Maksud Rahman

E-COMMERCE OF BANGLADESH

The Challenges and Barriers in Bangladesh's E-Commerce Business

Thesis
CENTRIA UNIVERSITY OF APPLIED SCIENCES
International Business Administration
April 2023
ABSTRACT

Centria University April 2023 Author

of Applied Sciences Maksud Rahman
Degree programme
Bachelor of Business Administration -International Business
Name of thesis
E-COMMERCE OF BANGLADESH.
The Challenges and Barriers in Bangladesh's E-Commerce Business
Centria supervisor Pages
Sara Åhman 38 + 1
This thesis sought to examine the obstacles and challenges facing e-commerce in Bangladesh. E-com-
merce has grown in Bangladesh in recent years, but there are still barriers to its growth, which this
thesis attempted to highlight. The study made an effort to examine the major factors that led to Bang-
ladesh's slow e-commerce growth.

As a result of reviewing many e-commerce analyses, this research was created. Bangladesh has a
good reason for acknowledging e-commerce. The government of Bangladesh must follow a number
of steps to ensure that its citizens can conduct e-commerce. These actions entail setting up the infra-
structure necessary for effective e-commerce. E-commerce will result in more economic growth and
productivity, hence the government of Bangladesh should support it. Also, the government does not
have the stringent guidelines required for e-commerce, which may be a reason limiting its bright fu-
ture.

The study is mainly qualitative. Secondary sources, such as journals, newspapers, books, and govern-
ment online portals, were employed to assemble the essential collected data for the thesis. Also, the
thesis included primary data, in which respondents in Bangladesh were asked questions. The qualita-
tive approach allowed for a deeper understanding of the respondents' perspectives and experiences.
The use of both secondary and primary sources ensured a comprehensive analysis of the topic at hand.
After doing a review of the interview, an analysis of the findings and discussion was formed.

According to the research work, Bangladesh is falling short of the necessary criteria in e-commerce.
The fundamental cause is a lack of essential e-commerce infrastructure. The thesis also discovered
that there are purchasers of e-commerce in Bangladesh, and that the problems and barriers highlighted
in the thesis must be resolved in order to increase the number of e-commerce users. The safety
measures against roadblocks may inspire many aspiring entrepreneurs in Bangladesh to eagerly
launch an ecommerce business. Yet, the government must promote e-commerce usage and e-com-
merce company policies via education. This will clarify for company owners and the broader public
the benefits of using e-commerce as a means of conducting business.

Key words
Customer Behaviour, Challenges of growth, Credit cards, Domestic E-commerce, Debit cards, E-com-
merce, Internet accessibility , Lack of information of E-commerce
CONCEPT DEFINITIONS

E-Commerce
Electronic commerce
B2B
Business to Business
B2C
Business to Consumers
B2A
Business to Administration
C2C
Consumers to Consumers
C2B
Consumers to Business
C2A
Consumer to Administration
B2G
Business to Governments
BTRC
Bangladesh Telecommunication Regulatory Commission
COD
Cash on delivery
MFS
Mobile Financial Services
CONTENTS

1 INTRODUCTION................................................................................................................................1

2 MARKET BEHAVIOUR ....................................................................................................................3

2.1 Macro and micro environment .....................................................................................................4
2.2 E-Commerce ...................................................................................................................................4
2.3 Domestic E-Commerce in Bangladesh .........................................................................................5
2.4 Information Quality of website .....................................................................................................6
2.4.1 Online Purchase Intention ...................................................................................................7
2.4.2 E-commerce risks ..................................................................................................................8

3 CROSS-BORDER E-COMMERCE ..................................................................................................9

3.1 Legal guidance ..............................................................................................................................10
3.2 Major challenges ..........................................................................................................................11
3.2.1 Lack of technological knowledge .......................................................................................13
3.2.2 Payment Issues ....................................................................................................................14
3.2.3 Trust issues ..........................................................................................................................15
3.2.4 Financial Security ...............................................................................................................15
3.2.5 Poor warehouse and disparity of locations .......................................................................16
3.3 E-commerce shoppers through the mobile phone .....................................................................17
3.4 E-commerce Scandal In Bangladesh ..........................................................................................18

4 RESEARCH METHODOLOGY .....................................................................................................20

5 INTERVIEWS OF THE RESPONDENTS .....................................................................................22

5.1 Data analysis .................................................................................................................................25
5.2 Discussion ......................................................................................................................................26

6 CONCLUSION ..................................................................................................................................29

REFERENCES ........................................................................................................................................ 9
 1

1 INTRODUCTION

E-commerce started a new technology-based economy and a path towards the disintermediation of mar-
keting channels with the idea of bringing together global vendors and customers through the internet.
However, as time went on and businesses like eBay and Amazon.com emerged, business model trans-
formed into changes in the system. E-commerce's recent rise to prominence in both the business-to-
business and business-to-consumer industries has had a significant impact on the development of mar-
keting channels and strategies in both sectors. A significant factor that is connected to customer satis-
faction is also how easy it is to make purchases online. Because there are no costs involved, including
time and transportation, the exchange between the vendor and the potential buyer is quick and efficient.
The e-commerce industry makes money from a number of different sources, including brokerages from
sales activities, postage costs, sales revenue profits, restaurant incentives.

The aim of the thesis is to understand the state of e-commerce in Bangladesh from the perspective of its
consumers, providing valuable information for beginner company owners who will need to know the
customers' perspective in order to formulate a successful strategy. The study then goes on to analyze the
obstacles that must be addressed in order to launch an e-commerce business in Bangladesh. Possible
obstacles include the low level of literacy which can create difficulties for businesses to connect with
consumers, the lack of organized e-commerce infrastructure facilities that also makes it difficult for
business owners to establish a business online, the lack of trust among local customers, which can be an
obstacle to the growth of e-commerce business in Bangladesh, and the regulations, which is often com-
plex and difficult to navigate, which can cause delay in projects.

The probable benefits and drawbacks of launching an online company in Bangladesh should be carefully
examined before making the final choice.The objective of this study is to highlight the state of e-com-
merce in Bangladesh, the condition of the country's e-business infrastructure, and the experiences of
Bangladeshi consumers about online shopping. Moreover the theoretical part explains the concise anal-
ysis of the e-retail market in Bangladesh as well as insights in the moral standards and difficulties asso-
ciated with traditional buying behavior, technological barriers, negative thoughts, and a sense of insecu-
rity about putting money into products or services, among several other factors seen from the consumer's
point of view, which have been limiting the e-market. Investors and company owners who want to know
more about e-commerce sector of Bangladesh and its opportunities, as well as the potential danger or
 2

benifit they might face from this research.The thesis also explains the state of online business in Bang-
ladesh and the theories which focus attention to the obstacles of starting an online business. As major
roadblocks to the widespread use of e-commerce such as physical, technical, institutional, and socio-
economic, micro environment and cultural issues have been highlighted. However, the extent to which
these elements influence a nation's adoption of e-commerce varies greatly depending on the stage of
development the country is at. E-commerce readiness is a measurement of how prepared nations are to
embrace and execute e-commerce businesses.

