Acknowledgement

First of all, I want to thank our honorable course instructor Dr. Deena Forkan for
assigning me the research paper to study on web-based businesses in Bangladesh.
That was an extensive project and her guideline in every stage of the project was
essential for success. I am really grateful to her that she could give me enough time to
respond to my queries in detail.

After that I want to thank Mr. Masud Zakaria, the Managing Director of
Softsubstation Ltd, a web-based company. It was wonderful to have a very interactive
interview session with him. He shared all his experience of being in the industry and

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his experiences added a lot of value to my study.

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Finally, I want to thank the local cyber café owner in my area, Mr. Jahid Imam for
helping me printing and sorting all the documents in a timely manner during the load-
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shading period.
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Web-based businesses in Bangladesh 1

Abstract

Encouraged by the worldwide boom of web-based businesses, a number of

Bangladeshi firms are joining the flow nowadays. But how much difference have they
been able to make? This research paper on web-based businesses in Bangladesh tries
to find the answer. As it is probably the first ever research on the issue in Bangladesh,
hardly even secondary data was available. Therefore, extensive survey questionnaire
was prepared to collect in-depth primary data directly from the big and small web-
based businesses in Bangladesh. The hypothesis of the research is that web-based

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Bangladeshi companies have not been profitable; however, the hypothesis is proven

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wrong at the end.

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Web-based businesses in Bangladesh 2

Table of Contents

Topic Page No.

Acknowledgement ii
Abstract iii
Table of Contents iv

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Web-based businesses in Bangladesh 3

Table of Contents

Topic Page No.

01 Introduction 1

02 Areas of research 2

03 Hypothesis 3

04 Methodology 4
4.1 Primary Data Collection 4
4.1 Secondary Data Collection 4

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05 Primary Data Presentation 5

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5.1 Data Table Presentation 5
5.2 Graphical Presentation SU 7

06 Limitations 23
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07 Conclusion 24
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08 Reference 25
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Appendix
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1. Proposal signed by instructor

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2. Questionnaire
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3. Survey request email

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Web-based businesses in Bangladesh 4

01. INTRODUCTION

I did not have to think twice when our course instructor, Dr. Deena Forkan asked us to
choose a research topic to meet the partial requirement of the Advanced English
Composition course. Straight away I decided to conduct a research on web-based
Bangladeshi businesses. I was really happy to get the approval from Dr. Forkan to
conduct the research on my desired topic. I was particularly excited with the fact that
finally I could share my experience of being in this sector as an online marketer as
well as a freelance writer.
The topic of my research is – Web-based Businesses in Bangladesh. I picked this
topic because in recent years developing countries like Bangladesh have witnessed a

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phenomenal growth in the technology-dependent communication medium, which is

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Internet. Internet is not used only to meet the users’ information needs, but also it is
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revolutionizing every aspects of business throughout the world. Traditional ‘Brick and
mortar’ companies are eventually turning into ‘Click and mortar’ or ‘click-only’ web-
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based companies. Although the quantity of business done through Internet is small, it
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is growing exponentially. Bangladeshi firms too offer web-based services such as

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web-development. online shopping, social networking, online information database,

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diverse freelance services etc.

The goal of this research is to show a complete picture of web-based Bangladeshi
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businesses’ current condition. In the process, the study will uncover insights of web-
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based business and Bangladesh government’s actions.

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Web-based businesses in Bangladesh 1

02. AREAS OF RESEARCH

Web-based business is an extensive theme to conduct a research. So it is really

important that I specify certain areas of web-based business in Bangladesh that I will
be covering in his research.

I have recognized following issues to investigate:

1. What are the businesses that Bangladeshi web-businesses are mostly
running? Is it the web development service (i.e. web design, hosting), or e-
commerce service, or serving directly via website (i.e. news website)?

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2. What are the main obstacles that the web-based businesses face while

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doing running web-based business? There are plenty of problems varying

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from technical aspects to laws and regulation etc. But I tried to identify which
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problems are most alarming and to what extent.
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3. How are the businesses surviving in the difficult situations? In spite of

loads of problems, web-based businesses are growing in number. That
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indicates that there must be some positive factors in running web-based

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businesses here. I have tried to look for those as well.

