centres remains at an
incipient stage, despite the presence of notable facilities such as the 150,000 sq m Jamuna
Future Park shopping centre, located in Dhaka’s affluent outer suburbs. The very high
population density in Dhaka and other major urban areas presents challenges to the
developers of large shopping centres and large standalone retail outlets, with most retail
outlets quite small as a result.
▪ Most of the country’s modern grocery retailers are open seven days per week and normal
daily opening hours are 09.00-22.00hrs. In some areas, it is common for retail outlets to open
one hour earlier and/or close one hour later than these standard opening hours.
▪ Traditional grocery retailers are also usually open seven days per week, although their
opening hours tend to be longer, from 06.00 until 23.00hrs. Non-grocery retailers are
generally open seven days per week from 10.00 until 21.00hrs, while retailers operating in
shopping centres are beholden to the opening hours of the shopping centre in which are
located.
▪ There is not any legislation pertaining to the opening and closing times for retail outlets in
Bangladesh. However, most formal non-grocery retailers located in Dhaka follow the policy of
Dhaka City Corporation. This dictates that they remain closed for one day each week, usually
a Tuesday, Wednesday or Thursday. Modern grocery retailers located in Dhaka are however
permitted to remain open every day.
▪ Ramadan is a particularly popular time for shopping. In addition, Eid, the Hindu festivals
Durga Puja and Pahela Baishak and the Bengali new year, which falls on 14 April, tend to see
spikes in retail purchases. An estimated 70% of sales of non-grocery products such as
apparel and footwear, beauty and personal care, consumer appliances, consumer electronics
and home décor are completed in the weeks immediately preceding these events, while an
increase of up to 30% is also seen in sales of grocery items. Most retailers offer special
discounts in the run up to Eid, Ramadan and Durga Puja in an effort to attract consumers.
▪ In addition, many non-grocery retailers in channels such as apparel and footwear specialist
retailers and jewellery and watch specialist retailers update their merchandise in preparation
for the increased interest in shopping during these festivals. The products sold by these
retailers as well as electronics and appliance specialist retailers and homewares and home
furnishing stores are among the most popular Eid gifts. Demand for such items is increasing
due to rising discretionary spending amidst an improving economic situation.
▪ Informal retailers also receive a boost to their sales during the abovementioned festival
shopping seasons, with increases generally seen in the numbers of informal roadside sellers
playing a trade at these times of year. The emerging channel of e-commerce is also
experiencing rapid increases in sales in the weeks preceding the abovementioned festivals
and this applies equally to consumer-to-consumer and social media-based informal online
sales as it does to formal e-commerce websites. Indeed, Facebook is emerging as a

particularly popular online channel for informal retailing, with many consumers paying cash on
delivery for their online orders.
▪ Manufacturers and formal retailers generally step up their promotions in the run-up to festival
seasons, with mass media advertising and online marketing campaigns becoming
increasingly popular. However, more traditional methods such as price discounting and the
offer of limited-edition products are more commonly used to attract customers.
▪ The forecast period is expected to see a strong performance for retailing in Bangladesh.
Stable economic development and growth is set to underpin an increase in demand across all
retail channels. In particular, the country’s sizeable middle-income group is likely to continue
expanding, with disposable income levels set to continue rising. Consumers are likely to
become increasingly aspirational and more interested in spending money on non-essential
items. This trend is set to be supported by urbanisation, the spread of modern retailing,
improvements in access to credit and the relative youth of the Bangladeshi population.
▪ Nevertheless, the fact that the majority of Bangladesh’s population are low-income people
that live in rural areas is set to place limits on the growth potential of the country’s retailing
industry. The high levels of population density in Bangladesh’s major cities is also set to
continue presenting challenges to retailers that prefer to operate from large-format premises.
However, more shopping centres are expected to open in suburban areas on the periphery of
Dhaka and other major urban areas.
▪ The majority of Bangladeshis are set to remain highly price-sensitive and this is set to
continue dictating their shopping preferences to a large degree. For instance, traditional
grocery retailers are set to remain massively popular and the channel is likely to continue
driving overall growth in retailing. Other key growth channels are likely to be apparel and
footwear specialist retailers and chemists/pharmacies, with increasingly affluent and
sophisticated consumers set to spend more on their health and appearance. Informal retailing
is however set to continue presenting significant competition to formal operators, principally
by undercutting them on price. Moreover, informal retailing is increasingly present online, with
Facebook set to become more important as an informal retailing channel.
▪ Demand for modern grocery retailers is set to experience slow but steady growth over the
forecast period. Modern retailing however is set to remain the preserve of affluent consumers,
with the low-income majority likely to continue relying on informal retailing and traditional
grocery retailers for all of their shopping needs. Modern grocery retailers is expanding at a
slower pace than modern retailing is in non-grocery channels such as apparel and footwear
specialist retailers and homewares and home furnishing stores. Modern grocery retailers
continues to struggle due to higher taxes, while many traditional grocery retailers pay no rent
or tax at all. This makes it easy for traditional grocery retailers to significantly undercut their
modern retailing rivals in terms of price. However, the increasing use of loyalty schemes and
the wider range of products on offer are set to become increasingly appealing to
Bangladesh’s urban middle-class.
Socioeconomic Trends
▪ Bangladesh is a country with a substantial population, which stood at 166 million at the end of
the review period. In addition, Bangladesh’s population is also young, with a median age of
just 27 in 2019. Although much of the population remains within the low-income group, the
country’s urban middle-class is expanding at a rapid pace. Bangladesh’s middle class,
especially young mid-income consumers, are the key consumer group for pushing growth in
modern retailing. Consumers within this group tend to be attracted to the clean and smart
interiors of modern retail outlets. In addition, they favour the high-quality service and the wide
range of products on offer. Furthermore, the prices of the goods on offer in modern retailers
have fixed prices, obviating the need to haggle, which is still very common in traditional and
informal retail settings. Many modern retailers also offer credit to their customers, while credit
card penetration is rising due to strong uptake of these consumer finance products among
mid- and high-income consumers. This is also boosting the spending power of young urban
professionals.
▪ A significant minority of the population of Bangladesh still live below the international poverty
line of USD3.10 per day. However, the prevalence of dire poverty is diminishing, especially in
major urban areas. The ongoing boom being experienced in the country's garment
manufacturing industry is a major reason for this. Many low-income people, particularly
women, work in garment manufacturing and more work and higher wages are supporting
increased retailing expenditure.
▪ Spending is also rising among more affluent consumers as economic confidence improves.
Shopping is increasingly viewed as a leisure pastime among the urban middle-class, many of
whom are becoming more interested in lifestyle purchases. Many consumers are also
interested in denoting their newfound affluence with aspirational purchases as conspicuous
consumption takes hold among the urban middle class. This marks a significant point of
difference from the majority of Bangladeshis whose shopping habits are restricted to
purchases of the absolute essentials of life. Increasingly, middle-class urban professionals
regard a trip to a shopping centre as a family day out. Most large-scale shopping centres in
Bangladesh also offer a wide range of leisure facilities.
▪ Young adults are a major driver of growth in retailing and the predominance of young adults
among the country’s overall population is a major reason for this. Young mid- to high-income
urban consumers are more likely to be attracted by major brands and they also generally
more likely to enjoy visiting shopping centres. These consumers are also more likely than
their older counterparts to own smartphones and to shop online, with informal sales via
Facebook remaining popular. It has been estimated that at least 90% of Bangladesh’s
Facebook users are aged below 35.
▪ Only 38% of the Bangladeshi population lived in cities at the end of the review period,
although this figure is rising quickly. Average incomes and purchasing power are much higher
in urban areas than in the country’s rural regions. Nevertheless, widespread poverty and the
price-sensitivity that result from this continue to place limits on the development potential of
formal retailing, with modern retailing facing strong barriers to growth on this basis. The prices
charged in modern retail outlets are very high by comparison with other channels in this is not
least due to the higher tax burden that outlets in these channels face. Moreover, modern
retailers face far higher overheads and development costs, a major issue in a country where
quick return on investment is on offer in various other areas of commerce. Higher prices mean
that modern retailing is confined mainly to the country’s largest cities Dhaka and Chittagong,
although modern retail outlets are also spreading to smaller cities such as Sylhet and
Rajshahi.
▪ E-commerce is developing rapidly in Bangladesh, although the consumer base for online
shopping resides almost entirely in the country’s major cities. However, demand is gradually
spreading to smaller cities and towns. Nevertheless, it should be noted that growth in informal
sales via social media platforms such as Facebook is outpacing growth in formal e-
commerce.
▪ Further expansion of Bangladesh’s middle-class over the forecast period, with economic
development, urbanisation and overall population growth set to be the main factors
underpinning this. The share of total population living in urban areas is expected to rise to
41% by 2024, with the median age of the population rising to 29. However, the total number of
young adults is set to increase. The young, affluent urban consumer base that pushed growth
and development in the country’s retailing industry during the review period is set to continue
doing so over the forecast period, increasingly favouring modern retailers and the high-quality
products and well-known brands that are sold in these outlets. These consumers are also
likely to become increasingly interested in e-commerce, with informal selling via social media
likely to be at the forefront of this. Nevertheless, Bangladesh’s population is set to continue
comprising predominantly low-income people and rural-dwellers, the majority of whom have
very limited spending budgets, with many remaining generally unaware of modern retailing.
▪ Recent years have seen Bangladesh register strong economic growth and this is set to
continue into the forecast period. 7.9% real GDP growth was recorded in 2019, with the
unemployment rate remaining low at just 5% and inflation under control at below 6%
throughout the year. This in turn is likely to support growth in private consumption, despite the
sharp declines seen in formal remittances towards the end of the review period. Remittances
remain a key source of income for many households in the country. It is common for families
to have at least one member working abroad and sending money home on a regular basis.
However, while official figures for remittances are in decline, this may be due to the rising use
of hundis or informal remittance systems. These are often unregistered money transfer apps
that enable users to transfer money at lower cost.
▪ Real annual GDP growth of around 7% over the forecast period is expected to be due to
improvements in foreign direct investment. However, rising temperatures are a worry for
many, while the threat of natural disasters, inflation spikes and increasing income disparity
could erode household spending, particularly among low-income groups in rural areas.
Consumer spending power could also be hampered by recent VAT reforms. The long-delayed
changes to the country’s VAT regime are likely to result in sharp price increases for many
products while also generating stronger cost pressures for manufacturers and suppliers.
Moreover, high commercial rents are likely to remain a major cost burden for retailers. Rents
on retail space in Dhaka and Chittagong increased by 12% between 2017 and 2019, with
further rent increases set to negatively impact the cost structures of retailers during the
forecast period.
▪ Positive influences on retail spending and the development of modern retailing are expected
to be the increasingly busy lifestyles of urban consumers, improvements in the quality of life,
sustainable economic growth, the increasing impact of Western culture and the ongoing
modernisation of Bangladesh’s retailing infrastructure. Longer working hours and the
emergence of a large group of people with more than one job and the shift away from the
traditional way of life towards more modern lifestyles are set to be the most influential wider
background trends. Furthermore, government campaigns to improve electrification in rural
areas, which have already resulted in 87% of rural households having a constant electricity
supply, are set to continue during the forecast period, while mobile and fixed-line internet is
been extended to much of the country’s population. In particular, the significant spikes seen
recently in sales of LED TVs, air conditioning units and home furniture and furnishings and the
steady growth seen in demand for modern grocery retailing are a strong indicator of the
positive effects of rising purchasing power and lifestyle changes among both the urban and
rural populations.
Logistics/infrastructure
▪ Although the road infrastructure in Bangladesh is improving, roads remain poor in many
areas. In particular, the roads in rural regions are often inadequate. Indeed, the majority of the
country’s roads remain below international standards, with poor maintenance linked to high
construction costs. Natural disasters such as floods and earthquakes present a significant
threat to transportation infrastructure, while increasingly overcrowded cities and high traffic
congestion hamper the distribution of products in urban areas. Furthermore, the poor state of
the country’s transportation infrastructure means that many consumers shop locally whenever
possible.
▪ Poor transportation infrastructure presents major challenges to the expansion of modern
retailers beyond the country's largest cities. Among the major factors that cause concern for
distributors when moving goods around the country are narrow roads, poor maintenance and
roadblocks and informal road tolls. During the annual rainy season, many roads are flooded
and become impassable. In many rural areas meanwhile, roads are generally unsuitable for
large vehicles and small carts are often the only way to distribute goods safely.
▪ Bangladesh’s main cities are increasingly overcrowded due to many years of uncontrolled and
unregulated urbanisation. Such rapid and chaotic change has resulted in extremely high
population density in Dhaka, Chittagong and other major cities and this has made it very
difficult to obtain large sites to develop large-format retailing infrastructure. As a result, there
are very few shopping centres in major urban centres. Thus, shopping centres are becoming
more popular as leisure destinations for mid- to high-income urban consumers, with the low-
income majority continuing to regard shopping centres as unaffordable and inaccessible. Very
high deposits and rents mean that only higher-priced stores are generally able to operate in
shopping centres.
▪ Shopping centres in Bangladesh are generally indoor buildings with enclosed stores, while
informal retailers generally operate outdoors. Most modern retailers seek shopping centre
locations as it is otherwise difficult to obtain prime retail space of a sufficient size for stand-
alone units. Shopping centres often group similar stores together, with Bashundhara City Mall
for instance having allocated its second and third floors mainly to apparel and footwear
specialist retailers.
▪ The first Bangladesh International Franchise and Retail Expo was held on 24 February 2018
at the Westin Dhaka, organised by Fanglobal. This presented international and national
retailers with opportunities to work together and to explore new products and services. This is
a clear sign that chained retailing is likely to expand significantly in Bangladesh at some point
during the forecast period.
▪ Cash remains by far the most popular payment method in Bangladesh. Modern retailers
generally accept card and cash payments, with merchant acceptance soaring during the
review period, while traditional grocery retailers only accept cash. Cheques are accepted by
very few retailers due to concerns over counterfeiting. Most consumers are more accustomed
to using cash to pay for their purchases, while financial card penetration remains low.
Concerns over security mean that only a tiny minority of those with financial cards use them to
make payment in stores or online. Furthermore, there are additional fees and charges for card
payments in many retail outlets. Cash on delivery also remains the preferred payment method
for online purchases, although this payment method is not accepted by all e-commerce sites.
▪ Mobile payments emerged strongly in Bangladesh towards the end of the review period. This
is linked to the rising penetration of smartphones. bKash is the most popular mobile payment
app and it is viewed as more reliable and more secure than making payment via a financial
card. A growing number of store-based retailers and internet retailing players now accept
bKash and the mobile wallet was promoted heavily towards the end of the review period, with
the issuer notably offering a 10% in-store discount for those paying via the bKash app.
International payment platform PayPal was also launched in Bangladesh during the review
period, although it is far from certain that PayPal will be able to present a credible challenge to
bKash as PayPal requires its users to hold a financial card.
▪ Bangladesh’s banks have been requested by the country’s central bank to promote an open,
interoperable and inclusive payment ecosystem in the country. Additionally, as part of the
country’s new e-commerce policy, announced in 2018, promoting new payment tools such as
pre-paid cards have become part of the country’s official policy.
▪ Retailers in Bangladesh are increasingly using technology to attract consumers, although only
a few leading retailers including grocery retailer Meena Bazar have their own e-commerce
sites. Many manufacturers, distributors and retailers instead prefer to list their products on
online marketplaces such as Ajker Deal and Daraz. Selling via social media platforms such as
Facebook is also becoming increasingly popular among smaller informal retailers, the majority
of whom accept cash-on-delivery as their preferred payment method. It is not uncommon for
e-commerce sites to accept cash on delivery as well and this is a reflection of the status of
cash on delivery as the primary payment method for distance selling in Bangladesh.
Furthermore, there is an increasing focus on loyalty schemes among the country’s retailers
and these have become particularly popular among the leading chained grocery retailers. In
addition, larger retailers are beginning to track customer spending in an effort to develop more
targeted offers and to achieve improvements in their stock keeping, pricing and marketing.
However, the majority of the countries retailers maintain little interest in investing in
technological advances, with few even having gone as far as installing POS terminals.
▪ Fixed prices are becoming more common in retail outlets throughout the country as the
government seeks to clamp down on the process of over-charging by retailers, in the
assumption that customers will inevitably want to haggle prices down. Mobile courts operated
by the Government have taken the initiative to implement fixed prices in most of the
permanent markets that are a common feature of Bangladesh’s cities. These initiatives focus
mainly on non-grocery such as consumer electronics, cosmetics and apparel and footwear.
▪ Facebook is also increasingly used as a marketing platform for retailers operating in
Bangladesh, a reflection of the increasing popularity of Facebook among local consumers.
However, slow internet speeds due to poor connectivity can result in many people logging on
infrequently, if at all. This can make social media marketing considerably less effective than
many retailers would like to believe, especially when marketing materials include video
content.
▪ VAT is now applied to e-commerce under new tax laws that came into effect during 2019.
This is likely to erode the major strategic advantage of e-commerce, which is lower prices
than what is charged by store-based retailers. This is likely to have a negative impact on the
development of e-commerce during the forecast period. The use of messenger apps as a
form of marketing is also increasing and this is proved an increasingly successful way of
reaching consumers towards the end of the review period.
▪ One of the main drags on growth in e-commerce is the limited range of shipping options on
offer. The state post office is known to be unreliable, particularly outside of the Dhaka region.
For this reason, private courier services are used as delivery contractors by many retailers,
including SA Paribahan or Sundarban Courier Service. These services are generally reliable
and are widely trusted despite being widely regarded as expensive. However, even private
couriers often require customers to collect online purchases from regional depots rather than
offering home delivery, especially outside of the Dhaka region.
▪ Smartphone penetration is expected to surge during the forecast period, in line with the trends
seen during the review period. This is likely to be a positive influence on growth in e-
commerce. After launching its 4G mobile network in February 2018, Bangladesh is expected
to have its 5G network in place by 2021. This is set to make internet browsing faster and more
reliable for many millions of consumers. Cash can be expected to remain the default payment
method throughout forecast period, while payment apps are also likely to see a strong
increase in usage. With the numbers of merchants accepting credit and debit cards set to rise,
the numbers of financial cards in circulation are also likely to increase, although ownership of
these cards will remain limited largely to mid- and high-income urban consumers. Finally, if
PayPal is able to prove that it represents a secure and reliable option, it is likely to presage
changes in payment methods. However, the impact of PayPal is likely to extend initially only
to Bangladesh’s largest cities and younger consumers.
Informal Retailing
▪ Informal retailing remains ubiquitous in Bangladesh and it has been estimated that some 50%
of grocery retailers in major cities are unregistered, a figure that rises to around 80% in
smaller cities and rural areas. Throughout the country, the image of retailing is intrinsically tied
to individual entrepreneurs and family businesses and there is widespread participation in,
and acceptance of, informal retailing. Even high-income consumers are more than happy to
engage with informal retailing. The popularity of informal retailing is linked to its widespread
presence and lower prices, with informal retailers able to minimise overheads such as
marketing costs and rents while also evading taxes.
▪ Counterfeit products and illegal imports maintain a significant presence in informal retailing,
particularly when it comes to fresh fruit and vegetables, apparel and footwear, mobile phones,
tobacco, alcoholic drinks, consumer electronics and beauty and personal care. In this way,
informal retailing damages the ability of the government to generate revenues . Nevertheless,
the government has so far done little to clamp down on informal retailers. The main reason is
that there is a threat of rioting and civil unrest in the event that low-income consumers were
unable to continue shopping via informal channels, as they have done for generations.
Instead, the government has focused its control efforts on targeting mass distributors.
Facilities storing illicit goods have been raided, while illegal imports have been seized at ports
and land border entry points. In addition, the fact that many informal retailers operate from
mobile premises means that they can be very difficult to keep tabs on effectively, contributing
to the difficulties that the authorities face in controlling informal retailing.
▪ It has been estimated that there are more than 2.60 lakh street hawkers operating in Dakar
alone, each generating more than BDT1,825 per day in revenues. However, according to the
Hawker Federation, which represents the interests of these informal business operators, the
actual number of informal traders on the streets of Bangladesh’s capital is closer to 10 lakh.
Around 3 lakh people are directly or indirectly involved with informal retailing throughout the
rest of the country. However, the City Corporation of Dhaka has decided to evict many
informal retailers from their roadside pitches. However, these efforts have also been
accompanied by efforts to rehabilitate informal retailers and convert their operations into
formal retailing. Special ID cards and trading licenses are now being provided to hawkers in
an effort to organise and register them and minimise the negative effect that they have on the
country’s formal retailing industry. The new system of informal retailing licenses in Dhaka is
being conducted via a digital system, rather than processing them manually, as was done
previously.
Chart 1 Retailing: Non-Grocery Specialist (a)
Source: Euromonitor International
Chart 2 Retailing: Non-Grocery Specialist (b)
MARKET DATA
Table 1 Sales in Retailing by Store-based vs Non-Store: Value 2014-2019
BDT bn
2014 2015 2016 2017 2018 2019
Store-based Retailing 1,948.8 2,087.1 2,301.7 2,577.5 2,865.6 3,185.7