It is true that Bangladesh has a long way to go before it can effectively engage in e-commerce. Both
qualitative research and interview-based technique will be used. The studies were done to ensure their
usefulness to the reader. Six one-on-one interviews will be conducted with respondents who are e-com-
merce coustomers in Bangladesh, in order to understand their viewpoints, the frequency of their use of
online shopping, and the perspectives behind their use of or not using the service, as well as the reasons
behind the slow growth of e-commerce in Bangladesh. The interviews with the rspondents will be
acknowledged as a core information throughout the thesis. The questions will be asked according to the
thesis research topic.
 3

2 MARKET BEHAVIOUR

The term market behaviour consists of two terms. A market may be described as any physical or digital
location where services or products are offered for sale, and analysis is the in-depth examination of its
features. ( Dibrell Craig & Hansen 2011) In conclusion, market behaviour is an evaluation of a market's
key aspects and characteristics. It gathers current and historical data about the items and services offered
in a market. The market study also includes an examination of external elements (political, economic,
social, and technical) to estimate future market trends (Wood 2007). The market orientation is a market
evaluation that aids in comprehending a certain sector (Karim & Qi 2018, 207). It provides a huge array
of information. For instance, market size, growth rate, and trends. Typically businesses utilize an indus-
try analysis study to learn about the worth of a sector in connection to company growth investments.
(Manzoor 2010)

Since the advent of e-commerce more than a decade ago, professionals in the field have been striving to
get a deeper understanding of online shoppers habits. Along with the growth of e-retailing, studies into
the behaviors of online shoppers continue to rise. A crucial knowledge of consumer behavior in the
virtual environment, as in the physical world, cannot be completed if the elements influencing the pur-
chase choice are ignored or misinterpreted. According to several researches, customers' purchasing hab-
its in conventional stores may not be the same as those in internet stores (Ahmed, Zaman, & Mahtab
2013, 165-170). It is anticipated that regular online shoppers would adopt online shopping more often
in the future. This really is due to the fact that frequent online shoppers have a higher level of confidence
in the specific website than less regular online shoppers. Indeed, there are specific economic features of
electronic marketplaces. (Harn Khatibi & Ismail 2006) The rise of the Internet as a major channel for
the exchange of information and the purchase of products and services has happened very quickly and
has influenced markets throughout the world. To compete in today's global economy, many businesses
have begun using the internet in an effort to reduce marketing expenses, and by extension, product prices.
Customers use the web to shop for products, but also to research other stores' pricing, product offerings,
and after-purchase support options. (Quelch & Klein 2007)
 4

2.1 Macro and micro environment

Macro environments are also known as external environments. Political, economic, natural, demo-
graphic, economic, technological, social-cultural, natural, technical, and political-legal factors make up
the six pillars of the external environment. (Kotler & Keller 2011) Performance may be impacted by
certain external variables outside the company's control. PESTEL and scenario planning are the methods
that may be used to investigate the macro environment (Lynch, R. 2009, 83). PESTEL, an abbreviation
for political, economic, sociocultural, technical, environmental, and legal analysis, is a method for doing
industrial analysis. PESTEL gives the firm a thorough list of elements that might determine the success
or failure of certain initiatives and aids in their analysis of how these aspects are evolving (Johnson 2011,
51). The PESTEL model is used to anticipate the future but is based on previous behavior according to
prescriptive strategists. Instead of doing a lengthy list analysis, it is crucial to choose a few elements
from a list and thoroughly examine them (Lynch et al. 2009, 85).

Internal environment is another name for micro environment. Internal elements include those that are
unique to the company and have an impact on its capacity to provide for its clients. Firm-specific ele-
ments consist of elements such as vendors, rivals, market distributors, clients, and neighbours (Kotler &
Gary 2010, 90). Micro environmental analysis looks at factors that directly affect a company's business
plan and its profitability (Blythe 2005, 27). An organization's micro environment is greatly influenced
by it. The micro environment is made up of elements that are near to a business and have an impact on
its capacity to service consumers (Kotler and Armstrong 2012, 66). These elements include the firm,
suppliers, marketing intermediaries, customer marketplaces, rivals, and publics (Aaker & McLoughlin
2007, 18).

2.2 E-Commerce

E-commerce is the abbreviation for electronic commerce. E-commerce may be defined as any activity
involving the purchase and sale of products and services online. In essence, it is a method of carrying
out business electronically. E-commerce refers to the purchasing, selling, and transferring of money
using digital communications. (Turban King Lee and Viehland 2004) The term "e-commerce" refers to
any business transaction that takes place entirely online, including the purchase decision and the subse-
quent customer service. Numerous companies all around the world have launched an e-commerce site
 5

as part of their operations, focusing on the various benefits that the internet market may provide. (Malla,
2018)

Since the late 1990s, e-commerce in the industrial world has expanded rapidly. There has been a signif-
icant shift in recent years toward the use of web-based businesses, with many formerly offline companies
now providing their services exclusively online. As a result, many corporations are expanding their
online presence. In an effort to better serve their consumers, businesses throughout the globe are increas-
ingly turning to digital networks for everything from product development and distribution to customer
support (Kevin and Kraemer 2002). E-commerce has been defined in a variety of ways by academics.
Although these definitions may vary significantly, they all believe that doing business online or elec-
tronically is the key essential component of e-commerce (Escobar-Rodríguez & Bonsón-Fernández
2017).

2.3 Domestic E-Commerce in Bangladesh

The following three categories of e-Commerce, according to the e-Commerce Association of Bangladesh
(e-CAB), are common in Bangladesh; B2C stands for Business to Consumer, B2B stands for Business
to Business, and B2C stands for Consumer to Consumer (B2C). B2C has become more popular in the
main cities of Bangladesh. Eighty percent of all customers come from only three major cities: Dhaka,
Chittagong, and Gazipur. Dhaka has the highest percentage of customers (35%), followed by Chittagong
(29%), and Gazipur (15%). (e-CAB 2018). According to the UNCTAD B2C (business to consumer) e-
commerce Index, Bangladesh is one of the top 10 countries in terms of the disparity between the expected
and actual contribution of internet users making purchases online (UNCTAD 2016).

According to a research released by a news paper in November 2017, the e-commerce industry is pre-
dicted to increase by 70%, and the market size is anticipated at $110–115 million, compared to 2016's
$67–70 million, while approximately 0.7% over all purchasing in the country is conducted online. (new-
agebd 2017) Sales are increasing as the market expands rapidly. Recent research found that the present
e-commerce market size is between $230 and 240 million, with a yearly growth of 45–50% (Karim &
Qi 2018, 211). Goldman Sachs predicts that by 2020, Bangladesh's e-commerce business will be worth
$20 billion (newagebd, 2017). If the present trend continues, the projection may come true, and maybe
even be exceeded. While metropolitan areas have traditionally been the primary source of visitors to e-
commerce sites, several of these companies have lately expanded their operations into rural areas as
 6

well. A previous president of e-CAB, Razib Ahmed, told a news agency that the reaction has been quite
positive, and that "customers from rural regions are also acquiring big quantities of merchandise," which
is a novel phenomenon for this kind of company (Muhammad 2018). One of the most serious issues for
online retailers in Bangladesh is delivery time lag. A few product delivery firms took the initiative after
seeing this and built their own warehouses to enable certain businesses to make deliveries more quickly.
(newagebd 2017)

There has been a large increase in the number of websites dedicated to consumer-to-consumer (C2C)
transactions, which is indicative of the general growth of the e-commerce industry. The success of eBay
has inspired several sites to implement similar features. They are online marketplaces that focus on pri-
vate sales and bids. Recent mergers in the consumer-to-consumer (C2C) sector include Telenor Group's
acquisition of CellBazar and Ekhanei.com's purchase of PlayeOLX. (trade.gov 2022) The term "busi-
ness-to-business" refers to the concept whereby a company's trade and other commercial activity is con-
ducted through the internet with other businesses or trading partners. As a rule, B2B companies focus
on manufacturing and supplying chain services. The bangladesh garment manufacturers employee asso-
ciation (BGMEA), for instance, has implemented B2B e-commerce solutions for international RMG
purchases and procurement. Bangladesh Company Guide, Addressbazaar, and Bizbangladesh are a few
further sites that provide access to business directories, trade transactions, and supplier information.
(trade.gov 2022)

2.4 Information Quality of the websites

The quality of a company's website has a considerable impact on whether consumers embrace e-com-
merce as a viable choice for making online transactions. According to the findings of the study, assessing
customer views about the credibility and reliability of a website is based on the quality of the website
itself. (Corbitt 2003) Therefore, providing information that is reliable and up-to-date, as well as products
and their descriptions that are aesthetically appealing will encourage more people to use e-commerce.
E-commerce is preferred by customers because of its numerous advantages, which include its conven-
ience, flexibility, and efficiency. (AlGhamdi 2011)

A high-quality website accelerates the purchasing process while improving clients' perceptions of the
service's value, providing them with more information from which to choose. This finding will have a
beneficial effect on the overall adoption of online shopping. Consumers' perceptions of an e-commerce
channel's ease of use are based on a number of factors, including the simplicity with which they can
 7

access the internet, utilize the site's navigation and search features, and get the information they need
(Chaffey 2009). Consumers are more likely to use new technology if it is easy to use (Tan & Teo 2000).
This idea is also supported by the TAM model, whose element titled "ease of use" has a high correlation
with adoption (Wu and Chen 2016).

