Table of Contents

Ecommerce .....................................................................................3
History of E-Commerce....................................................................3
Why e-Commerce for Bangladesh……………………………………………….4
Traditional and Electronics Business Transaction ............................5
Traditional Commerce vs e-Commerce............................................3
Dimensions of E-Commerce .............................................................6
Business to consumer(B2C) ..................................................7
Business to Business (B2B) ...................................................7
Business to Government(B2G) ..............................................7
Benefits of E-Commerce ...................................................................7
e-Commerce in Different Sector in Bangladesh ................................8
Overview of implementation stage of e-Commerce in Bangladesh 8
Some e-Commerce shop in Bangladesh ............................................9
The impact of e-Commerce ...............................................................9
Constraints to E-Commerce in Bangladesh......................................10
Challenges of E-commerce for Bangladesh......................................11
E-commerce
E-commerce refers to the buying and selling of products or services over electronic
systems through Internet and other computer networks. The most popular medium in
which e-Commerce is conducted is the internet. It combines a range of process such
as:
 Electronic Data Interchange (EDI)
 Electronic mail (E-mail)
 World Wide Web (WWW)
 Internet Applications
 Network Applications
It does not include transactions over telephone, fax or any payments made online for
transactions whose terms were negotiated offline or by physical means. Some common
applications related to electronic commerce are the following:
 Email
 Enterprise content management
 Instant messaging
 Newsgroups
 Online shopping and order tracking
 Online banking
 Online office suites
 Domestic and international payment systems
 Shopping cart software
 Teleconferencing
 Electronic tickets

History of E-Commerce
 In 1950‟s companies began to use computers to store and process internal
transaction records.
 By 1960‟s businesses that engaged large volume of transaction had began
exchanging transaction information on punched card.
 In 1968 Transportation Data Co-ordination Committee (TDCC ) was formed by
some companies.
 In 1979 ANSI (American National Standards Institute) chattered a new committee
to develop uniform EDI (Electron Data Interchange).
 In 1979: Online shopping was invented in the UK by Michael Aldrich.
 In 1982: Minitel was introduced nationwide in France by France Telecom and
used for online ordering.
 In 1984: World's first recorded B2C online home shopper. Mrs. Jane Snowball
uses the Gates head SIS/Tesco system to buy groceries.
  Why e-Commerce for Bangladesh
With the increasing diffusion of ICTs, more specifically the Internet, the global business
community is rapidly moving towards Business-to-Business(B2B) e-Commerce. The
buyers/ importers gain a clear advantage when the Internet gives them access to the
global market, by which they can compare prices across regions, find out whether
prices vary by order fragmentation, get awareness about substitute/ alternative
products. Consequently, the sellers/ exporters make sure that they are well portrayed in
the cyber world through websites and portals. Like buyers, sellers also benefit from
increased and more efficient access to the global market through the Internet.
Bangladesh is pursuing an economic policy of export-led growth. With the rising forces
of globalization, it is becoming increasingly important that the private sector, particularly
the export sectors are well prepared to meet the requirements and expectations of the
importers and also stand out in the competition against exporters in other countries.

Traditional and Electronics Business Transaction

The business processes are broadly divided into five main categories namely:
 Market product and services
 Sell and deliver products and services
 Process payments
 Manage relationship
 Manage the enterprise

Dimensions of E-Commerce
The three dimensions of e-commerce are:
 Business-to-Consumers (B2C)
 Business-to-Business (B2B)
 Business-to-Government (B2G)
 Consumer to consumer (C2C)
B2C e-commerce is unlikely to be of much use in the near future in Bangladesh
because of low per capita income, a weak infrastructural and legal environment, lack of
trust between business and consumers. B2C for cross border trade is also limited by the
factors suggested for the domestic front. In addition, non-availability of international
credit cards, foreign currency remittance restrictions, delays and informal payments at
customs clearance even for small value and quantity items will discourage B2C.