Non-Store Retailing 8.2 10.0 12.7 17.1 25.1 35.2
Retailing 1,957.0 2,097.1 2,314.4 2,594.6 2,890.7 3,220.9
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
Table 2 Sales in Retailing by Store-based vs Non-Store: % Value Growth 2014-2019
% current value growth, retail value rsp excl sales tax
2018/19 2014-19 CAGR 2014/19 Total
Store-based Retailing 11.2 10.3 63.5

Non-Store Retailing 40.3 33.7 327.7
Retailing 11.4 10.5 64.6
Table 3 Sales in Store-Based Retailing by Channel: Value 2014-2019
BDT bn
2014 2015 2016 2017 2018 2019
Grocery Retailers 1,552.8 1,658.6 1,825.3 2,056.0 2,294.2 2,556.4

Non-Grocery Specialists 370.7 400.3 444.7 486.4 532.4 585.6
Mixed Retailers 25.3 28.2 31.8 35.2 39.1 43.7
Note 1: Luxury retailing not included in store-based retailing total to avoid double counting as luxury retailing is a
duplicate category already accounted for within non-grocery specialists and mixed retailers.
Note 2: Off-price retailing not included in store-based retailing total to avoid double counting as off-price retailing
is a duplicate category already accounted for within apparel and footwear specialists and department
stores.
Table 4 Sales in Store-Based Retailing by Channel: % Value Growth 2014-2019
2018/19 2014-19 CAGR 2014/19 Total
Grocery Retailers 11.4 10.5 64.6

Non-Grocery Specialists 10.0 9.6 58.0
Mixed Retailers 11.7 11.6 72.7
stores.
Table 5 Store-Based Retailing Outlets by Channel: Units 2014-2019
outlet
2014 2015 2016 2017 2018 2019

Non-Grocery Specialists 60,691.0 63,954.0 68,326.0 72,922.0 77,657.0 82,594.0
Mixed Retailers 72.0 83.0 95.0 107.0 119.0 131.0

stores.
Table 6 Store-Based Retailing Outlets by Channel: % Unit Growth 2014-2019
% unit growth
2018/19 2014-19 CAGR 2014/19 Total

stores.
Table 7 Sales in Non-Store Retailing by Channel: Value 2014-2019
BDT million
2014 2015 2016 2017 2018 2019
Direct Selling 5,224.0 5,814.2 6,653.4 7,488.3 8,274.6 9,131.2

Homeshopping - - - - - -
Vending - - - - - -
E-Commerce 3,000.0 4,200.0 6,000.0 9,600.0 16,800.0 26,040.0
Non-Store Retailing 8,224.0 10,014.2 12,653.4 17,088.3 25,074.6 35,171.2
Note 1: Vending data captures vending systems installed in public and semi-captive environments only. For
further details refer to definitions.
Note 2: Mobile e-commerce not included in non-store retailing total to avoid double counting as this categoriy is
already accounted for within e-commerce.
Table 8 Sales in Non-Store Retailing by Channel: % Value Growth 2014-2019
2018/19 2014-19 CAGR 2014/19 Total
Direct Selling 10.4 11.8 74.8