2.4.1 Online Purchase Intention

Online purchase intention is a person's desire to make a purchase that is shown on websites (Chen, Hsu
& Lin 2010, 1007-1014). Since the theory of reasoned action (TRA) regards intention as a predictor of
conduct, the theory of online buying intention may similarly serve as an indication of consumer online
shopping behavior (Ajzen & Fishbein 1980). Marketing professionals may better understand customer
buying behavior by being aware of the factors that influence purchase intention. For many years, aca-
demics have prioritized the investigation of additional characteristics that influence purchase intention.
An important factor is the marketing part of running an online business. An e-commerce website won't
be able to draw enough clients to the online business without proper marketing. It implies that a company
can't generate enough revenue to support profits for the company. Professionals must thus strengthen
their sales and marketing infrastructure. (Wilson & Abel 2002)

On the marketing front, e-commerce companies must think about the infrastructure to support various
channels, including paid advertising, social media, email, and search engines. To improve the appeal of
the online store to customers, the company could even need to completely pull down the current website.
Brand value should be widely stated above the page, and unwanted pop-ups should not appear. Social
proof needs to be visible on related products and website content. (Flora 2021) There are several strate-
gies for e-commerce marketing, which include attracting top-of-funnel traffic and converting it into sales
and new consumers. Business organizations can combine paid methods with non-paid strategies, from
concentrating on organic reach and SEO search engine optimization to employing Facebook or Google
advertisements to generate targeted traffic, all in an effort to determine which marketing mix converts
the most customers. (Hariandja & Afsari 2016)

Marketing strategies, however, are never static. Businesses that want to maximize their investment in
advertising and cut down on operational costs connected with non-paid growth initiatives such as SEO
must adapt as marketing strategies and marketplace analytics do. E-commerce companies must work
together to boost sales at their online businesses in an industry that is continuously evolving and getting
more competitive. (BigCommerce 2023) It applies to intentions to make purchases online as well. Trust
 8

has a key role in influencing online purchase intention since online purchases include a greater degree
of risk and uncertainty than purchases made in a traditional physical stores environment. (Ariffin, Mohan
& Goh 2018) This was further supported by a researcher who analyzed young Malaysian consumers and
found that online trust is strongly linked with the intention to make an online purchase (Nathan 2019,
chapter 9, 463-483). Another factor that is often mentioned in discussions of online shopping intentions
is the role that technology plays. Technology and trust views have a considerable impact on online pur-
chase intention, according to a new research by. (Ye 2019, 1-10)

2.4.2 E-commerce risks

Even though there are many convincing reasons for starting an online company, it is of the utmost im-
portance to be aware of the potential risks that customers could face. One of the most significant dangers
that firms face while engaging in online business is the compromise of their information security.
(Chellappa and Pavlou 2002) Recently, there has been a rise in the number of cyberattacks. During these
hacks, the target may have their credit card details and other sensitive customer data stolen. In conse-
quence, this will have an effect on the reputation of the company. (Banham 2017, 75) When choosing a
website to do their shopping on, customers take into consideration how private their information will be.
As a consequence of this, it is of the utmost need to think of certain security practices that will reduce
the likelihood of an attack.

This may be accomplished by installing the most current version of the e-commerce platform and using
software developed by a third party to maintain the safety of the server that is used to host the e-com-
merce website (Vamsi and Jain 2021, 4861-4873). The technology that is used by online shopping
websites also represents a potential threat. For instance, there may be a problem with the server that is
responsible for hosting the website. As a direct consequence of this, clients will be unable to access the
website any longer. To lessen the impact of this risk, it is important to select a hosting service that has a
solid reputation and is capable of ensuring that the website will be secure the majority of the time. (Vis-
ually 2016).
 9

3 CROSS-BORDER E-COMMERCE

Bangladesh's Leading Industry rank has always been poor; in 2021, it was ranked 168th out of 190
countries (Business Post 2022). In addition to encouraging foreign investment and trade, the authorities
must provide a business-friendly environment with very few obstacles. E-commerce is the current trend,
and although this movement is popular inside the country, the border areas possess the essential infra-
structure and security precautions for e-commerce. Border region business include deals with India, and
the establishment of a reliable e-commerce infrastructure may reduce oddities such as laundering money.
Experts believe that it is important to prepare a time-appropriate cross-border digital policy or change
the current relevant rules. According to media sources, several e-commerce platforms participate in
cross-border trade, even though in the lack of a formal guideline, there is always the risk of these plat-
forms engaging in shady activities. (Business Post 2022)

Traders have also advocated for a modification of the current import regulation to accommodate online
based platforms and ease payments to overseas vendors for low-priced goods imported for personal use
by consumers. Although cross-border e-commerce is being hailed as a game-changer, there are concerns
that, owing to the low demand for Bangladeshi goods in India, it may not prove to be a trade facilitator.
(ESCAP 2021) The proposed "poor demand" may be attributable to the lack of an effective digital mar-
keting strategy. Digital marketing is a crucial pillar of e-commerce that generates demand through a
captivating online marketing campaign. Since 2014, twenty organizations have spearheaded the change
of the nation's digital economy. (Business Post 2022)

Unlike conventional marketing, digital marketing incorporates techniques aimed to engage customers
and promote brand-related discourse across several digital channels. The expansion of the digital mar-
keting business is mostly attributable to the surge in mobile transactions. According to available statis-
tics, In terms of smartphone users, Bangladesh has ranks 20th worldwide (newzoo.com). Therefore, the
government must investigate a cross-border partnership with mobile carriers for an Indo-Bangla digital
marketing campaign that would include items from both countries, according to a recent analysis by the
Asian Development Bank (ADB 2022). Micro, small, and medium business (CMSME) sector, the e-
commerce industry would treble in size by 2023, according to the research, the local e-commerce indus-
try is predicted to reach $3 billion next year up from the present $2.32 billion. (The Financial Express
2020)
 10

There are around 2,500 e-commerce businesses and at least 50,000 company pages on Facebook in
Bangladesh (Banga & Mendez-Parra 2021). If Facebook is added to the equation to enable Bangladesh’s
items to be shown on Indian websites, cross-border trade would be boosted. According to the editorial
of a large English-language newspaper, the present market worth of the sector is $2.32 billion and is
expected to reach $3 billion by 2023 (The Daily Star 2019). Nonetheless, the editorial emphasizes the
necessity for a rigorous structure to avoid exploitation. In recent years, some unethical e-commerce en-
terprises have undermined customer faith. Beginning with a policy that addresses digital advertising,
country-to-country agreements, and the free flow of information between India and Bangladesh would
be the appropriate political approach. In order to make the most of cross-border e-commerce, merchants
who want to do business ethically must also be trained in technology. The government should consider
establishing an e-commerce support center at each land port. It is important to prepare a time-appropriate
cross-border digital policy or change the current relevant rules. Border region business include dealings
with India, and the establishment of a dependable e-commerce infrastructure may reduce anomalies such
as money laundering. (Business Post 2022)

3.1 Legal guidance

E-commerce and online marketplaces in Bangladesh got their beginnings with an alleged legal structure.
Bangladesh passed the Information and Communication Technology (ICT) Act of 2006 in order to ease
e-commerce and promote the development of information technology. The 2013 amendments to the Act
contained provisions for jail and monetary penalties for cybercriminals but Copyright, trademark, and
electronic information and data patent rights are not explicitly addressed in the Act. (Rahman 2019) The
fact that the legislation does not apply to crimes committed on cell phones is one of the most unexpected
aspects of the law. Also, this law said that emails could be used as proof, which is against the evidence
Act of the country, which says that emails can not be used as proof. (Rahman 2019)

A fake online store can trick a customer by sending them an email with a fake money receipt and giving
them customer service by using a fake sim card. People from diverse nations, like Bangladesh was de-
pending on internet purchases during pandemics like the Covid-19, however a substantial part of the
customers were disappointed with the services. Online business has been associated with several reports
of contracts for the sale of items being broken. These contract violations are causing problems for both
buyers and sellers, which leads to a lot of payment irregularities around the nation. (Kabir 2022)
 11

As a result, the government needs to setup a digital payment infrastructure, with a personal user profile
and the usage of various social media tools on sites like Facebook, WhatsApp, Instagram, and others,
anyone may launch their own online businesses. (Kabir 2022) For instance, on Facebook, individual
merchants use groups and pages to advertise their products and solicit sales from followers or group
members. Additionally, Facebook pges are becoming increasingly popular in contrast to individual pro-
files or any other online business platforms because of sophisticated features that make it easier for
customers and sellers to locate one another. (The Daily Star 2021) Bangladesh's current legal system for
purchaching goods does not recognize such internet transactions as contracts for the sale of commodi-
ties. For instance, the nation is governed by “the Sale of Goods Act” 1930 which governs the area of law
pertaining to sale transactions (SGA Act 1930).

