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Jagannath
University

Course Code: EMKT-6404.

Course Title: E-Marketing.
Content of Assignment: Impact of COVID-19 on E-commerce
sector in Bangladesh.

Submitted To:
Md. Al Amin
Lecturer
Department of Marketing
Jagannath University
Submitted By:
Name: Md Sawon Hossain
Id No: M19160204321
Batch: 16
Section: (A)
Date of Submission:10 Sep, 2020.

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Table of content
SL. No Title Page
1 Introduction 3

2 The market at a glance 3

3 Consumer Spending Pigeon-Holed 4

4 Too Much, Too Fast for Local Players 4-5

5 Necessity breeds Innovation and 6-7

Collaboration
6 Impact of ecommerce in Covid-19 7-9
7 Conclusion 9
8 References 10

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Introduction:
Today the greatest threat on the planet earth is the invasion by tiny Corona Virus disease
(COVID-19). Most people infected with the Covid-19 virus usually experience respiratory illness
and recover without requiring special and very advanced treatment. Older people and those
having medical problems like cardiovascular disease, diabetes, chronic respiratory disease and
cancer are more likely to develop serious illness.
In this pandemic situation millions of workers all over the world are facing bleak prospect of
losing their jobs. The E-commerce sector is also floating in the midst of the disaster. Entire
industries are struggling under the weight of demand downturn, labor shortages and inability to
maintain their supply chain processes.
E-Commerce can be defined as buying and selling of commodities or services through an
electronic medium. A distinction is sometimes made between e-commerce which is done through
business websites or mobile applications, and f-commerce, which uses Facebook as the platform
to facilitate sales.

The Market at a Glance:

The E-Commerce industry in Bangladesh began to flourish circa 2013 with the Bangladesh Bank
lifting its previously established restriction on international purchases via consumer credit cards.
In 2018, Alibaba, the China-based global e-commerce giant, acquired Daraz Group, one of the
leading e-commerce companies in Bangladesh, launched initially by Rocket Internet. It was a
strategic plan to open up South Asian Markets and cast an important limelight on the sector. 
While this was a huge boost to the growth of e-commerce, other factors also played a defining
role, such as the gradually improving access to the internet and rising smartphone usage across
households.

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Consumer Spending Pigeon-Holed:

The pandemic has caused a large surge of demand to wash over the e-commerce industry in a
way that it was, from a capacity standpoint, not equipped for.
The mandated lockdown and rampant fear of infection has changed consumer spending
patterns. Marginal Propensity to save has risen as households hold back on consumption on
luxuries and raise consumption for essentials.
An estimated increase of around 3-4 times of pre-pandemic orders for necessities and a sharp
decline in orders for luxuries has left businesses with the latter product portfolio to either adapt
and start offering groceries and essentials for sale, or suffer large losses from a lack of orders.
e-CAB spokespersons have raised concerns regarding this shift in the pattern of purchases,
stating that only around 100 websites are actively providing necessities online.

Too Much, Too Fast for Local Players:

Convenience in meeting orders in the time of the pandemic has become paramount for online
businesses as they experience rapid growth in the number of customers and orders.

However, this sudden scale-up has been met with a general lack of preparedness in terms of
capacity, mobility, and resources for these same companies as they struggle to capitalize on the

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demand surge.

Companies such as Chaldal.com, which are one of the larger B2C businesses specializing in

grocery delivery, have attempted to improve their own capacity significantly through the
employment of more delivery men. The average order size rose from an average of BDT 1300 to
BDT 3,750.  The company must now deal with over 5,000 orders a day and is unable to meet
them without slashing convenience and setting maximum order limits or lengthening delivery
times.
Such an upsurge also highlights the incommensurate supply in comparison to demand and it
makes the situation difficult for online businesses as they attempt supply-chain rearrangements in
crunch time.