Homeshopping - - -
Vending - - -
E-Commerce 55.0 54.1 768.0
Table 9 Retailing GBO Company Shares: % Value 2015-2019
% retail value rsp excl sales tax

Company 2015 2016 2017 2018 2019
ACI Ltd 0.2 0.2 0.2 0.2 0.2

Others 99.8 99.8 99.8 99.8 99.8
Total 100.0 100.0 100.0 100.0 100.0
Table 10 Retailing GBN Brand Shares: % Value 2016-2019

Brand Company (GBO) 2016 2017 2018 2019
Shwapno ACI Ltd 0.2 0.2 0.2 0.2

Others 99.8 99.8 99.8 99.8
Total 100.0 100.0 100.0 100.0
Table 11 Store-based Retailing GBO Company Shares: % Value 2015-2019

Company 2015 2016 2017 2018 2019
ACI Ltd 0.2 0.2 0.2 0.2 0.2

Others 99.8 99.8 99.8 99.8 99.8
Total 100.0 100.0 100.0 100.0 100.0
Table 12 Store-based Retailing GBN Brand Shares: % Value 2016-2019

Shwapno ACI Ltd 0.2 0.2 0.2 0.2

Others 99.8 99.8 99.8 99.8
Total 100.0 100.0 100.0 100.0
Table 13 Store-based Retailing LBN Brand Shares: Outlets 2016-2019
sites/outlets
Brand (GBO) Company (NBO) 2016 2017 2018 2019
Shwapno ACI Ltd 55 60 63 65

Others Others 770,443 778,472 786,616 794,907
Total Total 770,498 778,532 786,679 794,972
Table 14 Non-Store Retailing GBO Company Shares: % Value 2015-2019

Company 2015 2016 2017 2018 2019
Amway Corp 3.1 2.9 2.5 2.1 1.8

Herbalife Nutrition Ltd - - - 1.6 1.4
Herbalife Ltd 2.3 2.2 1.9 - -
Others 94.6 94.9 95.6 96.3 96.9
Total 100.0 100.0 100.0 100.0 100.0
Note: Vending data captures vending systems installed in public and semi-captive environments only. For
Table 15 Non-Store Retailing GBN Brand Shares: % Value 2016-2019

Amway Amway Corp 2.9 2.5 2.1 1.8

Herbalife Nutrition Herbalife Nutrition Ltd - - 1.6 1.4
Herbalife Nutrition Herbalife Ltd 2.2 1.9 - -
Others 94.9 95.6 96.3 96.9
Total 100.0 100.0 100.0 100.0
Note: Vending data captures vending systems installed in public and semi-captive environments only. For
Table 16 Forecast Sales in Retailing by Store-based vs Non-Store: Value 2019-2024
BDT bn
2019 2020 2021 2022 2023 2024

Non-Store Retailing 35.2 43.3 49.7 55.6 61.4 66.8
Retailing 3,220.9 3,373.8 3,526.4 3,679.5 3,832.9 3,986.1
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Note: Forecast value data in constant terms.
Table 17 Forecast Sales in Retailing by Store-based vs Non-Store: % Value Growth

2019-2024
% constant value growth, retail value rsp excl sales tax
2019/2020 2019-24 CAGR 2019/24 Total

Retailing 4.7 4.4 23.8
trade sources
Table 18 Forecast Sales in Store-Based Retailing by Channel: Value 2019-2024
BDT bn
2019 2020 2021 2022 2023 2024

Non-Grocery Specialists 585.6 607.5 630.4 654.4 679.3 705.3
Mixed Retailers 43.7 45.9 48.3 50.7 53.2 55.7
trade sources
Note 1: Forecast value data in constant terms.
stores.
Note 4: No forecast data available for luxury and off-price retailing.
Table 19 Forecast Sales in Store-Based Retailing by Channel: % Value Growth 2019-

2024
2019/2020 2019-24 CAGR 2019/24 Total

trade sources
stores.
Table 20 Forecast Store-Based Retailing Outlets by Channel: Units 2019-2024
outlet
2019 2020 2021 2022 2023 2024

Mixed Retailers 131.0 143.0 154.0 165.0 175.0 184.0
trade sources
stores.
Table 21 Forecast Store-Based Retailing Outlets by Channel: % Unit Growth 2019-2024
% unit growth
2019/20 2019-24 CAGR 2019/24 Total

trade sources
stores.
Table 22 Forecast Sales in Non-Store Retailing by Channel: Value 2019-2024
BDT million
2019 2020 2021 2022 2023 2024
Direct Selling 9,131.2 9,469.0 9,791.0 10,104.3 10,407.4 10,709.2

Homeshopping - - - - - -
Vending - - - - - -
E-Commerce 26,040.0 33,852.0 39,945.4 45,537.7 51,002.2 56,102.5
Non-Store Retailing 35,171.2 43,321.0 49,736.3 55,642.0 61,409.6 66,811.7
trade sources
Table 23 Forecast Sales in Non-Store Retailing by Channel: % Value Growth 2019-2024
2019/2020 2019-24 CAGR 2019/24 Total

Homeshopping - - -
Vending - - -
E-Commerce 30.0 16.6 115.4
trade sources
MODERN GROCERY RETAILERS
Prospects
▪ Modern grocery retailers in Bangladesh continues to register strong growth, although sales
are still rising from a low base. Supermarkets and convenience stores are the most prominent
categories and the numbers of these outlets are increasing. Demand for modern grocery
retailers is benefiting from rising incomes, the result of strong economic growth and the
expansion of the urban middle class. Affluent urban consumers are attracted to supermarkets
and convenience stores by the convenience that their longer opening hours represent as well
as the pleasant and hygienic shopping environments in comparison with traditional markets.
Indeed, affluent consumers are increasingly shunning traditional markets due to concerns
over disorganised product displays, poor hygiene and cramped and crowded shopping
experiences that these outlets represent.
▪ Another factor that has made modern grocery retailers popular is that prices are fixed, which
means no haggling. Haggling over prices remains one of the defining characteristics of
informal retailing in Bangladesh, with open markets in particular generally inconsistent when it
comes to pricing.
▪ Changing consumer attitudes and behaviours provide a positive background context for the
development of e-commerce in the country. In particular, advances in technology, rising
health awareness and the development of an increasingly sophisticated base of affluent urban
consumers means that new business models are emerging as consumerism becomes a more
noticeable element in Bangladeshi society. The country’s retailers have formed a congress to
discuss their industry and to identify key elements of success while confronting emerging
challenges. Among key issues discussed in recent events are the emergence of e-commerce,
the need for secure online payment systems to facilitate e-commerce and the importance of
focusing on the customer experience.
▪ Much of the appeal of convenience stores lies in their image as conveniently located outlets
that offer high-quality products from early in the morning until late in the evening. The busy
lifestyles being led by urban consumers are encouraging more people to shop in these stores,
often on their way home from work in the evening. The popularity of supermarkets meanwhile
tends to be based on the extensive range of products on offer. Time-pressed urban
professionals are increasingly favouring major weekly shopping trips to a supermarket, with
daily top-up shopping trips undertaken in convenience stores. Modern grocery retailers are
also increasingly expanding beyond large cities into smaller cities and towns, with the
Shwapno and Meena Bazar chains leading the charge.
▪ Women comprise an important consumer base for modern grocery retailers. Women often
feel more comfortable visiting these types of outlets, while female consumers are also more
likely to take advantage of the internet retailing and home delivery services offered by leading
players such as MeenaClick and Shwapno.
▪ Despite the increasing appeal of modern grocery retailers, higher prices remain a major
barrier to growth. In particular, the leading supermarket chains charge prices that are
considerably higher than open markets and neighbourhood grocery stores for instance, and
this discourages many from shopping in modern outlets.
▪ One of the main reasons for the high prices charged in supermarkets is that products sold via
this channel attract a higher rate of VAT. The Bangladesh Supermarket Owners Association
(BSOA) has been lobbying for the government to introduce uniform VAT for grocery retailers,
although recent reforms failed to close the VAT gap between traditional and modern retail
channels.
▪ Another major limitation on the development of modern grocery retailers is that 62% of
Bangladesh’s population live in rural areas of the country, where the development of modern
grocery retailers remains at an incipient stage due to the focus of the channel’s leading
players on the country’s major cities.
▪ Large-format formats such as supermarkets are favoured by leading modern grocery retailers
such as Infinity and Shwapno. These outlets tend to be able to attract huge volumes of
shoppers. However, it can also be difficult to find suitable retail space to operate larger-format
stores. Rapid urbanisation has resulted in Bangladesh’s major cities being very crowded and
this can make it difficult to find sites large enough to house a supermarket. Moreover, with
demand for supermarkets and was non-existent outside of the country’s major urban areas
due to the preponderance of low-income people in these parts of the country. Furthermore,
the poor state of the roads outside of major urban areas means that distribution can be
challenging.
▪ Convenience stores is a dynamic channel and the numbers of such outlets are expanding
rapidly in larger cities. Population growth, rising income levels and urbanisation are all spurs
on growth in the channel. However, it should be noted that the majority of convenience stores
in Bangladesh are independently owned and operated. The most common products sold via
convenience stores are fresh food, packaged food and non-alcoholic drinks.
▪ The forecast period is expected to see strong growth for modern grocery retailers. The
channel is still developing from a low base, with growth rates correspondingly high. The main
spurs on growth are set to be the category’s positive performance are set to be ablation
growth, urbanisation and rising income levels, with the expansion of the urban middle-class
set to ensure a wider and more substantial consumer base for convenience stores and
supermarkets. Furthermore, with affluent urban consumers becoming more sophisticated,
they are likely to pay more attention to factors such as convenience, a pleasant shopping
experience and a wide range of high-quality products, rather than basing their purchasing
decisions almost entirely on price and the proximity of retail outlets to their homes.
▪ Nevertheless, the presence of modern grocery retailers is set to remain limited to
Bangladesh’s main cities and little expansion is expected outside of major urban areas before
the end of the forecast period. Furthermore, the upmarket image and reputation for high
prices that the country’s leading supermarkets have is likely to continue placing limits on
consumer demand. For these reasons, most Bangladeshis are likely to continue preferring
traditional and informal retail channels, with modern grocery retailers set to continue
accounting for a very small proportion of total value sales in retailing at the end of the forecast
period. The relatively slow returns on investment on offer in the channel means that it can be
difficult to obtain financing, while high interest rates on commercial loans are set to continue
suppressing investment in the channel.
Competitive Landscape
▪ The competitive environment in modern grocery retailers remains highly fragmented, with
“others” accounting for the vast majority of sales and outlets in the channel in 2019. ACI Ltd is
the leading player via its Shwapno chain, which comprised 65 outlets at the end of the review
period. The Shwapno chain continues to benefit from the expansion of its outlet network,
which comprised just 45 outlets at the start of the review period. Shwapno’s popularity is
based on its aggressive pricing strategy as well assets commitment to selling mainly locally
sourced fresh produce. Indeed, Shwapno benefits from its value-for-money positioning, which
sets it apart from rivals such as Agora and Meena Bazar, which mainly target mid- to high-
income consumers.
▪ Furthermore, the Shwapno chain has a flexible approach to outlet size and format and there
are numerous types of Shwapno stores of various sizes, including large supermarkets located
in shopping centres and small convenience stores. The chain’s expansion currently focuses
on franchised convenience stores under the Shwapno Express banner, the vast majority of
which are located in Dhaka or Chittagong. The chain’s aggressive expansion via franchising
and under the convenience stores model is likely to continue influencing rival chains, with the
advantages of convenience stores and franchising in terms of keeping overheads to a
minimum becoming increasingly apparent.
▪ March 2019 saw the opening of a massive Unimart Super Shop hypermarket by Union Group.
This new outlet, located in Dhanmondi, a neighbourhood of Dhaka, has some 2,800 sq m of
retailing space. The company currently has plans to open another massive hypermarket at
Uttara in Dhaka. Unimart has so far found success via hypermarkets located in Dhaka and
this is expected to pave the way for the further development of the channel in Bangladesh’s
bustling capital.
▪ Rahimafrooz Superstores Ltd recently closed down the Shanti Nagar branch of its Agora
chain of supermarkets. However, the company’s CEO also recently announced a USD10
million investment programme for the forecast period. He has also committed to the opening
of six new Agora outlets in the key cities of Dhaka, Chittagong and Sylhet before the end of
2020.
▪ One particularly noteworthy recent entrant is Daily Shopping by PRAN Group, which launched
a chain of convenience stores in 2017. PRAN Group is a large Bangladeshi business
conglomerate and it is expected that the Daily Shopping chain will increasingly present strong
competition to the incumbent leaders in modern grocery retailers.
▪ All of Bangladesh’s leading modern grocery retailers chains focus on offering global brands
and premium products, while Agora also offers a customer loyalty programme. E-commerce is
present in modern grocery retailers, although it remains at an incipient stage development,
with Shwapno and Meena Bazar among the few store-based retailing players in the country to
have their own e-commerce sites.
Chart 3 Modern Grocery Retailers: Modern Grocery Retailer (a)
Chart 4 Modern Grocery Retailers: Modern Grocery Retailer (b)
Channel Data
Table 24 Modern Grocery Retailers: Value Sales, Outlets and Selling Space 2014-2019
2014 2015 2016 2017 2018 2019
Value sales BDT million 25,899.5 28,541.0 32,233.3 35,878.4 40,198.4 45,167.2
Outlets 453.0 469.0 485.0 501.0 517.0 532.0
Selling Space '000 sq m 169.8 184.8 200.2 216.4 233.4 249.8
Table 25 Modern Grocery Retailers: Value Sales, Outlets and Selling Space: % Growth
2014-2019
% growth
2018/19 2014-19 CAGR 2014/19 Total
Value sales BDT million 12.4 11.8 74.4