The legislation is naturally out of date and hasn't been updated to meet the present period; it's been
mostly replaced by other special laws. Ironically, there is no legal guidance on internet offers, descrip-
tions, product samples, or comparable acceptance. (CRPA Act 2009) Another statutory legislation was
passed specifically to defend consumer rights. The Director General was given responsibility under the
act CRPA 2009 to accept and handle consumer complaints. (CRPA Act 2009) Undoubtedly, the author-
ity receives a large number of complaints. However, the complainant has a low chance of receiving a
settlement when dealing with consumer complaints from online purchases. It has been noted that adding
the word "online service" to section 45 of the act CRPA 2009 would facilitate it for the relevant author-
ities to respond to complaints resulting from e-commerce. The government should establish a compre-
hensive policy framework for controlling e-business and preserving the rights of e-contracting parties.
Ecommerce platforms and government authorities should work together to protect online businesses
data. Online shoppers should be warned about making purchases from shady websites due to the risk of
being duped or having their items misrepresented. (The Daily Star 2019)

3.2 Major challenges

Online sales in Bangadesh are expected to hit $3 billion by 2023 (The Daily Star 2019). Additionally,
Bangladesh will enter the middle-income category at the same time. People who have more money to
spend on lifestyle necessities like clothing and food tend to do so. The rise of mobile banking apps and
faster internet speeds in the suburbs have both contributed to the meteoric rise of online shopping in
recent years. (Newagebd 2021) International online business was boosted by national and regional lock-
downs caused by the Covid pandemic. Consumers have the option of shopping for basic goods, as well
 12

as traditional and nontraditional items and services, without ever leaving the comfort of their own homes,
thanks to the success of innovative businesses that listen to their customers and deliver what they want.
(Newagebd 2021) Better numbers than in past years, a lot of progress has been made in this area over
the last decade because of some improvements in infrastructure and technology, but it still lags far behind
that of the regional competition (Hossin, Sarker, Xiaohua and Frimpong 2018). However the economy
has been doing well and growing at pace. Lower client adoption may be attributed to operational re-
straints, cultural factors, and a lack of digital knowledge. Even though Bangladesh has a well-developed
road and rail network, we still need a reliable distribution system. (Newagebd 2021)

Same-day or quick delivery services are limited in Dhaka and a few other big cities. The country has a
few conventional courier delivery services, and recent app-based delivery service providers could help
a speedy delivery. (Zaman & Tasnim 2021) Bangladesh’s e-commerce sector needs a strong and de-
pendable delivery route even though the nation is small and the distance between Dhaka and other cities
are shorter than in many western countries distance between the cities. The last stretch of a supply chain
is known as the "last mile," and it begins at the distribution center and ends at the consumer's front door.
A lot of effort has to be done to create a fully digital workforce and a reliable, widespread courier service.
(The Business Standard. 2022)

Other countries are actively researching how to use drones powered by artificial intelligence to provide
goods and services. To save costs, many firms use poor packaging materials, which causes damage to
the products that are delivered. (Mimi, Iqbal, Ray, Pareek, & Islam 2022) When it comes to dealing with
customers, Bangladesh is behind the times. Many people who run online stores or sell things on Face-
book don't really produce or run their own goods (The Daily Star 2019). These sellers acquire products
from a different wholesaler or a local merchant and then resell them online for a profit. Although this is
a brilliant business tactic, it adds time to the process since sellers must wait for the products to be sourced
before sending them to e-commerce hubs. (The Daily Star 2019)

Customers are cautious of online purchases because of the lack of reliability in on-time delivery. Online
vendors and shopping portals are unreliable for customers. Development in that field is thus slowed. A
few online retailers have been dishonest regarding estimated delivery times. Moreover, progress is
slowed by most consumers' lack of digital knowledge and experience. A significant issue is the lack of
digital literacy despite the fact that high English skills are required to make purchases or use apps or
websites. It's especially tough in underdeveloped regions or out in the countryside. (The Daily Star 2019)
Expectations for legislative changes to address these issues and slow growth are fair. It will take time
 13

for both buyers and sellers to learn the standards of doing business via the Internet. Both domestic and
foreign giants are keeping an eye on the developing Bangladeshi market. The policy framework must
ensure the safety of customers and promote trust. Services that aid in the growth of local industries
should be provided by local companies. (Hossen Uddin & Hossain 2014)

3.2.1 Lack of technological knowledge

For the effective adoption of E-commerce, the structure of information systems must be accessible and
affordable. For both consumers and sellers to enjoy the most advantages of the E-commerce channel,
they must participate adequately. According to prior studies, the pace of internet distribution and use of
the internet for online purchasing is a significant predictor of e-commerce success (Elahi & Has-
sanzabedh 2009). Internet accessibility and price are serious barriers affecting e-commerce in Bangla-
desh. In emerging nations, the cost of labor is generally cheap, but the cost of technology and other
business expenditures is relatively high. Expensive internet connection costs, weak internet connection
speeds, and wireless internet all contribute to the delayed adoption of e-commerce by businesses and
consumers. (Strauss and Frost, 2012) The general population's computer literacy also affects the pro-
gression of e-commerce adoption in this country.

The fact that most computer software and websites are written in English additionally inhibits the use of
these internet channels in developing nations, where the majority of the population has a limited com-
mand of the English language (Kshetri 2007). E-commerce platforms have concerns with scalability and
technical progress in rural regions. In 2020, just 36% of rural Bangladeshi people used the internet.
Around 54% of individuals do not use the internet because the lack of technological knowledge. (The
Daily Star 2020) The percentage of rural families without access to a smartphone is 59 percent, while
the percentage of rural households without access to a computer is 49 percent (The Daily Star 2020). In
remote locations, delivery demand is relatively low. Every small town has lots of food shops, so it is
easier to go and purchase directly than wait for delivery. Rural shoppers use cash at local shops but not
online. E-commerce enterprises thrive in metropolitan regions, but rural areas must be developed to
maximize the sector's potential. (Islam & Eva 2019)

On the other hand another obstacle is lack of knowledge of using ATM, According to latest estimates,
Bangladesh has a total population of 164.7 million people. (Worldometer 2020). Only around 19.99
million people use debit cards and 1.62 million people use credit cards, although many individuals have
 14

access to debit cards, but just approximately 1% actually use them to make payments online (The Finan-
cial Express 2020). They are solely used by the remaining individuals to make withdrawals from ATMs.
The main reason people resort to ATMs is because they only use debit card to collect the cash through
the machine. Plus, there is a shortage of customer-centric facilities. For this reason, it is crucial that this
thesis produces a number of relevant challenges whose patterns are based on the mentality and culture
of Bangladesh in the running of e-commerce. (Islam Kumar & Biswas 2007, 7)

3.2.2 Payment Issues

The retail business of e-commerce is weak due to the low level of financial inclusion in Bangladesh. The
majority of consumers prefer paying with cash upon delivery since credit card use is still relatively low.
(LightCastle 2022) Customers who reside outside of the big cities are not likely to benefit from the cash-
on-delivery option provided by the majority of online retailers. The upshot of this is that the imbalance
that was shown previously becomes more pronounced. The growth of MFS has introduced a degree of
predictability into the previously chaotic financial environment in Bangladesh. This was not the case
before MFS's arrival on the scene. Mobile Financial Services (MFS) usage in Bangladesh has skyrock-
eted to remarkable heights as a result of the pandemic in order to facilitate financial transactions that call
for digital payments. (Yan, Siddik, Akter & Dong 2021) The Microfinance and Financial Services (MFS)
sector in Bangladesh, which is being led by BKash, is demonstrating a solution to the problem of finan-
cial inclusion that the e-commerce industry is facing (Yesmin, Paul & Uddin 2019, 25-48).