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4. What are the possible actions government can take to make the industry
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better? I have recognized issues where government lacks to support the

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industry and what are the major issues government needs to solve.
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Web-based businesses in Bangladesh 2

03. HYPOTHESIS
RESEARCH
Web-based businesses have been unprofitable for Bangladeshi firms. In spite of
having all the capabilities to be a profitable industry, the sector is failing because of
wide ranges of obstacles.

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Web-based businesses in Bangladesh 3

04. METHODOLOGY

This research is a very unique one and probably the first-ever research on the topic in
Bangladesh. So, the research mostly depends on primary data and some secondary
data.

4.1 Primary Data Collection

Primary data was collected through survey with a carefully prepared questionnaire. I

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sent emails to web-based businesses requesting them to take on the survey online.

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Manager/owner of 20 businesses responded to my request and participated
enthusiastically.
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After that, I took extensive interview of a business owner who has been in this
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industry for more than 6 years.

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4.2 Secondary Data Collection

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Relevant secondary data was not available anywhere for use.

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Web-based businesses in Bangladesh 4

05. Primary Data Presentation

5.1 Data Presentation

Option Option Option Option Option

Questions
#1 #2 #3 #4 #5
1. What type of web-based business
65% 30% 20% 25% 25%
are you running? *
2. How easy is it to start web-based
0% 55% 35% 10%
business in Bangladesh?
3. What's the major revenue source of
65% 20% 15% 0%

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your web-based business?

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4. How do you get job orders?* 55% 25% 40% 45%

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5. Bangladesh government does not
allow online transaction yet, how 0%
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25% 70% 5%
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does it affect your business?
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6. How does the slow internet speed

40% 60% 0% 0%
affect your business?
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7. How do existing Bangladeshi cyber

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50% 10% 0% 40%

laws help your business?
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8. In Bangladesh we don’t have any

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professional training/certification
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facility to become online marketing 70% 5% 25%

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expert. How does it affect your

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business?
9. What is the biggest obstacle you
5% 45% 20% 10% 10%
face to run your web-based business?
10. What are the advantages in
running web-based business in 65% 15% 20% 40%
Bangladesh?*

* Respondents may select more than one checkbox, so percentages may add up to
more than 100%.

Web-based businesses in Bangladesh 5

 Option Option Option Option Option
Questions
#1 #2 #3 #4 #5
11. How is the skill level of your
technical team [e.g. Web designer, 45% 45% 10% 0%
programmer]?
12. What is the major area of your
60% 20% 15% 5%
business expenditure?
13. What are the major considerations

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of your buyers when you deal 10% 30% 75% 45% 5%

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internationally? *

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15. What is your investment plan for
the next 2 years?
45% SU
40 % 10% 0% 5%
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* Respondents may select more than one checkbox, so percentages may add up to
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more than 100%.

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Web-based businesses in Bangladesh 6

5.2 Graphical Presentation

5.2.1. What type of web-based business are you running?

1. What type of web-based business are you running?

1. What type of web-based business are you running?
13
13

6
6 5 5
4 5 5
4

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My company/I My company/I  run E-commerce I'm a freelancer Other
My company/I My company/I  run E-commerce I'm a freelancer Other

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provide web serve people business [that [web
provide web serve people business [that [web
development directly via website involves online developer/freelance
development directly via website involves online developer/freelance
services [selling
services [selling
hosting, domain
hosting, domain
[Example:
[Example:
bdjobs.com,
bdjobs.com,
transactions] SU
transactions]
writer etc]
writer etc]
names, web design ClickBD.com]
names, web design ClickBD.com]
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etc]
etc]
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Note: Respondents could choose multiple answers for this question.

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This question basically categorizes the respondent types of this survey. Most of the
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respondents’ primary area of web-based business is providing web development

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services that include website design, domain name and hosting sales etc. Only 4
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companies out of the 20 companies actually run e-commerce website that involves
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online transactions. However, I have got 5 companies that work as freelancer along
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with providing regular services.