Outlets 2.9 3.3 17.4
Selling Space '000 sq m 7.0 8.0 47.1
Table 26 Sales in Modern Grocery Retailers by Channel: Value 2014-2019
BDT million
2014 2015 2016 2017 2018 2019
Convenience Stores 5,179.9 5,708.2 6,446.7 7,252.5 8,137.3 9,162.6

Discounters - - - - - -
Forecourt Retailers - - - - - -
Hypermarkets - - - - - -
Supermarkets 20,719.6 22,832.8 25,786.7 28,626.0 32,061.1 36,004.6
Modern Grocery Retailers 25,899.5 28,541.0 32,233.3 35,878.4 40,198.4 45,167.2
Table 27 Sales in Modern Grocery Retailers by Channel: % Value Growth 2014-2019
2018/19 2014-19 CAGR 2014/19 Total
Convenience Stores 12.6 12.1 76.9

Discounters - - -
Forecourt Retailers - - -
Hypermarkets - - -
Supermarkets 12.3 11.7 73.8
Modern Grocery Retailers 12.4 11.8 74.4
Table 28 Modern Grocery Retailers Outlets by Channel: Units 2014-2019
outlet
2014 2015 2016 2017 2018 2019
Convenience Stores 302.0 313.0 323.0 334.0 345.0 355.0

Supermarkets 151.0 156.0 162.0 167.0 172.0 177.0
Modern Grocery Retailers 453.0 469.0 485.0 501.0 517.0 532.0
Table 29 Modern Grocery Retailers Outlets by Channel: % Unit Growth 2014-2019
% unit growth
2018/19 2014-19 CAGR 2014/19 Total

Discounters - - -
Hypermarkets - - -
Table 30 Modern Grocery Retailers GBO Company Shares: % Value 2015-2019

Company 2015 2016 2017 2018 2019
ACI Ltd 12.1 13.0 13.8 14.7 16.0

Gemcon Group 4.2 4.1 4.1 4.4 4.6
Rahimafrooz Bangladesh 3.3 3.4 3.3 3.7 3.7
Ltd
Others 80.5 79.5 78.8 77.1 75.6
Total 100.0 100.0 100.0 100.0 100.0
Table 31 Modern Grocery Retailers GBN Brand Shares: % Value 2016-2019

Shwapno ACI Ltd 13.0 13.8 14.7 16.0

Meena Bazar Gemcon Group 4.1 4.1 4.4 4.6
Agora Rahimafrooz Bangladesh Ltd 3.4 3.3 3.7 3.7
Others 79.5 78.8 77.1 75.6
Total 100.0 100.0 100.0 100.0
Table 32 Modern Grocery Retailers LBN Brand Shares: Outlets 2016-2019
sites/outlets
Shwapno ACI Ltd 55 60 63 65

Meena Bazar Gemcon Group 19 20 20 22
Agora (Rahimafrooz Rahimafrooz Superstores 15 15 16 17
Bangladesh Ltd) Ltd
Others Others 396 406 418 428
Total Total 485 501 517 532
Table 33 Modern Grocery Retailers LBN Brand Shares: Selling Space 2016-2019
selling space '000 sq m

Shwapno ACI Ltd 23.5 25.9 29.8 32.8

Meena Bazar Gemcon Group 8.9 9.5 9.5 10.6
Agora (Rahimafrooz Rahimafrooz Superstores 6.8 6.8 7.2 7.9
Bangladesh Ltd) Ltd
Others Others 160.9 174.2 186.9 198.4
Total Total 200.2 216.4 233.4 249.8
Table 34 Modern Grocery Retailers Forecasts: Value Sales, Outlets and Selling Space
2019-2024
2019 2020 2021 2022 2023 2024
Outlets 532.0 547.0 562.0 577.0 592.0 607.0
trade sources
Table 35 Modern Grocery Retailers Forecasts: Value Sales, Outlets and Selling Space: %
Growth 2019-2024
% growth
2019/20 2019-24 CAGR 2019/24 Total

Outlets 2.8 2.7 14.1
trade sources
Table 36 Forecast Sales in Modern Grocery Retailers by Channel: Value 2019-2024
BDT million
2019 2020 2021 2022 2023 2024
Convenience Stores 9,162.6 9,694.0 10,236.9 10,789.7 11,350.7 11,918.3

Supermarkets 36,004.6 38,020.8 40,112.0 42,278.0 44,518.8 46,833.8
Modern Grocery Retailers 45,167.2 47,714.9 50,348.9 53,067.7 55,869.5 58,752.0
trade sources
Table 37 Forecast Sales in Modern Grocery Retailers by Channel: % Value Growth 2019-
2024
2019/2020 2019-24 CAGR 2019/24 Total

Discounters - - -
Hypermarkets - - -
trade sources
Table 38 Forecast Modern Grocery Retailers Outlets by Channel: Units 2019-2024
outlet
2019 2020 2021 2022 2023 2024
Convenience Stores 355.0 365.0 375.0 385.0 395.0 405.0

Supermarkets 177.0 182.0 187.0 192.0 197.0 202.0
Modern Grocery Retailers 532.0 547.0 562.0 577.0 592.0 607.0
trade sources
Table 39 Forecast Modern Grocery Retailers Outlets by Channel: % Unit Growth 2019-
2024
% unit growth
2019/20 2019-24 CAGR 2019/24 Total

Discounters - - -
Hypermarkets - - -
trade sources
TRADITIONAL GROCERY RETAILERS
Prospects
▪ Traditional grocery retailers remains the dominant channel in retailing in Bangladesh.
Traditional grocery stores and open markets remain far more popular than supermarkets and
convenience stores and 2019 saw traditional grocery retailers account for 98% of overall
value sales in grocery retailers. The appeal of traditional grocery retailers lies in the lower
prices that these outlets charge for a wide variety of products, the result of the lower level of
VAT applied to products sold in traditional retailers in comparison with those sold in modern
grocery retailers. Furthermore, the ubiquity of traditional grocery retailers is another main
reason for channels predominance. At the end of the review period there were almost
712,000 traditional grocery retailers outlets operating throughout the country, including in rural
areas. Far more consumers thus have access to traditional grocery retailers, which are also
far more affordable than modern retailers.
▪ Traditional grocery retailers appeal to consumers of all income levels, including affluent mid-
and high-income people. Bangladeshi people usually prefer to shop in their local open market
or traditional grocery store, irrespective of their socioeconomic status. The main reason for
this is the convenience that these outlets represent due to their being located enclosed
committee to the homes of consumers. With roads and other transportation infrastructure
remaining inadequate and with traffic congestion high in urban areas, proximity to one’s home
remains critical when choosing a retail outlet. Furthermore, in many rural villages and
suburban towns, the local traditional retail outlet is often the only grocery store for miles
around.
▪ Many local grocery stores are considered to be important parts of the local community. In
particular, many traditional retailers offer their regular customers informal credit, creating
strong personal bonds between retailers and their customers. Furthermore, customers are
generally encouraged to haggle, meaning that regular customers are able to negotiate lower
prices. In addition, many consumers harbour doubts about the freshness of the fruit,
vegetables, meat and fish offered by supermarkets, while they are prepared to place their
trust in the fresh food offered by traditional grocery retailers.
▪ Traditional grocery retailers are often located in roadside locations. Very high population
density and overcrowding mean that these types of outlets tend to be small, including tiny
kiosks as small as 1.9 sq m. Even larger outlets rarely exceed 9.0 sq m in area. Most of these
outlets offer only a limited range of the most popular products, normally under economy
brands. They also usually offer various products in unpackaged format, including rice, edible
oils and herbs and spices. Many traditional retailers also offer essential products in small
sachets, with the very low retail selling prices of these products catering to low-income
consumers. Alternatively, traditional retailers often engage in bulk breaking, open impacts to
sell essential items by the individual unit.
▪ Among the most prevalent and important types of traditional grocery retailers are the open
markets owned and operated by municipal corporations that are a common feature of the
urban and suburban landscape in all of Bangladesh is major urban areas. These markets
feature numerous specialist retailers arranged according to the products they offer, including
fish and seafood, meat and poultry, fruit and vegetables and packaged food.
▪ Larger traditional grocery stores can generally be found in more affluent neighbourhoods of
large cities. These outlets target mid- to high-income consumers and offer higher-quality local
and global brands as well as fresh produce. However, these larger, more upmarket stores
account for only a tiny proportion of the total number of traditional grocery retailers outlets in
Bangladesh.
▪ Low-income consumers are most likely to shop in traditional roadside grocery stores and
kiosks. Many of these small stores have low overheads such as rent and utilities, while most
have only one employee. This enables them to offer their merchandise at very low prices. In
particular, modern retailers face high commercial rents, especially in shopping centres.
▪ Some middle-income consumers prefer to shop in modern grocery retailers, although higher
prices and concerns over the quality of the merchandise on offer in modern outlets, especially
fresh produce, mean that tradition outlets remain the most popular. In response to the
increasing competition they face from modern grocery retailers, some traditional grocery
retailers have made improvements to the layout of their stores and décor, organising products
by category and building attractive display shelves to improve the shopping experience and
match the clean and attractive appearance of convenience stores and supermarkets. In
addition, growing numbers of traditional grocery retailers are stocking a wider range of items,
including from leading brands, to appeal to quality-conscious middle-income consumers.
▪ The prevalence of traditional shanty house-type shops is decreasing appreciably in both rural
and urban areas. These types of outlets are increasingly being replaced by more formal and
professional types of outlets made from bricks and with large glass windows, many of which
are also pleasantly decorated. Interior décor is becoming more important for many
Bangladeshi people, encouraging traditional retailers to renovate their stores so as to appeal
to a wider consumer audience. Furthermore, many traditional retailers are now installing
refrigerators and freezers, digital scales and lighted shop signs to give their outlets more
professional appearance and make them more appealing at a time when incomes are rising
and consumers are becoming more sophisticated in their tastes.
▪ Among the items that are most commonly sold via traditional grocery retailers are bakery
products, confectionery and non-alcoholic drinks and shops selling these types of products
are becoming more common in urban and rural areas as demand increases. Among the
factors boosting demand for these products are the busy lifestyles being led by the urban
middle-class, while very high population density and traffic congestion mean that many people
are reluctant to travel very far to go shopping in a shopping centre or bazaar. Furthermore, it
is becoming more common for consumers of all income levels in both urban and rural areas to
host or attend social events such as birthday parties, get-togethers, new year parties and
various other events such as friends day and this is also pushing consumption of types of
products that are typically sold in the traditional grocery retailers outlets.
▪ Bangladesh’s traditional grocery retailers continue to face stiff competition from informal
retailing. In particular, informal retailers are able to undercut their rivals operating in traditional
formal channels as they rarely pay any tax at all. There are many traders in open markets and
street vendors offering a wide range of groceries, particularly fresh fruit and vegetables, fish
and seafood, meat and poultry spices and homemade prepared food informally in all parts of
the country. Street vendors usually ply their trade on foot or from rickshaws, while many are a
regular presence at the weekly or bi-weekly open markets that are a common feature of life in
both rural and urban areas of the country. Some itinerant retailers also work in residential
areas, going door-to-door and offering what many Bangladeshis see as the ultimate in
shopping convenience.
▪ Traditional grocery retailers is slated for further positive sales growth over the forecast period.
Rising demand is set to be due mainly to rising disposable income levels and the expansion
of the urban middle class. In addition, the highly entrepreneurial nature of many business
operators in the channel means that they are often very alert to opportunities to adapt their
operations to cater to emerging consumer demand trends, with higher profits in mind. In urban
areas, traditional grocery retailers are likely to continue benefiting from their price advantage
in comparison with modern grocery retailers, with many also starting to benefit from their
offering an increasingly wide range of leading brands.
▪ Traditional grocery retailers are almost always independent operations and they are most
often family-run businesses. For this reason, there are no clear leaders in the channel. Given
the small size of most of these outlets in the small scale of their operations, it is common for
them to be staffed by just one or two employees.
Chart 5 Traditional Grocery Retailers: Traditional Grocery Retailer (a)
Chart 6 Traditional Grocery Retailers: Traditional Grocery Retailer (b)
Channel Data
Table 40 Traditional Grocery Retailers: Value Sales, Outlets and Selling Space 2014-
2019
2014 2015 2016 2017 2018 2019
Value sales BDT bn 1,526.9 1,630.0 1,793.1 2,020.1 2,254.0 2,511.2