The majority of Bangladesh's e-commerce sites are using the (MFS) system by Bkash as a transaction
option and substituting credit and debit cards (Ahmed 2021). However, BKash has its own records of
fraudulent occurrences (Kumar 2022). In Bangladesh, people are hesitant to do financial transactions
through technological gadgets. When customers want to purchase anything online, they must be assured
of the seller. In developing countries, money transaction systems offer strong online verification sys-
tems, and e-commerce sites give correct details and information, including business IDs, in order to keep
customers' faith. Despite all of the security protocols implemented by both sides, too many crimes still
happen. Bangladesh's situation is the exact opposite, and it hasn't even come close to gaining the trust of
consumers. (Kumar 2022) It hasn't been able to come up with reliable security measures to help the e-
commerce sector grow.
 15

3.2.3 Trust issues

One of the biggest reasons people don't purchase online is supposedly a lack of trust (Lee & Turban
2001). Trust is stated to be difficult to understand since it involves not just faith in businesses but also
in the technology that facilitates such businesses, such as online shopping carts. Over the years, academ-
ics have defined trust from a variety of theoretical perspectives, including personality theory, sociology,
and economics, it is essential to analyze all of these facets in order to grasp the whole effect of trust.
Customers in developing nations like Bangladesh are less likely to purchase online owing to a lack of
faith in the safety of their financial information and a preference for hands-on product examination at
local shops. This is because of the fact that many customers are unsure about the reliability of internet
retailers. This is due to the many scams and frauds that have been reported. (Peiris Kulkarni & Mawatha
2015)

According to the minister of commerce, the e-commerce sector would be subject to laws in the future to
monitor the business in considering the recent fraudulent incidents ( Dhaka Tribune 2021). According
to a recent discussion on the e-commerce business and its updated policy, there is an urgent need to
develop a legislative framework consisting of a distinct regulatory agency and a central complaint cell
in order to assure responsibility and trustworthiness. Moreover, existing legislation, such as the Digital
Security Act and the Money Laundering Act, will be changed to combat fraudulent e-commerce plat-
forms. Considering the inherent risks and unknown factors of online purchases, trust is particularly im-
portant here. Customers gain trust in online retailers based on many factors, including the firm's reputa-
tion, compassion, and good intention regarding consumers. (Peiris, Kulkarni & Mawatha 2015)

3.2.4 Financial Security

A major weakness of online shopping, according to a research, shoppers' worries about their personal
information being stolen, the research divided people's worries about online safety into two camps, those
who are wary of doing business with an unknown vendor, and those who are hesitant to give out private
financial information (Bert Rosenbloom 2004). One of the most significant issues with E-commerce is
security lapses. When dealing with e-commerce, a lot of information is involved, and a technical data
problem may seriously harm the retailer's ongoing business operations and brand reputation. As a result,
people are more inclined to buy popular brands while shopping online. Furthermore, in Asian countries
like Bangladesh COD (cash on delivery) or ordering products online and then paying through retail
 16

outlets or mobile banking like BKash is more common than it is in Western countries where credit or
debit cards are the more preferred form of transaction facilitating online shopping. (Yesmin, Paul &
Uddin 2019)

This trend is especially prevalent in Bangladesh because of the general population's lack of faith in the
safety of conducting financial transactions online. Similar features among customers were also seen in
China, Taiwan, and Mexico, all of which have been linked to slower adoption of e-commerce as Bang-
ladesh. (Gibbs 2003) Therefore, the lack of credit card users and the weak financial institutions in these
nations are slowing the spread of e-commerce (Kshetri 2007). The adoption choice of a company is also
obviously influenced by this. It has been shown time and time again by a wide range of studies, and
there is simply no other way to allay shoppers' concerns and increase E- commerce's popularity. (Alam
2004; Alam 2011).

3.2.5 Poor warehouse and disparity of locations

The operation of e-commerce enterprises that rely on central warehouses may be very difficult in places
that have a high population density. It is common knowledge that the traffic in Bangladesh's capital city
Dhaka is among the worst in the world. The World Bank estimates that the average speed of traffic in
Dhaka is 7 kilometers per hour which is just slightly faster than the average walking speed. (Haider
2019) In such difficult terrain, it is an extremely difficult challenge to deliver the items as promised. In
order to find solutions to these issues, new businesses are developing innovative models, such as the one
used by Chaldal's MicroWarehouse to provide a better experience for their customers, rather of having
a single large warehouse, they are using a number of smaller warehouses that are located across the city.
( Shu 2021)

On the other hand, there is a significant geographic difference. Semi-urban and rural regions have es-
sentially been ignored as e-commerce enterprises have grown mostly in metropolitan areas. 80% of
online buyers, according to e-CAB, come from Gazipur, Chattogram, and Dhaka, the bigger cities in
Bangladesh. (Hasan 2020) This disparity suggests that there are untapped opportunities to be seized all
over the country. However, the market participants are unable to make use of them because of infra-
structure restrictions. Urban areas are having challenges to oporate e-commerce business, in that case it
 17

is difficult to say anything about the rural areas at the moment. E-commerce business owners need to
think of the rural areas as well.

3.3 E-commerce shoppers on the mobile phone

Recent research conducted by the GSM Association, a trade organization representing the interests of
global MNOs, revealed that Bangladeshi smartphone users are among the least likely in the Asia-Pacific
to purchase online (11%), behind even Pakistan (21%) and tying with Myanmar (11%) (Jubayer 2019).
The survey categories smartphone users in Asia Pacific into three groups: monthly shoppers, less regular
consumers, and those who never used cellphones for online shopping. Overall, South Korea ranks high-
est with a record 87% of consumers using a smartphone for online buying ,while Bangladesh and Myan-
mar score lowest with just 11% of smartphone users engaging in online shopping. (Jubayer 2019) Bang-
ladesh's neighbor country India is approximately five times ahead in this regard. In India 28% of female
smartphone users indulge in internet shopping (futurestartup.com 2019). The smartphone penetration
rate in Bangladesh is 30.4% of the entire population of 171.19M (newzoo.com 2022).

Considering smartphone users who purchase online, barely 2,9 million individuals engage in online
shopping, with only 1,6 million doing so regularly. Nearly 23.9 million smartphone users do not pur-
chase online (BTRC 2009). The total number of active internet users reached 96 million, of whom
90,409,000 were mobile internet users. That is, more than half of the population has access to mobile
internet. (Trade.gov 2022). According to a GSMA research, the reasons for this stunning and quick
growth include the doubling of upload speeds, the almost halving of mobile latencies, and the tripling of
international bandwidth per user. Despite having a mobile internet penetration rate of more than 50 per-
cent and being the fifth biggest mobile market in Asia-Pacific, the fact that just 11 percent of online
buyers use smartphones is somewhat ironic. E-commerce is a recent phenomenon for a country like
Bangladesh, consumers are not used to it yet. E-commerce business offers clients a technological buying
environment, but it requires them to adapt their purchase behavior through gadgets like mobile andcom-
puter, which is a hefty order, at least in the beginning several e-commerce businesses and projects, such
as Deligram and Ekshop, are attempting to solve this behavioral difficulty via different strategies. (fu-
turestartup.com 2019)
 18