Business to Consumer (B2C)

Where enterprises sell directly to the customer, often cutting out wholesalers or retail
outlets. B2C is the most commonly understood form of internet business
www.muktobazaar.commost successful trading has been with standard products such
as CDs, Books, Software, downloadable music etc.

Business to Business (B2B)

It is larger, growing faster. This includes procurements of raw materials and supplies,
liaison with contractors, sales channels, servicing customers, collaborating with
partners, integrated management with data and knowledge.

Business to Government (B2G)

Here business trade directly with government offices and agencies for public
procurement (e.g. supplies for hospitals, school and other government contracts.

Consumer to consumer (C2C)

Online transaction between private individuals. There are many sites offering free
classifieds, auctions, and forums where individuals can buy and sell thanks to online
payment systems like PayPal where people can send and receive money online with
ease. eBay's auction service is a great example of where person-to-person transactions
take place everyday since 1995.
Benefits of E-Commerce
The benefits of e-Commerce are many and many. Some of them include:

E-Commerce in Different Sector in Bangladesh

Despite being a under developed country, selected segments of the Bangladeshi
business community has embraced technology with reasonable success. The Facsimile
in the 1980‟s and mobile telephones in the 1990‟spopularized modern technology in the
mass market. Personal computers and the Internet are also emerging as day-to-day
business tools. These positive indicators are favoring the prospects of e-commerce in
Bangladesh.
Overview of implementation stage of e-Commerce in Bangladesh
Ministry of Commerce, Ministry of Information and Communication and Planning
Commission jointly implementing the e-commerce in Bangladesh
 There is e-Commerce committee headed by commerce secretary
 Ministry of Information and Communication is working for enacting alaw
regarding “Electronic Transaction act”
 Online order from foreign buyer has started
 www.registrarofcompniesbangladesh.com here registration of jointstock company
started as online
 Online non-financial transaction has started by all bank from 31-7-2002
 Intra-bank transaction started from 31-7-2003
 Some bank already started credit card system in a limited way
 About 2 months Bangladesh Bank give permission of Ecommerce in local
currency through banks within the country.

Some e-Commerce shop in Bangladesh

www.webbangladesh.com
www.haatbazar.com
www.number1shop.com
www.bdbazar.com
www.bengalcommerce.com
www.sonarmarketplace.com
www.upoharbd.com
www.bdgift.com
www.cellbazaar.com
The impact of e-Commerce
E-commerce can transform the way products and services are created, sold and
delivered to the customers. It can also change the way in which the company works with
its partners. The followings are well established benefits of e-commerce:
 Improved productivity: Using e-commerce, the time required to create, transfer
and process a business transaction between trading partners is significantly
reduced. Furthermore human errors like duplication of records are largely
eliminated with the reduction of data entry and re-entry in the process. This
improvement in speed and accuracy plus the access to document and
information will result in increase in productivity.
 Cost savings: The cost savings stem from efficient communication, quicker
turnaround and closer access to market.
 Streamlined business process: Use of internet and with automation of business
process can make business more efficient
 Better Customer service: Customer can enjoy the convenience of shopping at
any hour and anywhere in the world.
 Opportunities for new business: Business over the internet have global customer
reach. There are endless possibilities for business to exploit and expand their
customer base.

Constraints to E-Commerce in Bangladesh

Out of 64 districts, Internet services are available only in 6 major district headquarters.
BTTB is planning to gradually roll out an IP network up to the64 district headquarters. In
January 2002, the Internet facilities were extended to 12 districts. The project is running
on very fast and today almost40 plus districts are getting Internet facilities. Followings
are the barriers of e-commerce in Bangladesh:
•Very minimum number of users of web sites;
•Poor telecommunication infrastructure with limited fixed-line access, unreliable
connectivity and low bandwidth (9K);
•High price of computer and hardware: The per capita income of our people is less than
US$520. But in order to buy a computer itis needed US$500 and for this reason, it is
beyond the capacity for a villager’s to buy it.
•Lack of technically efficient personnel;
•Lack of investment in hardware and software;
•The banking infrastructure in terms of electronic payments and inter-bank connectivity
is poor. As such, the customers of 5770branches of the local banks are unable to
operate their account with the other branches of the same bank. Inter bank transaction
is more cumbersome as the clearing-house of the central bank is not online. An inter-
bank transaction may take even 2 weeks if the branches are different cities. Only
branches of the private banks are interconnected with their respective head offices.
They are also satisfactorily computerized. This represents only 25% of the entire
banking sector.
•Small number of Credit Card users;
•Limitations of supportive legal system. Such as, exchange controls, protection of
telecommunication monopolies, restrictive trade practice and prohibitions;
•Absence of cyberlaw;
•People's mindset and very slow and expensive Internet services;
•Enterprise managers' lack of initiative and leadership in taking advantage of
ecommerce;

