If the Coronavirus pandemic has brought many a sector to their knees, be it retail or apparel manufacturing, e-commerce in particular is an exception. Contrary to what the others had to undergo, e-commerce has witnessed a significant growth during the pandemic as consumers moved online (to digital platforms) to fulfil all their requirements. The convenience of being able to shop for most products from the comfort of one’s home was a key driving force behind the massive growth in online retail platforms.
Besides, online platforms also make it possible for people to avoid the risk of infection since the goods are delivered to doorstep, usually by independent logistics aggregators even though some of the entities have their very own delivery services.
This led to a 50 per cent spike in home deliveries amid the pandemic, even as according to industry insiders, Bangladesh’s e-commerce sector has grown by an average of 70 per cent in last one year.
Presenting the various aspects of e-commerce and e-commerce association of Bangladesh (e-Cab) at a press conference,Finance Secretary of e-Cab,Mohammad Abdul Haque Anu said, “In the last eight months of 2020, transactions of Taka 3,000 crore have been made in daily commodities alone. At present, more than 160,000 deliveries are being made every day. While e-commerce grew usually by 25 per cent in previous years, its growth was 60 per cent to 70 per cent last year; there has also been a 300 per cent growth in the sector, especially in the commodities and food business.”
As one would have expected in the given scenario, logistics companies that cater to online businesses in the country (Bangladesh) have also prospered tremendously during the pandemic even as the Chief Executive Officer of AjkerDeal (an e-commerce platform) AKM Fahim on his part maintained, “Logistics companies related to online sales have huge potential in Bangladesh as e-commerce currently accounts for just one per cent of the total retail sales…That is why many new players are coming into the business while existing players are ramping up their capacities.”
What’s more, even as fresh pandemic cases are surging again, many retailers including those into fashion are not only arming themselves with better automation for online sales, many are also building their own delivery mechanisms or partnering with logistic aggregators, to boost sales. The strategy of lifestyle brand Sara, in this regard, is worth emulating as it has built a new unit to cater to online orders.
“Now we can deliver products through our own arrangement in Dhaka city,” said SM Khaled, Managing Director of Sara Lifestyle, adding, “We have built a small but efficient team with IT experts, technicians and a fleet of delivery personnel so that we can deliver our product to customers in the capital in the shortest possible time.”
The brand’s customers can also order clothes from anywhere in the country as district-level deliveries are being made through partner logistic companies.
It may be mentioned here that e-commerce platform Evaly which launched e-logistics in April last year, is now making 15,000 deliveries, as per Md Gahidul Islam, Head of e-logistics and Senior Manager at Evaly even as Delivery Tiger added a new dimension to the country’s e-commerce logistics market by providing wholesale logistics services for logistics platforms that provide retail and last-mile deliveries.
Building personal delivery mechanisms for e-commerce platforms has become a global trend lately. For example, Amazon (an American multinational technology company) handles its own deliveries while in Bangladesh, Chaldal, launched in 2013 as the pioneer online retail platform, making over 5,000 deliveries per day all over Dhaka and its adjacent areas, including Narayanganj, with its own delivery mechanism.
Daraz, the country’s e-commerce market leader, is also expanding its logistics footprints even as a part of its vision is to create a better e-commerce ecosystem and build a countrywide logistics infrastructure. Daraz announced its plans in June last year to invest Taka 500 crore by 2021 to set up logistics infrastructure that would help expand its reach to all the districts in the country while a big chunk of that investment has reportedly already been utilised for different purposes, including the purchase of more than 100 vehicles, facilitating the shipment of products across the country through its own conveyances.
Now we are equipped with the logistic infrastructure that Alibaba uses, underlined SyedMostahidal Hoq, Managing Director of Daraz Bangladesh, which is owned by China’s e-commerce behemoth Alibaba.
Given the immense prospects in logistics, Indian end-to-end e-commerce logistics solution provider Ecom Express — Ecom Express covers the majority of states in India, delivering more than 5 lakh products per day — in January, acquired a majority stake in Bangladesh’s home delivery service provider Paperfly for around Taka 100 crore even as for Ecom Express, entering Bangladesh was its maiden venture outside India.