3.4 E-commerce Scandal In Bangladesh

E-commerce use in Bangladesh is quickly rising, with over 100 million individuals currently using mo-
bile phone and 6.5 million people using Internet (Khan 2018). The ability to make purchases is growing,
and more individuals are swiftly adopting new technologies in order to shift their activities online. En-
trepreneurs now have more possibilities because of the digital revolution, and consumers now have more
access. But there is much more work to be done. In order to win the trust and confidence of the customers
as e-commerce develops in Bangladesh, it needs to provide a solid foundation of infrastructure, a sup-
portive governmental climate, and a sustainable ecology. The e-commerce industry in Bangladesh has
experienced a rise in fraudulent practices over the last several years, as well as the development of un-
sustainable business models. Several e-commerce platforms, such as Evaly, Dhamaka Shopping, and
Alesha Mart, have attracted shoppers with the promise of hugely profitable discounts. While these plat-
forms are funded by advanced deposits from buyers and credit from suppliers, they don't raise much
capital from investors. In order to accommodate their rapidly expanding user bases, e-commerce plat-
forms throughout the world seek long-term funding from institutional investors such as investment firms,
but some Bangladeshi platforms were unable to get funding along such methods, instead relying on
short-term borrowing to expand. (The Business Standard 2021)

Evaly, Dhamaka Shopping, Alesha Mart, and a few other new platforms have clearly broken the laws
and rules, including the Payment Systems Guidelines of Bangladesh Bank, by using a digital payment
wallet that isn't licensed or regulated. The companies were receiving deposits from the general public,
producing new money and providing cashback balances to the previous customers or giving discounts,
and controlling the velocity of money by choosing when and how those cashback balances may be used.
They operated as banks and financial entities without government interference, invoking the role of the
central bank. (The Business Standard 2021) In such schemes, clients are drawn in with the promise of a
good return, and the returns are financed by funds gathered from another group with the promise of an
even higher gain.

The business process was the typical MLM model. The MLM mode has occurred with at least one of
these e-commerce platforms, Dhamaka Shopping, which according to news sources, officials accuse of
laundering taka 1.16 billion. (Apparel Resources News-Desk 2021) The money never existed, although
it is math. The company's net debts, including client and customer dues, equal its loss. The firm explained
losses and the money they have used for giving substantial discounts, high wages, sports franchise spon-
sorship and media purchasing. A recent inquiry by the Bangladesh Bank revealed that e-commerce firm
 19

Evaly had liabilities of more than $4 billion and had not cooperated completely with the investigation's
information demands. (Mirdha 2021) According to investigations, Evaly misrepresented a conversion of
supplier credit into stock as capital. Evaly has launched attractive deals and collected advance money
with the promise of 10-day delivery but has failed to deliver. The Commerce Ministry's Digital Com-
merce Directive and Bangladesh Bank's Escrow Policy were well-intended. However, there are several
laws that must be evaluated to ensure not to stifle the industry's progress. Responsible customers must
act. This is not only the duty of the authorities. Suppliers, payment aggregators, and payment service
providers must simply stop accepting payments into the platforms in allegation. Payment service pro-
viders, logistical service providers, and trade associations must suspend participation in these platforms
and create a strong market warning. The media must perform honest journalism by alerting the people
to discontinue stealing. As a consequence, there was widespread customer mistrust. Regular e-commerce
platforms like Ajkerdeal saw their sales plummet while sites like Evaly, Dhamaka, and E-orange all the
mentioned e-commerce firms operated some type of Ponzi scam lured temporary clients with enticing
offers. (Dhaka tribune 2021) As a result, the expanding client base no longer trusts these e-commerce
giants as much as it once did.
 20

4 RESEARCH METHODOLOGY

The thesis's research is written using qualitative methodologies. Qualitative research seeks to address
questions such as "why" and "how," in addition to acquiring information that is more specific and com-
prehensive. Finding the best research approaches to address the study questions and goals comes after
defining the research design. (Saunders, Lewis & Thornhill 2009) To do this, it is essential to choose a
study subject that is pertinent to the nature and setting of the research.

Generally, qualitative research gathers and evaluates information using phrases rather than statistics.
Qualitative researchers are curious about how individuals interpret their experiences, shape their envi-
ronments, and assign definition to their perceptions. The aim of qualitative research, according to Mer-
riam and Tisdell, is "process, knowledge, and meaning; the researcher is the primary instrument of data
collection and analysis; the process is inductive, and the outcome is deeply descriptive" (Merriam 2015,
15). At its core, understanding the phenomena of interest from the viewpoint of participants as opposed
to the researcher.

The research work uses a semi-structured, in-depth interview. Six randomly selected Bangladeshi e-
commerce consumers were interviewed in depth. To do this, it is essential to select the topic responder
that is important to the type and context of the inquiry. The author used a variety of social media e-
commerce channels to seek for and contact the respondents. The respondents are frequent users of Bang-
ladesh's small, medium, and large-sized e-commerce sites. Six respondents responded to the questions
based on from the findings of theoretical research data colletion process which relate to the thesis topic.
To be more precise the respondents were asked the questions over a zoom call. The questions are found
in the appendix of this thesis and chapter 5 in table of content explains the respondents' responses. Both
qualitative research and interviews provide the audience with a more genuine perspective. The inter-
viewees' own interpretations of events provide the foundation for the conceptual and theoretical infor-
mation that qualitative research aims to add to reality. Since it encourages the interviewer to use various
questions for different participants according to the circumstances, qualitative interviews are preferred
because they enable intense discussion between the interviewer and respondents.

The author used only reliable sources for the theoretical part, such as journal articles, books, and reports,
to gather the necessary data for theoretical debates on the study's concerns. This was done to claim that
the study's findings were compatible with things that were already established. The research applied an
 21

interpretive research methodology since it seeks to address the research topics not only theoretically but
also practically via conversations with and interviews of actual people involved in the field of study.

The interviews were done from 21st of February 2023 till 28th of February 2023. The procedure for
gathering and evaluating relevant data in order to determine the accurate responses to the study questions
was detailed, facilitating other academics' formation of an opinion. The interviewees were fully informed
about the author's intentions for carrying out the research as well as their contributions to its success in
order to prevent any misunderstandings. The result of the interview questions was given to the inter-
viewees in order to ensure the authenticity of the data gathered. It is undeniable that there are flaws that
detract from the reliability of the gathered data.

When discussing research quality, the ideas of reliability and validity are key. Both quantitative and
qualitative research methodologies may be evaluated using these instruments to determine quality and
standards. Validity is the correctness of the assessment, whereas reliability is the stability of the meas-
urement. (Vu 2021)

While conducting qualitative research, consistency is one aspect of dependability. Reliability may also
be thought of as a test result for a certain demographic group of data. In addition to consistency, many
more tactics may be used to promote reliability in observations and interviews of as a test result for a
certain demographic group of data. In addition to consistency, many more tactics may be used to promote
reliability in observations and interviews. The goal is to conduct the interviews and compile the findings
so that accuracy can be attained and better results can be presented. (Vu 2021)

In order to get precise and certain conclusions, the validity measure must be accurate to a level that is
remarkably similar to that of the tests or interviews that were conducted. Validity measurement tech-
niques must be ensured using extensive results and subject-matter expertise. The interviews and sam-
pling technique were tied to a particular subject or area of research. The remaining variables remained
constant throughout the data collection process to provide fair and pertinent results that support the in-
terview results. (Brink 1993)
 22

5 INTERVIEWS WITH THE RESPONDENTS

The respondents' interviews were obtained over a Zoom call, and they were effectively conducted. Re-
spondents were chosen from a variety of occupations and age groups. The interviews were completed
from 21st of February 2023 till 28th of February 2023. Although a few differences were discovered, the
majority of the answers are mostly similar. The respondents were: Mrs.Hasna Basari the first respond-
ent, a housewife, the second respondent Mr.Debobroto Roy, a merchant, the third respondent Mr.Neaz
Morshed, a college student and the son of Mrs.Hasna Basari, the fourth respondent Mr.Md Shoaib Bin
Alam, a banker, the fifth respondent Mr.Abir, a teacher, and the last respondent number six Mr.Sha
Poran Sujon, a clothes shop manager.