3rd Party Logistics in Bangladesh who do not sell online groceries and essentials such as Paper
fly, despite being a market leader, have experienced a dramatic fall in orders in the ballpark of
90%. Labor shortages have risen up and workers have temporarily migrated out of Dhaka. 

Further constraints on deliverymen mobility have arisen due to the heavy scrutiny by law
enforcement that has directives as such. Order cancellation and delays are increasingly common
due to such stringent movement. In addition to this, worker safety and provision of proper masks,
PPEs and otherwise, have become added liabilities for businesses.

An e-CAB study involving 1,100 of its member companies, has determined a loss of BDT 666
crore directly to the industry as a whole, with a significant loss in f-commerce sales and sales for
businesses not involved in sale of necessities.  Therefore, it is important for the industry to avail
the stimulus package put forward by the government to cope, scale up and or innovate.

Necessity breeds Innovation and Collaboration:

The crisis has made way for businesses like AjkerDeal.com and PriyoShop.com who are e-
commerce giants, to diversify into the online groceries market, helping to secure employment for
their own workers and providing much-needed service for the community.

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The same type of diversification has been undertaken by companies such as Kotha who operate
through their mobile app and now provide essentials on the platform.

Bikroy.com, which is the largest online marketplace for C2C customers have introduced a

category called Essentials as they attempt to help local suppliers find markets.

Foodpanda, Uber Eats and Pathao which focused their core business on food delivery have also
joined the fray to scale up and deliver groceries, medicine, and other items to their customers
through listing suppliers of such products on their respective apps.

The crisis has spurred innovation in the e-commerce sector as well.

E-courier has spotted the vacuum in online grocery and introduced the first BOT-based
messenger shopping in the city. A BOT is a software application that runs automated tasks over
the internet and is such, capable of aiding customers with their shopping.

Hellotask Ltd, a supplier of cleaning and home-making services, have undertaken the ambitious
project of turning apartments’ basements into groceries where only dwellers of the apartments
will be the buyers. 

Pet Service platforms such as PoshaPets have switched to online services and are providing over-
the-internet veterinary services. 

While the crisis has sparked a skyrocket of demand for certain parts of Bangladesh e-commerce,
the industry as a whole is suffering along with most other industries. When the crisis eventually
subsides or is deemed to be in a controlled state, industries will reopen fully. This will mean that
while some consumers will revert back to traditional systems of shopping, the growth to the e-
commerce sector will normalize and sustain. After all, the core selling point of e-commerce will
always continue to be customer convenience.

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The stimulus package of Bangladesh is already working to mitigate damages and the way
forward for businesses will depend on capital availability and labor readiness. However, with
such major strides taken in terms of increase in volume of online shoppers, a post COVID-19
boom for the sector seems to be on the cards.

Impact of ecommerce in Covid-19:

Rise of e-commerce:
since people are locked up in their home, all activities including all business operations have
gone online. And quite naturally, at this stage, this shift is only going to continue. As a result, all
brick and mortar businesses are bound to shift their operation online. ‘‘We will see a rise of e-
commerce and online operation shift for the brick and mortar-based businesses. As a result, there
will be a rise of work in website design, e-commerce development and overall digital marketing
activities for SME’s, ‘‘says Mashfique khalid, managing director of Lie to Eye, and a leading
advertising agency of the country.
Rise of MarTech and AI: similarly, due to the increased technological dependency in the covid-
19 seized world, business owners are now realizing the potential of artificial intelligence and
machine learning even more. And in near future, this inclination will only go up. As explained
by mark anupom mollick, senior software engineer and business development coordinator at
code crafters international ltd. Leading software solutions firm. ‘‘in the post-pandemic world,
innovation and technology and artificial intelligence assisted advertising will be aggressively
pursued’’.