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Web-based businesses in Bangladesh 7

5.2.2. How easy is it to start web-based business in Bangladesh?

2. How easy is it to start web-based business in

Bangladesh?
Very easy for
anyone
It’s very difficult
0%
10%

Easy for those

who has some
background/exp
Not so easy

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erience with the
35%

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industry
55%

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More that one-half of the respondents believe that opening a web-based business is
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easy in Bangladesh only for those who have some previous experience or background
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in the sector. 10% people consider web-based business start-up as very difficult.
Quite expectedly, no one have said it an easy task.
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Web-based businesses in Bangladesh 8

5.2.3 What's the major re venue source of your web-based business?

3. What's the major revenue source of your web-

based business?

Advertisement
revenue
15%

Sales in local Sales to

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market clients

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20% worldwide
65%

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Although all the respondents firms are originated in Bangladesh, their major source of
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revenue for most of the firms (65%) is abroad. The reason is that Bangladeshi web
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developer firms are actively involved in getting offshore projects. Once a firm gets
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going, it does not have to depend on local market anymore.

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Only 20% firms generate majority of their revenue from local sales indicate the
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immature web industry and culture here in Bangladesh. Otherwise, there is no reason
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why firms cannot succeed in the local market whereas they are highly successful
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dealing globally. However, the demand of web technology is increasing rapidly in the
country.

Earning from website ads are possible only when there are large number of users to
follow. It is the most difficult among the three revenue-generating ways and 15% of
the firms here depends on advertisement-driven returns. However, it points out that
Bangladeshi firms have also started to join the global trend of website-generated
income that is, earning from showing ads in websites.

Web-based businesses in Bangladesh 9

5.2.4 How do you get job orders?

4. How do you get job orders?

Other 9

We get many of our jobs from

8
reference of previous buyers

We get job via freelance bidding

5
websites [example: Elance.com ]

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Mostly we get orders from local clients
11

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[as our target market is Bangladesh]

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2 4 6 8 10 12
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Note: Respondents could choose multiple answers for this question.

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11 out of 20 respondents report that mostly they get job orders from local clients as
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their target market is Bangladesh. This may somehow be confusing as firms have
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reported earlier that their major source of revenue is international market. Actually,
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both are right; being Bangladeshi firm, no firm tends to leave the local market even if
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it is successful internationally. That is why firms always take local market into count.
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Although the firms earn a lot providing outsourcing jobs, it is surprising that only
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one-fourths of the firms depend on freelance bidding sites which control world’s
outsourcing workflow.

However, reference from previous and existing buyers play a dominating role while
getting new jobs. Many of the respondents filled the ‘other’ option of the question
saying how many types of reference they use to get new jobs. References include
even NRBs and friends etc.

Web-based businesses in Bangladesh 10

5.2.5 Banglade sh governme nt does not allow online transactio n yet,
how does it affect your business?

5. Bangladesh government does not allow online transaction yet,

how does it affect your business?

Other
5%
It sometimes
affects me
It is a great 25%
problem for me
as I have to do
international

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transactions

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regularly [with

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clients]
70%
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Bangladesh Government does not allow online transaction yet. Without any confusion
what-so-ever, Bangladeshi web-based businesses have indicated it as the biggest
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problem they face. Almost all the respondents are affected by this obstacle while
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dealing internationally.
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Web-based businesses in Bangladesh 11

5.2.6 How does the slow inte rnet speed affect your business?

How does the slow internet speed affect your

business?
It significantly
It slows down
affects my
my working
business as
speed, but it's
my business
manageable
frequently
60%
requires big
file transfers
It doesn't
40%
It doesn't affect me that
affect me at much as most

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all of my work is

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0% offline

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0%
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40% of the businesses are significantly affected by slow internet speed here in
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Bangladesh. Web developer and software developer firms encounter this problem
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more often than the others.