By conducting an interview, The researcher was able to obtain insight into the present state of the e-
commerce industry and the challenges it faces in Bangladesh. The first query seeks a thorough under-
standing of the main causes of Bangladesh's e-commerce industry's slow growth. According to the re-
sponses gathered, all six respondents' responses about one particular matter were the same to the question
of what are the major factors behind the slow growth of e-commerce in Bangladesh. All of the inter-
viewees agreed that there are no strict regulations guiding e-commerce businesses in Bangladesh.

The first responder Mrs.Hasna Basari makes three to four purchases from Bangladesh's online market
every month. According to her, the financial security system, the high cost of internet access, and the
poor internet connection are the main reasons for Bangladesh's slow growth of e-commerce. People from
rural places are often outside of the internet's coverage, and the second and third respondents noted also
the same, respondent number five Mr.Abir added that digital marketing strategy is not appropriate to
attract the overseas market. (Interviewee 5.), along with the identical facts provided by the first respond-
ent Mrs.Hasna Basari said the product delivery system is quite inadequate. (Interviewee 1.)

The respondents claimed that despite the authority's lack of a solid legal framework, it continues to abide
by outdated consumer protection standards that do not correspond with online shoppers. the third re-
spondent Mr.Neaz Morshed mentiond about F-commerce (Facebook market) is easier than using e-
commerce, the reason behind choosing f-commerce was directly contacted with the seller and the check
the product before purchase. (Interviewee 3.) but the other five respondents stated a negative review of
choosing F-commerce. According to them f-commerce y using fake Facebook identities, merchants are
also defrauding customers.
 23

When it comes to utilizing debit or credit cards to make purchases, the respondents give their preferences
in response to question number five. As compared to debit or credit card payments, Mobile Financial
Services (MFS) is more widely used in Bangladesh. One respondent said it is unsafe to use a bank card
to buy goods from an online marketplace since there is a possibility of theft of money and hackers might
just steal the information. Another claim is that MFS is secure and simple to use for online shopping,
but the responder noted that it is not completely secure, despite being widely used by individuals at all
socioeconomic levels and receiving significant government protection for the people of Bangladesh.
Developers made MFS simple and easy to use by its design and quality in native language with English
language features; moreover, MFS allows anybody to register an account by providing the information
of their national ID.

Every interviewee who responded, highly valued MFS and respondents felt more positively about MFS
than they did about bank cards. The respondents claimed that obtaining a bank card in Bangladesh is
difficult. Out of the six respondents, only two are using debit cards with certain limitations on transac-
tions, and one respondent uses a credit card and the person is a banker. Despite the fact that “credit card
holders must notify their banks before making purchases from overseas e-commerce platforms”. (Inter-
viewee 4.) The respondents claimed that bank cards are still not suitable for everyone and that to be
eligible for one, a person must have a respectable income. One of the responders, a college student noted
that “because of not having a credit card, I had to request another person to order certain items for
me”. (Interviewee 3.)

Punctuality is essential in e-commerce businesses. Every respondent stated that e-commerce platforms
in Bangladesh fail to maintain timeliness; even in large cities, maintaining punctuality is difficult for e-
commerce companies. Only a small percentage of respondents claimed that food products were coming
on time, but all respondents agreed that other goods, such as clothing, jewelery, toys, kitchen equip-
ments, were frequently arriving late. Additionally, respondents said they received the wrong goods.
When asked whether the product images presented on the website and the actual items are the same or
not, all of the interviewees said that they do not always look the same; most of the time, they are similar
to the picture displayed on the website, but sometimes they are not.

According to two respondents, “e-commerce sites trick customers by modifying product images with
Photoshop tools and collecting images from the internet; in other cases, customers are not even sure if
they will get the item they ordered or not”. (Interviewee 2 & 6.) Five of the six respondents are frequent
consumers of DARAZ, a well-known e-commerce firm in Bangladesh, and the similarities between these
five respondents about DARAZ were that they trusted DARAZ more than other e-commerce platforms,
 24

and DARAZ is the sole e-commerce market in Bangladesh from which the majority of e-commerce users
are now shopping. As noted in the theoretical section of the thesis, a number of significant recent fraud
incidents having come up in Bangladesh were one of the reasons the respondents cited for losing faith
in e-commerce platforms. DARAZ is reliable and trustable according to the respondents.

The interviewees also stated that they would purchase goods from e-commerce platforms after the fraud-
ulent scam that occurred in Bangladesh, but their first priority would be DARAZ. “If I need to purchase
from other e-commerce platforms, it would be low-priced or inexpensive things; expensive goods would
be unsafe to purchase from a relatively new e-commerce platform or some older platforms as well since
they do not have a solid reputation like DARAZ does”. (Interviewee 1.) The respondents found it chal-
lenging to answer the question about the promising future of Bangladesh's e-commerce, but all of the
respondents agreed that there is hope for the industry in the near future if the government of Bangladesh
implements strict laws and guidelines to maintain the entire e-commerce industry in Bangladesh and if
the e-commerce firms adhere to the laws and also implement completely separate consumer rights for
the online shoppers. The supply chain system and internet coverage are currently insufficient for the
entire country, according to a few respondents. However, if business owners and the government can
work together to address these issues and manage this industry with sincere intentions, it may be possible
to make improvements in these areas and envision a bright future for Bangladesh's e-commerce sector.

The unpleasant aspects of the e-commerce system, such as poor internet connection, receiving the wrong
goods, arriving late, missing goods, and having fewer possibilities for getting a refund, were mostly
responsible for customer dissatisfaction. Unexpectedly, respondent number two claimed that DARAZ
offers a cash-on-delivery strategy that is convenient for the consumers. The cash-on-delivery method
removes the possibility for deception. These are the responses from the respondents, as expressed in
their own words. In essence, the respondent number one and five are making purchases from e-com-
merce websites at least twice or three times every month, respondent number two, three and four are
making purchases five to six times in a month, respondent number six is purchasing ten to twelve times
in a month, occasionally they make more purchases. The purpose of the interview was to learn more
about Bangladesh's actual e-commerce environment and consumer reactions in the online market. The
data gathering can assist prospective company owners who want to launch an e-commerce venture in
Bangladesh with making decisions after learning about the industry's flaws and consumers' perspectives.
 25

5.1 Data analysis

The researcher then gathered responses from the respondents, who are e-commerce customers in Bang-
ladesh, to discover more about the condition of the e-commerce business on the market. The researcher
received responses from the respondents in order to learn about the difficulties and obstacles facing
Bangladesh's e-commerce industry. The interview was intended to understand the actual state of e-com-
merce in Bangladesh.

According to the respondents, the financial security system is not up to the mark, the high cost of internet
access, and the poor internet connection are the main causes of the slow growth of E-commerce in Bang-
ladesh. The respondesnts mentioned, E-commerce services are not accessible in rural regions and the
product delivery system is not yet up to par and the digital marketing strategy is not appropriate to attract
the overseas market. Regarding the adoption's hurdles and roadblocks, the respondents stated that the
authority's lack of a solid legal framework is the major reason. All the collected data from the interview
is relating to the theoretical study done by the author. The information of the study can be found in
chapter 3, 3.1, 3.2 and 3.5.

The main objective of the third and fifth question was to learn more about the payment system. The
respondents preferred MFS (Mobile Financial Services) over credit or debit cards; chapter 5 describes
the topic in detail. The fourth query concerned the regularity of purchases made. The survey's findings
indicate that as respondents make frequent purchases, their replies were generally satisfied. The punctu-
ality of the products' arrival was the main concern of the sixth question. The comments were highly
erratic and strange, but it was evident from their collective meaning that the respondents were dissatis-
fied with the timeliness of e-commerce platforms in Bangladesh. The question number seven aimed to
find out more about the authenticity of the goods compared to the picture displayed by the e-commerce
websites. The findings indicate that the majority of the time, the product is precisely as it appears on the
webpages, although there are occasions where customers receive incorrect and lost items. The infor-
mation of the theoretical study gathered by the author can be found in chapters 3.2, 3.2., 3.2.2, 3.2.3 and
3.2.5.