Reduction in revenue and cash flow:

revenues are being seriously affected simply because the number of clients has gone down
significantly. Restaurants, salons, boutiques, which used to do digital marketing previously, have
stopped doing so. As a result, the agencies simply don’t have a large enough clientele to serve in
the first place. A chief operational officer at a leading agency of the country explains, ‘‘revenue
has taken a huge toll. On an average, each agency is seeing a hit of around 30-40 percent of
revenue drop, be it from cancelled campaigns, from retail business closing down, or from
reduced client activities in general.’’ He also discussed another key reason why the numbers are

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being affected-‘‘unlike the agencies, many client companies don’t have the modern facilities in
place for their finance team to work effectively from home. As a result, the past dues are released
at a slower rate resulting in cash flow drop for the agencies’’.
What is concerning about this issue is that this phenomenon will lead to a lot of salary cuts,
layoffs, of furloughs in pretty much every agency since they simply won’t be able to support all
their employees amidst all these number cuts.

Reduction in marketing expenses: expanding on the preceding point, due to the cut
in revenue and to sustain profitability, the agencies will undoubtedly have to cut down of
expenses as well. And a fair portion of that cut will be made from their marketing expenses.
Mashfique Khalid explains: ‘‘the marketing expenses will be curtailed for the next fiscal year.
Due to the overall economic recession that the country is going to face, the digital brands are
likely to cut the budget down to mitigate the losses. Retainers and campaign budgets are likely to
be greatly affected by this. A ‘‘more for less’’ approach might set in.
Increase in productivity: even through initially there was hesitation as to the implementation of
work-from-home, surprisingly, remote working has been found to be raising productivity. In fact,
according to an article published in Bloomberg, the average working day has increased by two to
three hours worldwide. In addition, remote working day has successfully eliminated all the
distractions of workplace which has resulted in sharp increase of productivity.
Ahnaf zabee, a digital marketing expert at a multinational company of the country, explains,
‘‘previously we used to chat away with colleagues a lot, get distracted from time to time. But
now that we are working remotely, that doesn’t happen anymore. In addition, meetings are very
timely-there is no scope for late entry in video calls. So naturally, overall productivity has gone
up.’’

Continuation of work from home:

building up on the previous point, what this added productivity means for the future is that even
when the shutdown gets lifted, agencies will still continue to avail online tools to communicate,
collaborate and deliver their tasks from home. The hesitation to implement work from home that
was prevalent before is not going to be a concern anymore. Hence, agencies will not fail to
utilize this opportunity to maintain high productivity even when the pandemic is over.

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Conclusion:
In the post pandemic era, the marketing scenario is going to change; the big corporates will look
to boost their sales with push marketing, while the medium and small sized ones might reap the
benefits of digital marketing. One thing the pandemic period would have taught all the
organizations is that digital marketing is the future of marketing with increased usage of digital
platforms around the world. Therefore, for the remaining pandemic period, the digital marketing
agencies need to adjust themselves with the dynamics/limitations/opportunities of the existing
situation because failing to adjust with these alternations will only bring upon demise. So, it only
makes sense to plan ahead so that adapting to all these changes does not get overly stressful and
panic-including.

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References:
 1. Alibaba buys out Daraz from Rocket Internet – The Dhaka Tribune
 2. Global E-Commerce sales hit $25.6 trillion in 2018: UNCTAD – UNB.com
 3. Bangladeshis adopting e-commerce faster than ever amid pandemic – The Daily Star
 4. About e-CAB e-CAB – eCAB
 5. Online shopping of essentials soars as corona cases spike – UNB.com
 6. E-commerce suffers on supply crunch – The Financial Express
 7. What do consumers expect from brands? – Kantar Group
 8. Online grocers fail to seize the day during biggest opening yet – The Daily Star
 9. What does COVID-19 mean for angel investing in Bangladesh -The HiFi Public
 10. https://www.lightcastlebd.com/insights/2020/05/09/covid-19-impact-on-the-startups-
of-bangladesh
 11. https://thefinancialexpress.com.bd/education/how-covid-19-impacts-digital-
marketing-landscape-1589385334

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