The ongoing COVID-19 pandemic is impacting every aspect of life – from the places we can go to, to the way we spend our time and money, and to the priorities we have. Similarly, this has wide-ranging ramifications for most businesses including those operating in retail and e-commerce domains.
Globally famous as an apparel manufacturing hub, Bangladesh has a promising and vibrant retail sector including e-commerce as well. However, ever since the outbreak of the dreaded virus in China, those into e-commerce have been anticipating business losses. Dependent on China for the supply of a host of products that they sell on their respective websites, supply chain disruption emerged as a major worry for them as businesses and manufacturing took a backseat in China, which got busy tackling the menace of the coronavirus epidemic.
“The situation seems grave, as our products sold on e-commerce platforms are mainly sourced from China. Their holiday has been extended. If the deadly coronavirus outbreak persists and spreads further, local e-commerce business will be in dire crisis,” Mohammad Sahab Uddin, Vice President of E-Commerce Association of Bangladesh (E-CAB), expressed fear in February this year.
That was around a couple of months back. Fast forward to April when COVID-19 has crossed the borders of China and taken almost the entire world into its grip, including Bangladesh. On that note, let’s understand the current state of affairs in Bangladesh as far as e-commerce is concerned.
Even though things are slowly but surely showing signs of improvement in China, the situation is worsening in a host of other nations across the globe. As per the industry insiders, online orders have declined drastically since the first positive coronavirus case in Bangladesh was detected. With little signs of things abetting anytime soon, many retailers are lowering their sales forecasts for the current year and changed their 2020 outlook from a positive to a negative one as they expect the sales and revenue to take a tumble.
Even though online platforms selling daily essentials and health products such as masks and sanitisers have seen a spike in their sales as has been a trend even globally, those into fashion in particular have taken a significant hit.
“A number of companies that import products from China, the epicentre of the coronavirus outbreak, have faced a severe disruption of the supply chain. A few essential products are being sold through e-commerce, but fashion forward products have totally stopped. We are going to face losses due to coronavirus.” – Fahim Mashroor, CEO, AjkerDeal.com
Established in September 2011, AjkerDeal.com is the largest online shopping site in Bangladesh that caters to a wide range of consumers in diverse product categories, all available under a single umbrella.
If the supply chain disruption that has dealt a severe blow to imports from China was not enough, the current shutdown imposed by the authorities in view of the rising number of COVID-19 cases in the country has emerged as another major issue to deal with.
“We had postponed all our B2C activities till April 4. But this has been extended till April 11 now, as the Government has extended the lockdown till that period,” underlined Asif Ahnaf, CEO, Aponzone.com, further sharing, “The situation is deteriorating every day. We don’t know what lies ahead of us. But it’s certain that we will incur huge losses due to the pandemic.”
As per the latest available reports, the countrywide shutdown has further been extended from April 11 to April 14 now.
“The companies that sell essential goods and medicines are running their operations. Their sales are shooting up as the demand is growing. A2i, post offices, and law enforcers are helping them deliver their products timely. The selling of consumer products, fashion forward products, and IT-related services has almost collapsed. Outsourcing has also collapsed as the recipient countries are in big trouble due to COVID-19. Besides, as per Government directives, most of our companies have stopped operations due to a shortage of delivery personnel.” – Mohammad Sahab Uddin, President, E-Commerce Association of Bangladesh (E-CAB)
The shortage of delivery personnel it seems is getting acute with each passing day, as fear of getting infected by the virus is keeping most delivery agents who deliver goods to the doors of the consumers away from work. The shortage of delivery people has also slowed down the delivery process further.
“Approximately 80 per cent of our delivery people are now off-duty. This has happened because most of them left Dhaka following the recent Government holidays forced by the coronavirus outbreak,” averred Sazzadul Islam Fahmy, Chairman of E-CAB, adding, “Moreover, others are not willing to work because they are afraid that they might get infected with the deadly virus. Even their families are discouraging them to continue working as this job requires one to be outside all day and have a lot of human interaction.”
Hussain M Elius, CEO of ride-sharing and delivery services provider Pathao, also shared, “Some of the customers who have ordered online are not getting their products delivered on time, as there are not enough resources for smooth operations of the home delivery service.”
Echoing the same, Md Abdul Wahed Tomal, General Secretary of E-CAB, said, “We have instructed e-commerce owners to give protective gear such as masks and gloves to their delivery people so that they can remain uninfected from COVID-19. The sale of products other than groceries, medicines and daily essentials has plummeted drastically. Some e-commerce companies were even forced to stop their operations.”
The shutdown, therefore, could turn out be a body blow for most Bangladeshi online retailers who are already sitting on massive losses. Despite the tepid business, these companies will still have to bear the usual costs such as employee salaries and office rentals. Companies with deep-pocketed parent entities and diversified businesses, though, stand a chance to come out somewhat unscathed from this precarious situation. The same, however, could not be said about the smaller players for whom this could be the death knell until and unless they take some drastic steps, which could entail cutting down on manpower even in an effort to keep afloat.
“As the situation is worsening, a number of e-commerce companies may have to take harsh decisions like job cuts and total shutdown,” cautioned Fahim.
Even though the Government has come up with a stimulus package of around Taka 50 billion for the export-oriented sectors to help them pay the workers’ wages, there’s hardly anything for the retail sector as yet, stated many.
Given the situation at hand, those into e-commerce sector are heading for tough times in the days to come, feel many operating in the country’s virtual market place.