“…with the expertise of Ecom, we are now working on expanding our operations in the country,” underlined the Co-founder and Chief Marketing Officer at Paperfly,Rahath Ahmed, who went on to add the main challenge for the growth of e-commerce in Bangladesh, and subsequently, logistics, lies in creating a broad range of sellers. “In Bangladesh, when it comes to getting delivery orders from e-commerce platforms, we find most of the sellers are located in the capital. E-commerce logistics will get a shot in the arm if we can create millions of sellers outside Dhaka,” added Rahath.
It may be mentioned here that before the pandemic, Paperfly made more than 9,000 deliveries per day even if the number fell to 10 per cent in the beginning of the nationwide lockdown to curb the spread of COVID-19 last year, but the scenario started to change for the better after the Government eased restrictions at the beginning of June with latest available information pointing Paperfly making around 15,000 deliveries across all 64 districts, with 90 per cent of the shipments bound for destinations outside Dhaka even as the company has set its foot in almost every union in Bangladesh and made 48 lakh deliveries since its inception in February 2016.
Bangladesh is not a big country, so bringing down the delivery time to 24 hours anywhere in Bangladesh is our next goal, added Paperfly in a statement even as Hussain M Elius, CEO of Pathao — Pathao, well-known for its ride-sharing business, was initially launched as an e-courier platform back in 2015 — on his part maintained, “In the last few years, logistics services have boomed.”
However, Hussain also pointed out two significant challenges towards expanding the platform’s operations: the first is the cash-on-delivery (COD) option, and the second is lower orders in some areas as he said that in some cases, customers who order products with the cash-on-delivery mechanism at times refuse to accept the product and on account of the same, many suffer loss.
Digitalisation in every step, from placing orders to making payments, is essential for an effective logistics service, Elius further explained even as Biplob Ghosh Rahul, CEO of eCourier (a logistics provider) maintained that for local logistics companies, there is a need to enhance automation and efficiency.
According to some reports, the Coronavirus pandemic has been a boon for the Dhaka-centric company, eCourier, as the number of daily deliveries soared to 8,000 in June last year, up from 5,000 in the pre-pandemic era even as eCourier now makes over 3 lakh delivery per month, around 90 per cent of inside Dhaka while the company has also completed around 46 lakh deliveries since it was launched in 2014.
The firm recently launched a few new services, including air parcel, line haul, corporate delivery, merchant delivery, person-to-person (P2P) delivery and warehouse services.
However, industry insiders believe the charges for logistics facilities are much higher in Bangladesh compared to other countries, which is detrimental to the growth of the country’s e-commerce industry. “If a customer outside Dhaka orders a Taka 300 shirt, he often has to spend Taka 140-150 on logistics. So, it will have to be reduced a lot more,” explained Ajker Deal’s Mashroor on the existing scenario and emphasised building private-public partnerships in this regard.
There are more than 9,000 post offices in the country; if they have an agreement with logistics platforms, then logistics services can be provided across the country for a far lower cost, Mashroor added further while stating that the global trend is that customers spend only 5 per cent of a product’s value on logistics, whereas it is about 20 per cent in Bangladesh.
Meanwhile, even as Bangladesh has recently imposed a nationwide seven-day lockdown to prevent further spreading Coronavirus cases that has resurfaced strongly of late, the Government has allowed the delivery of e-commerce products between 6:00 am to 12:00 am. To this end, the Commerce Ministry has sent a letter to all Divisional Commissioners, Metropolitan Police Commissioners, Deputy Commissioners and Superintendents of Police to take necessary actions.
Reports said that organisations will have to provide identity cards and necessary documents to their respective deliverymen and the vehicles involved in transportation even as the deliverymen and vehicles meant for the e-commerce delivery will have to carry stickers or identity card with the logo and serial number of e-Commerce Association of Bangladesh.
Meanwhile, participating at a recent virtual event, e-Cab President Shomi Kaiser said, “Prime Minister Sheikh Hasina has advised the public to shop online to prevent COVID-19 infection. As we know, during the lockdown last year, the Government took a quick decision and directed to keep the daily commodities active through e-commerce in compliance with the health regulations. In the current situation, the deadline for e-commerce delivery has already been extended from 6 pm to 12 midnight through an application from e-Cab.”
Given the existing scenario, one could only assume that in the days to come, even as e-commerce is set for further growth, logistics service providers consequently are also in for further growth and development.