Outlets '000 695.8 698.5 701.6 705.0 708.4 711.7
Selling Space mn sq m 40.1 40.8 41.4 42.2 42.9 43.6
Table 41 Traditional Grocery Retailers: Value Sales, Outlets and Selling Space: %
Growth 2014-2019
% growth
2018/19 2014-19 CAGR 2014/19 Total

Outlets 0.5 0.5 2.3
Table 42 Traditional Grocery Retailers Forecasts: Value Sales, Outlets and Selling Space
2019-2024
2019 2020 2021 2022 2023 2024
Value sales BDT bn 2,511.2 2,629.2 2,747.6 2,865.7 2,983.2 3,099.5

Outlets '000 711.7 715.0 718.2 721.4 724.5 727.4
Selling Space mn sq m 43.6 44.2 44.8 45.4 46.0 46.5
trade sources
Table 43 Traditional Grocery Retailers Forecasts: Value Sales, Outlets and Selling
Space: % Growth 2019-2024
% growth
2019/20 2019-24 CAGR 2019/24 Total

Outlets 0.5 0.4 2.2
trade sources
NON-GROCERY SPECIALISTS
Prospects
▪ Non-grocery specialists continues to register positive growth and this is due mainly to the
expansion of Bangladesh’s urban middle-class. Population growth, rising incomes and
urbanisation are all major background trends contributing to the increasing numbers of
affluent consumers who are becoming more aspirational in their purchasing habits.
Nevertheless, the majority of consumers remain highly price-sensitive, despite the growing
numbers who prioritise quality over price and who are attracted by leading brands.
▪ Rising spending on non-essential products is also been supported by increasing levels of
sophistication among the consumer base. More Bangladeshis are becoming keener to
present themselves and their homes as attractive and modern, a trend which has been
spurred by the spread of social media. In particular, these trends have been beneficial for
apparel and footwear specialist retailers, health and beauty specialist retailers, sports goods
stores and jewellery and watch specialist retailers, with electronics and appliance specialist
retailers also benefiting from consumers becoming increasingly house-proud.
▪ Electronics and appliance specialist retailers and apparel and footwear specialist retailers are
among the most popular channels in non-grocery specialists, alongside chemists/pharmacies.
Bangladesh is a major producer of apparel and footwear a global level and the domestic
apparel and footwear market remains significant due to the country’s large population.
Furthermore, economic development and the rising importance of maintaining a smart
appearance, especially among young people, have combined with the emergence of Western
fashion trends to support higher demand for fashion apparel and footwear. Chained apparel
footwear specialist retailers are now present in most parts of the country, including even
smaller regional towns and cities. Sales of footwear and personal accessories are also
benefiting from the trend for matching different items of apparel, footwear and personal
accessories such as jewellery.
▪ Electronics and appliance specialist retailers meanwhile continues to benefit from the
increasing interest in a wide range of consumer durables as Bangladesh people pay more
attention to the comfort and levels of equipment in their homes. In particular, LCD TVs and
refrigeration appliances have shown highly promising growth trends in recent years. High-
income buyers are attracted by the leading global brands, while less low-and mid-income
consumers tend to prefer lower-priced brands such as Symphony and Walton, each of which
enjoys widespread popularity among Bangladesh’s less affluent consumers.
▪ Smartphones were the runaway success story for most electronics and appliance specialist
retailers during the review period, despite the recent spike in import duty from 32% to 50% for
these products, a major undertaking in an effort to support local manufacturing. The result is
that Samsung, Walton and Symphony have begun to manufacture and/or assemble smart
phones in Bangladesh to reduce costs and remain competitive.
▪ Another factor that has spurred growth in non-grocery specialists in recent years is the
widening access to consumer credit. More retailers and channels such as electronics and
appliance specialist retailers and jewellery and watch specialist retailers now offer 12-month
interest-free credit on purchases over a certain amount. Furthermore, the youth of
Bangladesh’s population is another factor boosting sales in non-grocery specialists, with
young adults particularly aspirational in their shopping habits. Urbanisation is also a major
driver of sales growth, with non-grocery specialists largely limited to urban areas such as
Dhaka and Chittagong.
▪ With the vast majority of consumers remaining highly price-sensitive, most non-grocery
specialists make regular use of discount sales and price promotions. However, there is also a
growing focus on offering higher quality merchandise and a more pleasant shopping
experience. With many consumers shifting away from informal vendors towards formal non-
grocery specialists as their incomes rise, they are becoming more interested in products with
guaranteed quality. Sales tend to peak on Fridays, a day of rest when few consumers have
work, which means that they have the time and inclination to browse in shops. Sales via non-
grocery specialists also tend to peak in the run-up to major festivals such as Eid, when most
non-grocery specialists will engage in intense price discounting in an effort to attract more
consumers.
▪ Convenience is a less important factor in terms of attracting consumers to non-grocery
specialists outlets. Most consumers are resigned to the fact that they will have to travel to
reach such outlets as they tend to be located in city centres or urban shopping centres,
braving the underdeveloped travel infrastructure and traffic congestion to go shopping.
▪ E-commerce continues to pose significant competition to non-grocery specialists, with online
marketplaces typically offering similar products at lower prices and with home delivery.
Furthermore, the majority of e-commerce players accept cash-on-delivery as a payment
method. Lower overheads mean that players active in e-commerce are able to offer lower
prices than store-based retailers. Department stores also present strong competition to non-
grocery specialists, offering unique ranges of products, including the types of foreign brands
coveted by aspirational young urban consumers.
▪ Non-grocery specialists is slated for positive growth over the forecast period, with the channel
set to benefit from the ongoing expansion of the urban middle class, rising income levels and
widening access to consumer credit. Furthermore, the significant expansion of the channel’s
reach via the opening of new outlets is set to spur growth. Many retail entrepreneurs are keen
to capitalise on rising consumer demand and this is likely to see the entry of numerous new
players while the leading chains continue to expand.
▪ Nevertheless, the development of non-grocery specialists is set to continue being hindered by

low average income levels among most Bangladeshis and the fact that the majority of people
who live in rural areas have little or no access to these outlets due to their being located
predominantly in urban areas. Moreover, with the spending of most consumers focused on
the absolute essentials and with informal retailing set to remain a major presence, demand for
non-grocery specialists is likely to remain limited to affluent mid- and high-income consumers.
Among this affluent urban consumer base meanwhile consumers are likely to become
increasingly interested in e-commerce due to the value and convenience that this emerging
channel represents.
▪ Non-grocery specialists is a highly fragmented channel, with none of the leading brands able
to generate more than 1% of value sales by the end of the review period. Edison Group's
Symphony chain of electronics and appliance specialist retailers remains the leading brand,
with this player focusing on mobile phones and having an impressive 288 outlets at the end of
the review period. The chain continues to benefit from its reputation for offering the latest
products, which has helped it to appeal to aspirational mid- and high-income consumers.
▪ Electronics and appliance specialist retailers chains Walton Plaza and Rangs rank second
and third in non-grocery specialists respectively, offering a wide range of consumer
appliances and consumer electronics. Walton competes via cashbacks, discounts and
consumer credit on various types of products, notably refrigeration appliances. While neither
Walton Plaza nor Symphony offers e-commerce, each of them has a highly informative
website that showcases their respective product ranges, while Walton Plaza’s website
enables consumers to check products for in-store availability. Crucially, South Korean
companies LG and Samsung are slated to begin manufacturing consumer electronics and
consumer appliances in Bangladesh during the forecast period, which is likely to make their
products considerably cheaper for local consumers and this is almost certain to boost demand
for electronics and appliance specialist retailers.
▪ Singer Bangladesh is the largest home and garden specialist retailer in Bangladesh. The
company offers a wide range of consumer durables, including consumer electronics,
consumer appliances and the full range of homewares, among other items.
▪ With demand for branded apparel and footwear rising significantly, international brands are
entering apparel that was specialist retailers. April 2019 saw sportswear specialist Puma
launch its first flagship store in Bangladesh, in collaboration with DBL group. As DBL group is
a major player in bringing vicious crucial garment manufacturing sector, which means that it
has significant resources for investing in the establishment of a solid and extensive retail
chain in Bangladesh.
▪ France-based multinational sports goods stores chain Decathlon opened its first large-scale
store in Bangladesh during 2019. This store is located in the Uttara neighbourhood of Dhaka.
Late 2018 meanwhile saw the entry of Orion Group with its chain of stores that offer a wide
range of leather goods and footwear and by the end of the review period the retailer was
already operating 35 stores in Bangladesh.
Chart 7 Non-Grocery Specialists: Apparel and Footwear Specialist Retailer (a)
Chart 8 Non-Grocery Specialists: Homewares and Home Furnishing Store (b)
Channel Data
Table 44 Non-Grocery Specialists: Value Sales, Outlets and Selling Space 2014-2019
2014 2015 2016 2017 2018 2019
Outlets 60,691.0 63,954.0 68,326.0 72,922.0 77,657.0 82,594.0
Selling Space '000 sq m 6,200.2 6,811.8 7,498.9 8,204.5 8,921.1 9,642.2
Table 45 Non-Grocery Specialists: Value Sales, Outlets and Selling Space: % Growth
2014-2019
% growth
2018/19 2014-19 CAGR 2014/19 Total

Outlets 6.4 6.4 36.1
Table 46 Sales in Non-Grocery Specialists by Channel: Value 2014-2019
BDT million
2014 2015 2016 2017 2018 2019
Apparel and Footwear 94,586.4 103,136.1 115,758.3 127,921.0 141,359.0 156,593.0

Specialist Retailers
Electronics and 56,553.2 59,697.0 64,025.1 67,602.0 71,502.0 76,064.2
Appliance Specialist
Retailers
Health and Beauty 109,424.0 118,680.3 133,204.9 147,069.6 162,519.1 180,483.0
Home and Garden 10,898.4 11,983.0 13,066.9 13,990.1 14,976.6 16,110.9
Leisure and Personal 31,936.9 34,295.2 38,250.7 42,365.7 47,004.0 52,547.8
Goods Specialist
Retailers
Other Non-Grocery 67,303.2 72,549.0 80,353.4 87,404.6 95,004.4 103,831.5
Specialists
Table 47 Sales in Non-Grocery Specialists by Channel: % Value Growth 2014-2019
2018/19 2014-19 CAGR 2014/19 Total
Apparel and Footwear Specialist 10.8 10.6 65.6