The purpose of question number eight was to learn more about Bangladesh's e-commerce sector's bright
future. The answers to this question showed the respondents were doubtful about the future, nevertheless
they believed that if the main causes of the slow growth of e-commerce are addressed and the govern-
ment has to take proper responsibility of the industry, the business would have a promising future. In
 26

the light of recent scams, question number nine seeks to understand the purchasing habits of consumers
who order online. The theoretical chapter 3.4 provides a general description of the scandal. The re-
spondents said that although some trustworthy e-commerce platforms are still functioning correctly and
they would purchase from such platforms, physical stores will always take precedence over online stores.
The analysis of consumer dissatisfaction with e-commerce is the main objective of the last question. The
individuals who were interviewed shared personal experiences in addition to the data in "obstacles and
challenges." The logistics system also requires further improvements and the items packaging is subpar,
according to the respondents, the detailed information can be found in chapter 3.2.5. They also consider
the language barrier to be an unpleasant element which is mentioned in the chapter 3.2.1.

In summary, this section has shown that customers of Bangladesh's e-commerce are not entirely satisfied
with its capabilities. By reading through journals, media websites, research papers, and online platforms
on this specific topic, it is therefore possible to identify the parallels between both the theoretical ele-
ment and the empirical data. In particular, the data gathered through the interview relates to the theoret-
ical research on the obstacles to e-commerce adoption in Bangladesh. The theoretical references that
were requested to be reviewed in this section are making the analysis more effective and efficient, and
the author's study and the data gathering from interviews are comparable.

5.2 Discussion

Determining the obstacles and difficulties of e-commerce in Bangladesh is the purpose of this thesis. In
addition to the secondary data gathered from reliable sources, the study also included information from
the respondents gathered through interviews. The number of individuals using internet service needed
to increase, thus it was necessary to develop ways for more people in Bangladesh to either learn how to
make use of the internet or become knowledgeable of its usefulness. An increase in bank card issuance
became necessary for the e-commerce industry's development in order to boost the buying process. The
majority of this data was gathered from secondary sources on the difficulties faced by e-commerce busi-
nesses as well as Bangladesh’s customers who shop online.

The weaknesses and difficulties that e-commerce confronts have been examined in this study by com-
bining the data from the theoretical study with the data from the respondents. All commercial activity,
including e-commerce, must be able to monitor the key aspects of its usability, apply suitable procedures,
and have the purpose of satisfying the customer in order to achieve success. This is highly valued, and
 27

it is strongly recommended that e-commerce be able to properly enforce the standards within its opera-
tional management. A key component of using e-commerce is having an adequate understanding of
technology. The fact that only a limited part of the population is technologically literate has already been
cited. Using computers and accessing websites are prerequisites for using e-commerce.

Because the survey revealed that a sizable section of the population in the capital region was technolog-
ically literate, it can be claimed that there is still a need for utility in an application and that browsing
websites is still not very common among individuals in rural areas. Software systems also come with
significant investment and upkeep costs, as well as a lack of hardware skills for the e-commerce com-
panies, which are also having an impact on growing this industry. The discussion concluded that there
is a need for instructing business owners, making sure that websites and applications are developed at a
lower cost and with greater accessibility, and, most importantly, providing instruction that helps business
owners better understand the management procedure and the necessity of employing it.

The thesis highlighted a variety of issues, including obstacles with due process for cybersecurity threats,
data leaks due to theft and hacking of servers, and a lack of cultural acceptability. The thesis concluded
that the issues listed will be reduced as a result of technological advancement after outlining these chal-
lenges. The thesis also gathered data that showed how excessively expensive and sluggish internet con-
nections made it harder for the nation's traditional customers to adopt e-commerce. Due to recent fraud-
ulent activities, consumers cannot adequately trust the e-commerce business. Since consumers in the
predicted rural regions had concerns about how e-commerce functioned, the e-commerce businesses
should collaborate with their product delivery system and the logistic firms to expand the service all
throughout the nation. The e-commerce industry cannot rely just on big cities. In order to attract more
customers to transact with online stores, a reliable online payment system was also necessary. For the e-
commerce sector to thrive, consumers must have the ability to use bank cards.

An online authentication service is a great approach to winning their faith and may attract consumers by
assuring a safe payment method. As the shortcomings were resolved, it became vital to develop a number
of methods to ensure effective promotional techniques in order to spread awareness of the e-commerce
industry across the country. Moreover, mobile financial services were extensively used by people in
Bangladesh. As a result, although bank cards are necessary, they are still not widely used and difficult
to obtain. The survey revealed that although people understand the concept of e-commerce, they do not
take it as seriously as people in developed countries do. There are multiple barriers, however, and it
might take some time for improvements in the industry. As soon as possible, the government has to pay
 28

attention to Bangladesh's e-commerce sector. The e-commerce industry has a lot of potential to grow the
national economy.
 29

6 CONCLUSION

Bangladesh could be a promising market for e-commerce considering its status as a growing country.
Since e-commerce in Bangladesh benefits urban residents, it has not yet reached the countryside. The
development of e-commerce in Bangladesh should have a significant impact on how people live across
the country. Developing stable economic growth in this area means that Bangladesh's whole nation
may reap the benefits. In order to improve consumer engagement in online shopping, the causes of
customer uncertainty and risk must be found, understood, and ultimately eliminated. According to the
investigation, the majority of e-commerce businesses lack vital elements that might harm Bangladesh's
e-commerce sector's image among new entrepreneurs. Most of the criteria for running an internet busi-
ness were established in developed nations, but not effectively in Bangladesh.

The study also found that there is a need for high-quality services because Bangladesh is a developing
nation and a significant number of people still find it difficult to use the internet, especially in rural ar-
eas. With the widespread usage of e-commerce, business owners may anticipate an increase in earn-
ings and a rise in customer involvement. This would result in a higher standard of living. The study's
specific focus made it possible for the researcher to conduct the investigation using a qualitative meth-
odology. Secondary data was collected in various ways, as explained in the research methodology. The
interview questions were made to help the respondents provide the necessary information, and the in-
terview data was the primary source. The collection of data from Bangladesh was facilitated by the in-
terviewer. The research discovered that there's still plenty of work to be done in order to assure the ex-
pansion of e-commerce in Bangladesh. This was due to the numerous difficulties that Bangladeshi e-
commerce businesses were experiencing.

Nonetheless, the thesis looked at the obstacles facing Bangladesh's e-commerce and came to the con-
clusion that as soon as the solutions to the mentioned challenges are implemented, Bangladeshi e-com-
merce might grow in the future. The research discovered that there's still plenty of work to be done in
order to assure the expansion of e-commerce in Bangladesh. This was due to the numerous difficulties
that Bangladeshi e-commerce businesses were experiencing. Nonetheless, the thesis looked at the ob-
stacles facing Bangladesh's e-commerce and came to the conclusion that as soon as the solutions to the
mentioned challenges are implemented, Bangladeshi e-commerce might grow in the future. Nonethe-
less, it is still true that any researcher would benefit from focusing on a particular subject, particularly
if the subject is related to a particular problem facing a particular nation. Future researchers looking
 30

into Bangladesh's e-commerce may find conflicting information because the majority of the data was
collected online and the primary data was gathered via interviews based on the perceptions of the par-
ticipants. Yet, as investigated by the researchers' inquiry, this research indicates the challenges and ob-
stacles to the growth of e-commerce in Bangladesh.
 31

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APPENDIX
Research questions

Some additional questions have been added, but the focus will be on questions 1-5.

1. What are the major factors behind the slow growth of e-commerce in Bangladesh?
2. What are the obstacles and challenges to the adoption of e-commerce in Bangladesh?
3. What are the risks and difficulties associated with payment method? if any are identifiable?
4. How often do you make purchases via Bangladesh’s e-commerce market?
5. Do you prefer debit or credit card for purchasing?
6. Does the goods arrive punctually?
7. Are the products same to those displayed on the website?
8. Do you think Bangladesh's e-commerce industry has a promising future?
9. would you purchase goods from the Bangladeshi e-commerce market after getting to know about
a recently announced scandal?
10. Do you have any exprience with Bangladesh's unsatisfactory E-commerce system?