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However, companies seem to cope up with the situation and 60% companies have
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reported that they somehow manage it, although the working speed gets sluggish.
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Web-based businesses in Bangladesh 12

5.2.7 How do existing Bangladeshi cyber laws he lp your business?

7. How do existing Bangladeshi cyber laws help your

business?
There are some
I have never heard
business laws
of any cyber laws
that we follow
in Bangladesh
indirectly
50%
40%

Bangladesh has
very strict
Bangladesh business and

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doesn't have any cyber laws that

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cyber law and I'm I/we always have
pleased that there

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to follow
is no law! 0%
10% SU
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The cyber law and online business law is totally absent in Bangladeshi web-based
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businesses.
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One-half of the firms have no clue of any cyber law’s existence in the country.
Although 40% firms say that they follow some business law indirectly, these firms
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meant to follow business law that has almost no relationship with any standard
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internet law.
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It is funny to have 2 firms saying that they are pleased with the fact that there is no
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law!
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Web-based businesses in Bangladesh 13

5.2.8 In Banglade sh we don’t have any pro fessional
training/certification facility to become online marke ting e xpe rt. How
does it affect your business?

8. In Bangladesh we don’t have any professional

training/certification facility to become online marketing
expert. How does it affect your business?

We don’t
depend on
online marketing
that much
5%
We train people

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on our own to

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market online
Lack of online

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70%
marketing
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draw back for
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us
25%
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Online marketing is one of the most crucial parts of web-based businesses’ success.
But the term, ‘online marketing’ is just about missing in Bangladesh. 25% of the
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respondents consider lack of online marketing expertise as a major drawback for their
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firms.
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However, businesses have found their own way to adjust to the situation. 70% f the
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businesses states that they train people on their own to market online.
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Web-based businesses in Bangladesh 14

5.2.9 What is the biggest obstacle you face to run your web-
based business?

9. What is the biggest obstacle you face to run your web-

based business?
9
9
8
7
6
5 4
4
3 2 2 2
2 1
1
0

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..
s
ed

O
ee

ro.
.
...
..

er.
al .
pe

tin
loy

op
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mm
on
ts

xis
p

ts
em
ati
ne

-co
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no
ern
ter

ee
of

is
in

/N
int

el

us

et
ted
or

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ev
in

ark
Po

ot
ill l

lica
y

nn

lm
ult

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Sk

mp

ca
fic

ca
Dif

Co

We

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When asked to indicate the biggest obstacle to run the web-based business, again
majority of the firms have indicated international money transaction difficulty as the
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most upsetting one.

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‘not-up-to-the-standard’ skill level of employees takes the place of second most

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significant for the businesses.

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Surprisingly, poor internet speed does not seem to upset the companies.

Web-based businesses in Bangladesh 15

5.2.10 What are the advantages in running web-based
business in Bangladesh?

10. What are the advantages in running web-

based business in Bangladesh?

15
13
10
8
5
4
3 0

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Big profit
Fine skill level

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Lack of margin from
Low cost of employees

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web/technical offhshore jobs
[salary, knowledge of
expenses etc] local customers
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-N
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Note: Respondents could choose multiple answers for this question.

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Low cost of running business is the biggest advantage of running web-based business
from Bangladesh – 13 out of 20 firms say that. It is the big profit margin from
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offshore jobs that is most encouraging for offshore web developer and software
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developer firms.
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Quite amusingly, 3 companies were honest enough to say that local customers’ poor
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technical and web related knowledge is an advantage for them!

Web-based businesses in Bangladesh 16

5.2.11 How is the skill le ve l of your technical team [e .g. Web
designer, programmer]?

11. How is the skill level of your technical team

[e.g. Web designer, programmer]?
Not as
expected Poor
10% 0%
Great! That's
why we get lots
of offshore jobs
45%

Pretty good,

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but not the best

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45%

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Again, offshore firms mostly count their technical teams’ expertise to be a big
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positive point to get outsourced jobs. 45% firms claim their technical skill level to be
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great and another 45% believes their teams are pretty good, if not the best.
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Web-based businesses in Bangladesh 17

5.2.12 What is the major are a of your business e xpe nditure?

12. What is the major area of your business expenditure?

Other 1

Marketing 3

Web hosting and

4
maintenance etc.

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Salary of technical 12

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team

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As most of the firms claim to have superior technical teams, they justify it by
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expending most of their budget on the salary of the technical team. 12 out of 20 firms
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spend most on salary.

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Astonishingly, only 3 firms reports their main area of expenditure is marketing.