Retailers
Electronics and Appliance Specialist 6.4 6.1 34.5
Retailers
Health and Beauty Specialist Retailers 11.1 10.5 64.9
Home and Garden Specialist Retailers 7.6 8.1 47.8
Leisure and Personal Goods Specialist 11.8 10.5 64.5
Retailers
Other Non-Grocery Specialists 9.3 9.1 54.3
Table 48 Non-Grocery Specialists Outlets by Channel: Units 2014-2019
outlet
2014 2015 2016 2017 2018 2019

Electronics and 5,278.0 5,405.0 5,515.0 5,624.0 5,730.0 5,827.0
Retailers
Home and Garden 278.0 297.0 318.0 341.0 366.0 391.0
Goods Specialist
Retailers
Specialists
Table 49 Non-Grocery Specialists GBO Company Shares: % Value 2015-2019

Company 2015 2016 2017 2018 2019
Walton Group 0.4 0.4 0.4 0.4 0.4

Edison Group 0.5 0.5 0.5 0.5 0.4
Rangs Electronics Ltd 0.1 0.1 0.1 0.1 0.1
Others 98.9 98.9 99.0 99.0 99.0
Total 100.0 100.0 100.0 100.0 100.0
Table 50 Non-Grocery Specialists GBN Brand Shares: % Value 2016-2019

Symphony Edison Group 0.5 0.5 0.5 0.4

Walton Plaza Walton Group 0.4 0.4 0.4 0.4
Rangs Rangs Electronics Ltd 0.1 0.1 0.1 0.1
Others 99.0 99.0 99.0 99.1
Total 100.0 100.0 100.0 100.0
Table 51 Non-Grocery Specialists LBN Brand Shares: Outlets 2016-2019
sites/outlets
Symphony Edison Group 276 282 288 288

Walton Plaza Walton Group 235 246 255 265
Rangs Rangs Electronics Ltd 75 78 83 85

Others Others 67,740 72,316 77,031 81,956
Total Total 68,326 72,922 77,657 82,594
Table 52 Non-Grocery Specialists LBN Brand Shares: Selling Space 2016-2019

Symphony Edison Group 33.3 36.1 36.4 36.4

Walton Plaza Walton Group 28.4 30.6 32.1 34.4
Rangs Rangs Electronics Ltd 9.1 9.7 10.5 11.1
Others Others 7,428.1 8,128.1 8,842.1 9,560.3
Total Total 7,498.9 8,204.5 8,921.1 9,642.2
Table 53 Non-Grocery Specialists Forecasts: Value Sales, Outlets and Selling Space
2019-2024
2019 2020 2021 2022 2023 2024
Outlets 82,594.0 87,700.0 92,877.0 98,131.0 103,311.0 108,362.0
Selling Space '000 sq m 9,642.2 10,360.9 11,061.6 11,763.7 12,461.7 13,148.6
Table 54 Non-Grocery Specialists Forecasts: Value Sales, Outlets and Selling Space: %
Growth 2019-2024
% growth
2019/20 2019-24 CAGR 2019/24 Total

Outlets 6.2 5.6 31.2
Table 55 Forecast Sales in Non-Grocery Specialists by Channel: Value 2019-2024
BDT million
2019 2020 2021 2022 2023 2024

Electronics and 76,064.2 76,420.5 76,851.8 77,466.6 78,163.8 78,945.4
Retailers

Home and Garden 16,110.9 16,368.2 16,646.1 16,945.7 17,267.7 17,613.1
Goods Specialist
Retailers
Specialists
trade sources
Table 56 Forecast Sales in Non-Grocery Specialists by Channel: % Value Growth 2019-

2024
2019/2020 2019-24 CAGR 2019/24 Total

Retailers
Retailers
Retailers
trade sources
Table 57 Forecast Non-Grocery Specialists Outlets by Channel: Units 2019-2024
outlet
2019 2020 2021 2022 2023 2024

Electronics and 5,827.0 5,920.0 6,009.0 6,093.0 6,172.0 6,246.0
Retailers
Home and Garden 391.0 417.0 443.0 470.0 497.0 524.0
Goods Specialist
Retailers
Specialists
trade sources
Table 58 Forecast Non-Grocery Specialists Outlets by Channel: % Unit Growth 2019-

2024
% unit growth
2019/20 2019-24 CAGR 2019/24 Total

Retailers
Retailers
Retailers
trade sources
MIXED RETAILERS
Prospects
▪ At the end the review period, mixed retailers in Bangladesh remained a relatively
underdeveloped retail channel. The presence of mixed retailers remains confined almost
entirely to department stores located in Dhaka and Chittagong. Only urban consumers would
be able to afford to shopping department stores due to high prices. Most of these outlets are
small by international standards and have a relatively narrow focus, including homewares,
beauty and personal care and tissue and hygiene, as well as limited ranges of shelf stable
packaged food. Some outlets also offer apparel and footwear, consumer electronics,
consumer appliances and giftware.
▪ There are very few mass merchandisers present in Bangladesh and this is linked to the
substantial financial investment required to open such an outlet and high operating costs.
Although it is likely that there would be a large and enthusiastic consumer base for mass
merchandisers, most consumers continue to prefer variety stores, which have a price
advantage over warehouse clubs due to lower overheads. Furthermore, large-format retailers
continue to struggle to find suitable premises in busy urban areas due to high population
density and a lack of suitable or retail spaces. With the out-of-town retail economy still at a
very early stage of development in Bangladesh, and with traffic congestion remaining a major
factor encouraging people to shop as locally as possible, variety stores is likely to maintain a
huge advantage over mass merchandisers for the foreseeable future. Warehouse clubs
meanwhile are not yet present in Bangladesh. However, it is likely that these outlets could find
favour in the country where traditional open markets of long been the retail channel of choice
for many among the country’s low-income majority.
▪ Demand for department stores is rising as urbanisation and rising income levels continue to
support the expansion of Bangladesh’s middle-income group. More consumers are thus
becoming interested in non-essential purchases, including the types of products offered by
department stores. In particular, demand continues to rise for beauty and personal care as it
becomes increasingly important to maintain an attractive and well-groomed appearance,

especially among affluent young urban consumers.
▪ Another factor which makes department stores popular among affluent consumers is that they
are synonymous with high-quality products and guaranteed authenticity. This also helps
department stores to justify their higher prices. In addition, affluent consumers appreciate
department stores for their wide product ranges and the convenience that they are perceived
to offer, particularly as very high population density in urban areas and traffic congestion
make travelling across town problematic in all of Bangladesh’s major cities.
▪ Sales via department stores tend to increase significantly in the run-up to major social events
such as Eid and Pahela Baishak. According to industry sources, sales spike heavily in the
run-up to Eid, with you-non-year increases being seen in seasonal volume and value sales.
▪ Western brands are becoming increasingly popular in Bangladesh’s department stores and
this is linked to the increasingly widespread belief that Western brands offer better quality,
especially when it comes to beauty and personal care.
▪ Mixed retailers faces growing competition from the rise of e-commerce, with informal online
sales posing particularly significant challenges. Social media is increasingly being used as an
informal online sales forum, especially Facebook, with customers paying cash on delivery for
their orders. Nevertheless, most consumers continue to prefer shopping in department stores
as this makes it possible for them to see, feel and experience products first-hand as well as
giving them access to sales assistants for advice and support. Furthermore, many affluent
consumers increasingly view shopping in department stores as an enjoyable leisure activity in
its own right.
▪ The forecast period is expected to see a positive performance in mixed retailers as
urbanisation, population growth and rising incomes combine to improve the prospects for
Bangladesh’s leading in department stores. Retailers operating in the channel are set to
continue benefiting from their reputation for high quality and the value that many affluent
Bangladeshis place on the expert advice of trained sales staff. Furthermore, the wide ranges
of products on offer are set to remain highly appealing. As a result, more department stores
are expected to open during the forecast period, mainly located in shopping centres located in
suburban areas on the periphery of the country’s largest cities.
▪ Mustafa remains the leading name in the mixed retailers in Bangladesh. The Mustafa
department store has its roots in Singapore and is one of the most iconic retail outlets in
Dhaka, offering a wide range of apparel and footwear, sports goods and toys and games. The
Mustafa department store is based in Bashundhara City Mall and has a premium positioning.
It is viewed as offering high quality, which has made it popular among affluent consumers
despite its reputation for very high prices.
▪ Almas Super Shop is one of the leading brands in mixed retailers and the chained retailer
benefits from its strong reputation for superior customer service and its offer of a wide range
of high-quality products. The retailer’s main outlet is located at Gulshan-1 in Dhaka and its
owner is the only company to operate numerous branded mixed retailers outlets. All Alma’s
Super Shops are located in Dhaka, offering an extensive range of products including
jewellery, apparel and footwear, toys and games, personal accessories, packaged food,
stationery and media products as well as homewares, beauty and personal care and tissue
and hygiene items.
▪ Japanese variety stores brand Mini So was launched in Bangladesh during January 2018 and
by the end of the year there were five Mini So outlets operating in the country, with the chain
having expanded to ten stores by the end of 2019. Mini So is currently operating
independently in Bangladesh and it is expected that the ongoing expansion of the chain’s
footprint in the country will result in higher levels of competition in mixed retailers.
▪ The Almas Super Shop and Mini So chains are likely to experience further expansion during
the forecast period, while new mixed retailers chains are expected to emerge. The stores
operated under these names tend to be franchised outlets operated by entrepreneurs who are
keen to cater to emerging consumer demand trends. Furthermore, as interest in non-essential
goods and demand for convenience intensifies among the swelling ranks of Bangladesh’s
mid- and high-income urban consumers, more independent department stores are expected
to open additional outlets to cater to the needs of this crucial target audience.
Chart 9 Mixed Retailers: Mixed Retailer (a)
Chart 10 Mixed Retailers: Mixed Retailer (b)
Channel Data
Table 59 Mixed Retailers: Value Sales, Outlets and Selling Space 2014-2019
2014 2015 2016 2017 2018 2019
Outlets 72.0 83.0 95.0 107.0 119.0 131.0
Table 60 Mixed Retailers: Value Sales, Outlets and Selling Space: % Growth 2014-2019
% growth
2018/19 2014-19 CAGR 2014/19 Total

Outlets 10.1 12.7 81.9
Table 61 Sales in Mixed Retailers by Channel: Value 2014-2019
BDT million
2014 2015 2016 2017 2018 2019
Department Stores 25,282.8 28,154.7 31,768.9 35,200.7 39,089.3 43,675.1

Mass Merchandisers - - - - - -
Variety Stores - - - - - -
Warehouse Clubs - - - - - -
Mixed Retailers 25,282.8 28,154.7 31,768.9 35,200.7 39,089.3 43,675.1
Table 62 Sales in Mixed Retailers by Channel: % Value Growth 2014-2019
2018/19 2014-19 CAGR 2014/19 Total
Department Stores 11.7 11.6 72.7

Mass Merchandisers - - -
Variety Stores - - -
Warehouse Clubs - - -
Table 63 Mixed Retailers Outlets by Channel: Units 2014-2019
outlet
2014 2015 2016 2017 2018 2019
Department Stores 72.0 83.0 95.0 107.0 119.0 131.0

Mixed Retailers 72.0 83.0 95.0 107.0 119.0 131.0
Table 64 Mixed Retailers Outlets by Channel: % Unit Growth 2014-2019
% unit growth
2018/19 2014-19 CAGR 2014/19 Total

Table 65 Mixed Retailers GBO Company Shares: % Value 2015-2019

Company 2015 2016 2017 2018 2019
Mustafa Mart Pvt Ltd 3.0 2.6 2.3 2.0 1.8

Others 97.0 97.4 97.7 98.0 98.2
Total 100.0 100.0 100.0 100.0 100.0
Table 66 Mixed Retailers GBN Brand Shares: % Value 2016-2019

Mustafa Mustafa Mart Pvt Ltd 2.6 2.3 2.0 1.8

Others 97.4 97.7 98.0 98.2
Total 100.0 100.0 100.0 100.0
Table 67 Mixed Retailers LBN Brand Shares: Outlets 2016-2019
sites/outlets
Mustafa Mustafa Mart Pvt Ltd 1 1 1 1