Challenges of E-commerce for Bangladesh

 Network Infrastructure
 Intra-bank and Inter-bank Connectivity
 Local and Global
 Bank-Client Connectivity
 Security of transaction
 Banking mechanism
 Automation
 Convertibility of the Bangladesh currency
 Retention quota
 International credit cards
 Capacity Building: Human, Technical and Regulatory
 Quick Settlement, Online credit Information, Skilled e-Manpower,
Regulatory Framework
  Investment
 Legal Infrastructure
 Currency Convertibility: Access to Global Finance
 E- Culture

Recommendations
The assessment of the e-commerce environmental forces of Bangladesh leave us
some room to recommend some steps and measures, that should be undertaken by the
policy makers and business stake holders for the full fledged implementation and
development of e-commerce in Bangladesh. The recommendations are:
 There should be an EFT (Electronic Fund Transfer) Gateway, which will connect
all finance and banking institutions, ATMs, POS and related websites. Such
Gateway will speed up the transactions among banks, commercial institutions.
This sort of infrastructure needs to be implemented on priority basis.
 A CCG (Credit Card Gateway) should be established. A credit card gateway is a
server that makes online credit card transactions safe(Skinner, 2005). The
software protocols in the CCG use the information provided to check for
availability of funds and to make sure the credit card is not expired, lost or stolen.
This takes only seconds. When the transaction is approved a receipt is
generated for the customer, and the funds are transferred to the vendor's bank
account through EFT.
 Unlicensed radio frequencies should be made available on demand and VSAT
operating licenses should not limit the bandwidth.
 To improve banking mechanism, Bangladesh government should compel the
banking sectors to automate their operation and going online by a specific period.
The control of foreign exchange should be liberalized gradually, and easier
issuance of International Credit Cards should be allowed, banks should take
effective steps here.
 Business associations and organizations should be made aware of the benefits
of e-commerce. Business organizations like FBCCI, DCCI, MCCI, and BGMEA
can play a significant role in promoting e-commerce in Bangladesh.
 Political commitment to improve governance and institutional strength is essential
for successful application of e-commerce.
 Last but not least, National ICT policy, 2002 and enactment of the ICT Act, 2005
is required to enhance the implementation of e-commerce.

CONCLUSION
A key reason why e-commerce, especially the business-to-business segment, is
growing so quickly is its significant impact on costs associated with inventories, sales
execution, procurement, intangibles like banking, and distribution costs. If these
reductions become pervasive, e-commerce has the potential to be the application that
ushers in the large productivity gains .Achieving these gains is therefore contingent on a
number of factors, including access to e-commerce systems and the needed skills.
However, what is unique about ecommerce over the Internet and the efficiency gains is
that it promises the premium placed on openness. To reap the potential cost savings
fully, firms must be willing to open up their internal systems to suppliers and customers.
This raises policy issues concerning security and potential anti competitive effects as
firms integrate their operations more closely.

REFERENCES
http://www.manufacturingnews.com/news/editorials/cohen.html
http://www.businessweek.com/the_thread/economicsunbound/archives/2008/06/the_im
portance.html
http://www.med.govt.nz/templates/MultipageDocumentPage____16344.aspx
http://www.cid.harvard.edu/cidtrade/issues/ecommerce.html
http://en.wikipedia.org/wiki/Ecommerce
http://www.google.com.bd/