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Web-based businesses in Bangladesh 18

5.2.13 What are the major considerations o f your buyers when you
deal internationally?

13. What are the major considerations of your buyers when you deal
internationally?

Bangladesh
1
government’s policy

Communication with
9
buyer

Previous work
15
experiences

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Company reputation 6

O
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I do not deal
2 SU
internationally
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Note: Respondents could choose multiple answers for this question.

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This question is from local firm’s viewpoint that what factors influence international
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clients while outsourcing projects from Bangladeshi firms. 15 firms report that it is
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the previous work experience and references that influence most.

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Maintaining constant communication with the buyer is rated to be a factor by 9 firms.

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However, Bangladesh Government’s policy is not taken into count by the buyers –
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survey indicates.
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Web-based businesses in Bangladesh 19

5.2.14 What is your/your firm’s monthly profit?

14. What is your/your firm’s monthly profit?

I can't say for
Less than TK
sure; it’s very
15,000
inconsistent.
10%
20%
We never made
profit
0% TK 15,000 – TK
40,000
15%
More than TK

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100,000

O
15%

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TK 40,000 - TK More than TK
100,000 40,000
15%
SU 25%
-N

This was one of the most important survey questions to discover the actual states of
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the web-based Bangladeshi businesses. When asked the firm’s monthly profit, none of
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the firms have said that they are in loss.

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Significantly, there are no dominating segments in the pie chart; that shows that the
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profit margin of firms are varying widely ranging from profit under TK 15,000 to
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profit over TK 100,000.

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Anyway, 20% firms say that their profit has been very inconsistent.
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Web-based businesses in Bangladesh 20

5.2.15 What is your investment plan for the next 2 years?

15. What is your investment plan for the next 2

years?

We plan to go in
the same pace We want to shut
10% down
0%
Other
5%

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We plan to

O
invest more as
we feel

.C
investing more
may make SU
consistent profit We’re going to
-N
for us [We’re not invest more as
making we’re making
:E

consistent profit good profit

right now]
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45%
40%
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This question asking web-based firms about their strategy in coming 2 years discloses
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the fact that they actually consider the industry as a place to make good money.
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Almost one-half of the responding firms are satisfied with their current growth and
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intend to invest more.

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However, 40% firms still believes that they are struggling a bit now to make good
profit; but more investment are likely to bring the fortune for them.

Notably, no firms plan to get out of business.

Web-based businesses in Bangladesh 21

5.2.16 Ove rall how is the e ase of running web- base d business he re
in Bangladesh?

16. Overall, how is the ease of running web-based

business here in Bangladesh?
5 5
5

4
3
3
2
2
2

M
1 1 1

O
1

.C
0
0 SU
-N
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This was my last question to the survey participants. I requested them to rate the ease
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of doing business in a scale of 1 to 9. Here, rating 1 means the ease of running web-
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based business is extremely difficult while a score of 9 means it is pretty easy.

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Here I have got mixed response, however, dominate by mid-scores (5 and 6). It
indicates that the firms consider the ease of running web-based business in
Bangladesh moderately easy.

Web-based businesses in Bangladesh 22

06. LIMITATIONS

As there are no data available from secondary sources, the research depends entirely
on the survey responses. Here, I sent survey request through to 47 web-based
businesses among which only 20 responded. So, the sample size is pretty small,
although genuine. Because of the small sample size, there are chances that similar
research with larger sample size would alter some survey results such as average
profit earnings, intervening conditions etc.

In addition, surprisingly I got no secondary data from anywhere on trends or statistics

of the industry. So, I had to make a lot of logical estimations to reach decisions.

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Web-based businesses in Bangladesh 23

07. CONCLUSION

From the analysis it is clear that my hypothesis was wrong. In spite of so many
obstacles, Bangladeshi web-based businesses are actually making money. And with
some assistance from government, the sector can flourish incredibly.

Finally I want to conclude by recommending some immediate actions to government:

1. Government must introduce or validate online transaction system

immediately.

2. Government should take some action to take the internet speed to a standard
level so that Bangladeshi firms can become more competitive.

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3. Modern online business policies and laws must be passed and implemented.

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Web-based businesses in Bangladesh 24

08. REFERENCES
The reference list is empty as the research did not use any secondary data.

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Web-based businesses in Bangladesh 25