Others Others 94 106 118 130
Total Total 95 107 119 131
Table 68 Mixed Retailers LBN Brand Shares: Selling Space 2016-2019

Mustafa Mustafa Mart Pvt Ltd 6.0 6.0 6.0 6.0

Others Others 275.6 313.9 352.3 390.0
Total Total 281.6 319.9 358.3 396.0
Table 69 Mixed Retailers Forecasts: Value Sales, Outlets and Selling Space 2019-2024
2019 2020 2021 2022 2023 2024
Outlets 131.0 143.0 154.0 165.0 175.0 184.0
trade sources
Note: Forecast value data in constant terms
Table 70 Mixed Retailers Forecasts: Value Sales, Outlets and Selling Space: % Growth
2019-2024
% growth
2019/20 2019-24 CAGR 2019/24 Total

Outlets 9.2 7.0 40.5
trade sources
Table 71 Forecast Sales in Mixed Retailers by Channel: Value 2019-2024
BDT million
2019 2020 2021 2022 2023 2024
Department Stores 43,675.1 45,946.3 48,289.5 50,704.0 53,188.5 55,741.5

Mixed Retailers 43,675.1 45,946.3 48,289.5 50,704.0 53,188.5 55,741.5
trade sources
Table 72 Forecast Sales in Mixed Retailers by Channel: % Value Growth 2019-2024
2019/2020 2019-24 CAGR 2019/24 Total

trade sources
Table 73 Forecast Mixed Retailers Outlets by Channel: Units 2019-2024
outlet
2019 2020 2021 2022 2023 2024
Department Stores 131.0 143.0 154.0 165.0 175.0 184.0

Mixed Retailers 131.0 143.0 154.0 165.0 175.0 184.0
Table 74 Forecast Mixed Retailers Outlets by Channel: % Unit Growth 2019-2024
% unit growth
2019/20 2019-24 CAGR 2019/24 Total

DIRECT SELLING
Prospects
▪ Direct selling is present in Bangladesh, although the channel continues to struggle to
establish itself strongly. Direct selling companies operating in the country face a number of
constraints, including heavy competition from informal direct selling. Many informal retailers
call door-to-door in residential areas, offering a wide range of goods. Consumers are
generally more likely to trust a well-known friend or family member engaging in informal direct
selling than they would be to trust an unfamiliar direct selling representative, even if they were
representing well-known brands. Online direct selling is also becoming increasing common in
major urban areas, although it is increasingly being overshadowed by the rise of informal e-
commerce via social media.
▪ Despite the challenges that the channel faces, direct selling is becoming increasingly popular
in Bangladesh. Direct selling is an especially popular activity among women, although most of
these people continue to operate their direct selling businesses informally. In rural areas,
working as an informal direct selling agent can enable individuals to make a significant
contribution to their overall household income and this makes it popular, especially as there
are often few alternative sources of employment in such areas. In addition, the customer base
for direct selling is predominantly female, with a strong focus on beauty and personal care
across the channel.
▪ The prevalence of informal direct selling continues to have a detrimental impact on the
reputations of formal direct selling companies. For instance, many consumers automatically
associate door-to-door selling with counterfeit products and less than completely open and
honest sales pitches. It is common for householders to refuse to let strangers into the yards,
while hawkers and informal direct selling agents are routinely banned from entering business
premises.
▪ Moreover, many consumers still remember a major scandal surrounding direct selling from
several years ago. Destiny Group had been operating in the country as a major multilevel
marketing company and it was found to be acting fraudulently, resulting in the introduction of
new legislation. The Multilevel Marketing Activities (Control) Ordinance proposed prison
sentences of 10 years for those found to be operating multilevel marketing businesses without
a licence. This legislation has unfortunately also place limits on the ability of legitimate
multilevel marketing direct selling companies to offer home with, consumer electronics,
consumer appliances, beauty and personal care items, herbal/traditional medicines,
telecommunications services, training-related products and services and agricultural goods.
The authorities have also withdrawn multilevel marketing licences from a number of
companies in response to poor business practices, including MXN Modern Herbal Food and
World Mission 21.
▪ Informal e-commerce via social media platforms, particularly Facebook, has eroded the
position of direct selling companies, few of whom have so far been able to harness the power
of the internet to improve their operations. The global leaders in direct selling have little
country-specific social media presence in Bangladesh, although some of the more ambitious
and successful direct selling representatives have their own unofficial Facebook pages, using
them to arrange face-to-face meetings with potential customers and to sell products, with
cash-on-delivery the normal payment method for such transactions.
▪ Direct selling is expected to generate strong growth over the forecast period. The channel is
likely to attract growing numbers of affluent urban professionals, especially female consumers
as the numbers of women in Bangladesh’s workforce continue to increase. Moreover, more
stringent government regulation of direct selling is likely to result in consumer trust in the
channel building strongly.
▪ Numerous start-ups are expected to be launched in direct selling as ambitious entrepreneurs
seek to capitalise on growing demand for a wide range of consumer goods among the
swelling ranks of Bangladesh’s mid-income consumers via this low-overhead channel. The
consumer base for direct selling is expected to expand, in line with the wider range of
products on offer. However, sales in the channel are set to continue being driven mainly by
women, with beauty and personal care and consumer healthcare set to remain the most
popular categories as a result.
▪ The leading brands in direct selling are strong global names that mainly target female
consumers. Amway is the leader, benefiting from its first-mover advantage due to its early
entry into Bangladesh in 2007. Herbalife Nutrition is the second leading player. However, it
should be noted that the considerably higher prices charged for the products offered under
these brands means that they are able to generate high value sales from moderate volume
sales.
▪ While Amway offers a relatively wide range of products via direct selling across numerous
consumer goods industries including beauty and personal care, consumer health and home
care, Herbalife Nutrition focuses almost exclusively on consumer health, offering mainly
weight management and wellbeing, vitamins and dietary supplements and sports nutrition.
▪ Apart from these two leading players, the competitive environment in direct selling is highly
fragmented. Sales are divided among numerous small local entrepreneurs that have been
attracted to the channel by low overheads and the promise of strong sales growth.
Channel Data
Table 75 Sales in Direct Selling: Value 2014-2019
BDT million
2014 2015 2016 2017 2018 2019
Direct Selling 5,224.0 5,814.2 6,653.4 7,488.3 8,274.6 9,131.2

Table 76 Sales in Direct Selling: % Value Growth 2014-2019
2018/19 2014-19 CAGR 2014/19 Total

Table 77 Direct Selling GBO Company Shares: % Value 2015-2019

Company 2015 2016 2017 2018 2019
Amway Corp 5.3 5.5 5.6 6.3 6.8

Herbalife Nutrition Ltd - - - 4.8 5.2
Herbalife Ltd 4.0 4.2 4.4 - -
Others 90.7 90.3 90.0 88.8 88.0
Total 100.0 100.0 100.0 100.0 100.0
Table 78 Direct Selling GBN Brand Shares: % Value 2016-2019

Amway Amway Corp 5.5 5.6 6.3 6.8

Herbalife Nutrition Herbalife Nutrition Ltd - - 4.8 5.2
Herbalife Nutrition Herbalife Ltd 4.2 4.4 - -
Others 90.3 90.0 88.8 88.0
Total 100.0 100.0 100.0 100.0
Table 79 Forecast Sales in Direct Selling: Value 2019-2024
BDT million
2019 2020 2021 2022 2023 2024
Direct Selling 9,131.2 9,469.0 9,791.0 10,104.3 10,407.4 10,709.2

trade sources
Table 80 Forecast Sales in Direct Selling: % Value Growth 2019-2024
2019/2020 2019-24 CAGR 2019/24 Total

trade sources
E-COMMERCE
Prospects
▪ E-commerce continues to attract growing numbers of consumers in Bangladesh. Internet
access is widening considerably, mainly due to the rising popularity of smartphones and the
increasing four ability of mobile internet connections. Strong sales growth picks up even
further in the run-up to key festivals such as Eid.
▪ Nevertheless, formal e-commerce remained decidedly underdeveloped at the end of the
review period, with a high proportion of online sales still accounted for by informal sales via
social media. Indeed, relatively few consumers buy products via formal e-commerce, although
this is changing as rapidly increasing smartphone ownership expands the potential consumer
base for e-commerce. Apparel and footwear and beauty and personal care remain the most
popular product categories in e-commerce, although the range of products being purchased
via the channel continues to expand.
▪ E-commerce is conducted via to two main formats. The first is the websites of major online
retailers such as Daraz.com and online grocery specialist Chaldal.com. The second is online
marketplaces, which tend to generate far more interest among consumers due to their
reputations for lower prices. Leading players in this area include Daraz, Ajker Deal and
Rokomari.
▪ As in store-based retailing, informal online retailing continues to pose a major threat to formal
e-commerce. Informal e-commerce manifests mainly as sales via social media. As with
informal store-based retailing, the main attraction of informal e-commerce is lower prices, with
consumers generally willing to overlook the likelihood that they will be purchasing products of
inferior quality or counterfeit brands for the sake of economy.
▪ According to one recent study conducted by e-commerce player Kaymu.com.bd, some 60%
of Bangladesh’s e-commerce consumers are men aged between 25 and 34 years old. Middle-
agent elderly Bangladeshis generally do not feel comfortable engaging with e-commerce
because few of them are familiar with the internet. Furthermore, e-commerce sales are
heavily dominated by urban consumers and this is because relatively few people living in rural
areas have access to the internet.
▪ The development of e-commerce continues to be hampered by poor communications
infrastructure. Internet speeds remain low in most parts of the country, which can make it
difficult and frustrating to use the internet, including for purchasing goods via e-commerce.
The majority of people going online in Bangladesh are accessing the internet via a desktop
computer or laptop, while only around one-third of them using a mobile phone or tablet.
▪ Another factor hindering the development of e-commerce is that deliveries can be
problematic. In particular, the state post office is viewed as unreliable, with most sellers
instead preferring to use private couriers to complete their deliveries. There is also a strong
preference for cash on delivery the payment method and this is linked to widespread
concerns over the security of online payments. Moreover, few consumers have a financial
card, while there is also general reluctance pay remotely. E-commerce retailers that do not
accept cash-on-delivery as a payment method thus remain at a major disadvantage,
particularly in comparison with informal sellers operating on Facebook, all of whom accept
cash on delivery.
▪ According to an international internet usage survey conducted in August 2019, Bangladesh
ranks fifth in Asia in terms of the total number of Internet users. The survey found that there
were 90.5 million internet users in the country, up from just 100,000 in 2000, a sign of the
rapid growth being seen in the numbers of internet users in the country. This suggests that
the consumer audience for e-commerce in Bangladesh has grown substantially in recent
years and that it is likely to continue expanding over the forecast period.
▪ Faced with the very rapid development of e-commerce, the government of Bangladesh has
issued an official policy on digital commerce to facilitate the development of online businesses
in the country. Among the main aims of this policy are to make digital transactions as safe and
as secure as possible in order to build consumer trust in online payments and e-commerce.
Under this policy, e-commerce is banned for foreign companies that have not first formed a
joint venture with a local company. The policy’s overriding aim is to establish a nationwide
digital commerce system via the use of information and communication technology and to
transform the country’s commerce and trade by integrating digital processes, bringing
Bangladesh into line with emerging international standards. The policy is expected to provide
a strong boost to the development of e-commerce over the forecast period while also making
e-commerce in Bangladesh a more attractive investment proposition for foreign companies.
▪ The trade body representing the interests of the country’s emerging e-commerce sector, the
e-Commerce Association of Bangladesh (e-CAB), has demanded an extension of the tax
holiday that the sector currently benefits from in the forthcoming budget. e-CAB has also
urged the government to set the income tax rate for the sector at between 0.1% and 0.3%,
and to officially declare it as a “thriving sector”. Any extension of the tax holiday for e-
commerce companies would benefit both traders and consumers.
▪ The forecast period is expected to see further strong growth in e-commerce in Bangladesh.
Factors in favour of strong growth include the country's young population and surging interest
in smartphones and the internet. Growth is likely to be driven mainly by mobile internet
retailing, particularly due to the presence of a 4G mobile network since February 2018.
Additionally, the government project Connected Bangladesh, part of the Vision 2021 initiative,
will expand optical fibre networks to many rural areas, thus improving internet access for rural
dwellers. The government is also establishing a second submarine cable to provide
uninterrupted internet service, further improving the communications infrastructure and
presenting new opportunities to e-commerce. Current estimates suggest that there will be
more than 18.3 million internet subscribers in Bangladesh by 2020, with Boston Consulting
Group and Telenor having predicted that 32% of households throughout the country will have
at least one internet connection by the end of the forecast period. The number of mobile
phone users is set to continue rising, all of which is set to be favourable for sales growth in e-
commerce.
▪ Moreover, more formality is likely to be seen in e-commerce as growing numbers of
entrepreneurs currently engaged in informal online retailing begin using online marketplaces.
Larger store-based retailers meanwhile are expected to launch their own e-commerce sites.
However, many informal vendors are expected to continue buying and selling goods via
Facebook, although it is possible that this activity will be curbed by new regulations.
▪ Few of Bangladesh’s store-based retailers operate e-commerce sites. Chained grocery
retailers Shwapno and Meena Bazar are among the handful of store-based retailing players
that have launched their own internet retailing sites, although the home delivery reach of
these retailers remains limited. Shwapno for instance only delivers in Dhaka, while Meena
Bazar delivers in other major cities such as Chittagong. Neither Shwapno nor Meena Bazar
accept cash-on-delivery payments for orders however, which limits their potential consumer
audience to the few affluent consumers with financial cards.
▪ Online marketplaces on the other hand have so far proven highly successful. The leaders in
this area include Daraz, Ajker Deal and Rokomari. Chaldal.com meanwhile has also
experienced success as an online grocery specialist.
▪ Alibaba recently acquired Daraz Group, the owner of leading Bangladesh-based e-commerce
player Daraz, which operates and several other South Asian countries. Alibaba is a China-
based global e-commerce giant and its acquisition of Daraz is likely to have a major impact on
the future of e-commerce in Bangladesh.
▪ US-based global e-commerce giant Amazon and Walmart, the US-based global leader in
store-based retailing, are each slated to enter Bangladesh during the forecast period. This is a
clear sign that global retail companies are increasingly interested in making forays into what is
widely perceived as a market with huge growth potential, according to trade sources. Walmart
has already developed a very large office in Dhaka in anticipation of its entry into the country,
while Amazon is already in talks with government officials ahead of its launch in the country,
according to senior figures at e-Cab.
▪ Another international company that has recently announced its official entry into Bangladesh
is Xiaomi, a leading player in consumer electronics. As part of its growth plan in the country,
the China-based consumer electronics player is set to establish an e-commerce platform
during the forecast period. Xiaomi’s mi.com is already the eighth-largest e-commerce venture
in the world, ranking third in both China and India.
Channel Data
Table 81 E-Commerce by Channel and Category: Value 2014-2019
BDT million
2014 2015 2016 2017 2018 2019
E-Commerce 3,000.0 4,200.0 6,000.0 9,600.0 16,800.0 26,040.0

Note: Mobile e-commerce and cross-border e-commerce not included in e-commerce total to avoid double
counting.
Table 82 E-Commerce by Channel and Category: % Value Growth 2014-2019
2018/19 2014-19 CAGR 2014/19 Total
E-Commerce 55.0 54.1 768.0

Note: Mobile e-commerce and cross-border e-commerce not included in e-commerce total to avoid double
counting.
Table 83 Forecast E-Commerce by Channel and Category: Value 2019-2024
BDT million
2019 2020 2021 2022 2023 2024
E-Commerce 26,040.0 33,852.0 39,945.4 45,537.7 51,002.2 56,102.5

trade sources
Note 1: Mobile e-commerce and cross-border e-commerce not included in e-commerce total to avoid double
counting.
Table 84 Forecast E-Commerce by Channel and Category: % Value Growth 2019-2024
2019/2020 2019-24 CAGR 2019/24 Total
E-Commerce 30.0 16.6 115.4

trade sources
Note 1: Mobile e-commerce and cross-border e-commerce not included in e-commerce total to avoid double
counting.
HOMESHOPPING
Prospects
▪ Homeshopping has never developed into a significant retail channel in Bangladesh and
demand remains limited to relatively few mid- and high-income female consumers living in
major urban areas. There are some catalogue homeshopping players active in the country,
while satellite TV channels such as Bengal Digital host some TV homeshopping channels.
Nevertheless, consumer awareness of homeshopping remains limited, while the few
consumers who have some awareness of homeshopping are often reluctant to place their
trust in the quality and service on offer in the channel. There are also widespread concerns
over the reliability of the home delivery of products ordered via homeshopping due to the
country’s inadequate and inconsistent system, which also has implications for returning
defective or unwanted goods and receiving refunds.
▪ The strong emergence of e-commerce in recent years has placed considerable pressure on
homeshopping due to the high levels of competition that e-commerce presents to the channel.
The limited numbers of mid- to high-income consumers who previously formed the core
consumer base for homeshopping are increasingly shifting towards e-commerce, with the
reading players in homeshopping increasingly focusing on online sales in response.
▪ Homeshopping is unlikely to emerge as a significant retail channel in Bangladesh before the
end of the forecast period. The channel is struggling to attract new entrants as investors are
increasingly focusing on e-commerce and modern store-based retailing in a bid to capitalise
on dynamic and expanding channels that appeal to key consumer groups such as aspirational
mid-income urban-dwellers. Although some of the country’s store-based retailers are likely to
continue using catalogues to reach out to a wider consumer audience, notably in areas such
as homewares and home furnishings and consumer health, purchases are increasingly likely
to be completed in stores or online, rather than via homeshopping.
▪ One issue that homeshopping players continue to struggle with is the general preference
among Bangladeshi consumers to gain personal experience of products before they commit
to a purchase. Most people still prefer to physically see and touch products before they buy,
with a physical presence in store-based retailing remaining vital to success in the country’s
retailing industry. This, combined with the general lack of trust in homeshopping among most
consumers, place significant limits on the category’s general appeal.
COMPETITIVE LANDSCAPE
▪ Homeshopping remains a highly fragmented retailing channel, and it is very difficult to identify
any strong leaders in terms of sales. Most of the players present in the category focus mainly
on consumer health, apparel and footwear or homewares and home furnishings.
VENDING
Prospects
▪ Vending remains an insignificant retail channel in Bangladesh. The few vending machines
that are present in the country are located behind counters and operated by sales assistants
rather than being self-service vending machines, excluding them from the scope of
Euromonitor International research. This mode of vending is generally a response to concerns
over the threat of theft or vandalism or the desire to eliminate the use of counterfeit currency
as payment. Furthermore, generally speaking, people feel more comfortable using vending
machines that are located behind retail counters as this has long been a key element of local
vending culture.
▪ Vending machines in Bangladesh typically sell hot drinks, mainly coffee, or confectionery and
they are typically found behind the counters of traditional grocery retailers or public transport
interchanges in major cities. Growing numbers of vending machines are also being seen in
captive locations such as factories, offices and colleges, although these also excluded from
the scope of the research undertaken in the preparation of this report.
▪ There are some vending machines present in semi-captive locations such as hotels and
airports. These offer mainly packaged drinks, with some offering hot drinks. However, with the
prices charged in these machines generally very high by local standards, they cater mainly to
foreign tourists, expatriates and high-income locals.
▪ Very little in the way of innovation was seen in vending during 2019 and this is a reflection of
the channel’s niche status. The lack of general vending culture in Bangladesh means that
many consumers, specifically middle-aged and elderly people, are unfamiliar with modern
self-service technology and thus feel uncomfortable using vending machines. Another major
factor presenting challenges to the further penetration of vending machines is the inconsistent
and unreliable electricity supply. Although the situation with regards electricity supply is
improving, it is unlikely to improve to the extent that vending becomes more widespread
before the end of the forecast period.
▪ Vending is not expected to emerge strongly as a retailing channel in Bangladesh during the
forecast period. Indeed, vending has a long way to go before it enters the mainstream. It is
likely that the majority of vending machines in the country will continue to be located behind
counters and being operated by sales staff. Ongoing developments in retailing and consumer
foodservice are also likely to result in declines being seen in the overall numbers of vending
machines in Bangladesh over the forecast period.

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Retailing in Bangladesh

LIST OF CONTENTS AND TABLES

Table 44 Non-Grocery Specialists: Value Sales, Outlets and Selling Space

Table 73 Forecast Mixed Retailers Outlets by Channel: Units 2019-2024 ................ 47

sales as it does to formal e-commerce websites. Indeed, Facebook is emerging as a

Chart 1 Retailing: Non-Grocery Specialist (a)

Source: Euromonitor International

Chart 2 Retailing: Non-Grocery Specialist (b)

Source: Euromonitor International

Store-based Retailing 1,948.8 2,087.1 2,301.7 2,577.5 2,865.6 3,185.7

Table 2 Sales in Retailing by Store-based vs Non-Store: % Value Growth 2014-2019

% current value growth, retail value rsp excl sales tax

2018/19 2014-19 CAGR 2014/19 Total

Store-based Retailing 11.2 10.3 63.5

Table 3 Sales in Store-Based Retailing by Channel: Value 2014-2019

Grocery Retailers 1,552.8 1,658.6 1,825.3 2,056.0 2,294.2 2,556.4

Table 4 Sales in Store-Based Retailing by Channel: % Value Growth 2014-2019

% current value growth, retail value rsp excl sales tax

2018/19 2014-19 CAGR 2014/19 Total

Grocery Retailers 11.4 10.5 64.6

Table 5 Store-Based Retailing Outlets by Channel: Units 2014-2019

Grocery Retailers 696,274.0 699,000.0 702,077.0 705,503.0 708,903.0 712,247.0

Mixed Retailers 72.0 83.0 95.0 107.0 119.0 131.0

Table 6 Store-Based Retailing Outlets by Channel: % Unit Growth 2014-2019

Grocery Retailers 0.5 0.5 2.3

Table 7 Sales in Non-Store Retailing by Channel: Value 2014-2019

Direct Selling 5,224.0 5,814.2 6,653.4 7,488.3 8,274.6 9,131.2

Table 8 Sales in Non-Store Retailing by Channel: % Value Growth 2014-2019

% current value growth, retail value rsp excl sales tax

2018/19 2014-19 CAGR 2014/19 Total

Direct Selling 10.4 11.8 74.8

Table 9 Retailing GBO Company Shares: % Value 2015-2019

% retail value rsp excl sales tax

ACI Ltd 0.2 0.2 0.2 0.2 0.2

Table 10 Retailing GBN Brand Shares: % Value 2016-2019

% retail value rsp excl sales tax

Shwapno ACI Ltd 0.2 0.2 0.2 0.2

Table 11 Store-based Retailing GBO Company Shares: % Value 2015-2019

% retail value rsp excl sales tax

ACI Ltd 0.2 0.2 0.2 0.2 0.2

Table 12 Store-based Retailing GBN Brand Shares: % Value 2016-2019

% retail value rsp excl sales tax

Shwapno ACI Ltd 0.2 0.2 0.2 0.2

Table 13 Store-based Retailing LBN Brand Shares: Outlets 2016-2019

Brand (GBO) Company (NBO) 2016 2017 2018 2019

Shwapno ACI Ltd 55 60 63 65

Table 14 Non-Store Retailing GBO Company Shares: % Value 2015-2019

% retail value rsp excl sales tax

Amway Corp 3.1 2.9 2.5 2.1 1.8

Table 15 Non-Store Retailing GBN Brand Shares: % Value 2016-2019

% retail value rsp excl sales tax

Amway Amway Corp 2.9 2.5 2.1 1.8

Table 16 Forecast Sales in Retailing by Store-based vs Non-Store: Value 2019-2024

Store-based Retailing 3,185.7 3,330.4 3,476.6 3,623.8 3,771.5 3,919.3

Table 17 Forecast Sales in Retailing by Store-based vs Non-Store: % Value Growth

% constant value growth, retail value rsp excl sales tax

2019/2020 2019-24 CAGR 2019/24 Total

Store-based Retailing 4.5 4.2 23.0

Table 18 Forecast Sales in Store-Based Retailing by Channel: Value 2019-2024

Grocery Retailers 2,556.4 2,677.0 2,797.9 2,918.8 3,039.1 3,158.3