In the rapidly-evolving virtual retail landscape of Bangladesh, Facebook commerce is coming up very strongly, adding a new dimension to it.
Sample this: As per Statista, in 2020, Facebook’s subscriber base in Bangladesh was 39 million even as other reports suggest capital city Dhaka alone has over 22 million Facebook users while the F-commerce market size in the country is approximately around Taka 312 crore. Further, 50 per cent of Facebook stores are owned by females and Facebook page owners are able to earn anywhere between Taka 10,000 to Taka 100,000 on average per month.
It may be mentioned here that F-commerce is one of the newest forms of online business versions which got popular among the young entrepreneurs of many countries because of its wide marketing reach due to better targeting, greater interaction and higher return on investment. This form of business is more appreciated by the new generation of people who shop online. This mainly ascribes to the fact that shopping in Facebook pages is convenient for the young generation and as far as Bangladesh is concerned, there is no difference from that of the global scenario, and the prospect of F-commerce is very promising as ease of usage plays a role behind the popularity of F-commerce stores. Besides. F-stores are able to set up their online store for free and they do not have to deal with websites or a physical space, requiring very little investment.
Globally, F-commerce comes under ‘Social Commerce’ that covers all social media sites including WhatsApp, Instagram, etc.
From the consumer point of view, the biggest advantage derived from F-commerce is the ease of browsing through tonnes of products from the comfort of your own place, and the flexibility of time.
Shop for whatever you need on Facebook, and have it delivered to your doorstep, often within a day or so.
The benefits are actually much more diverse and far reaching from the business point of view. First off all, a Facebook based business provides flexibility to the entrepreneur like no other in terms of assignments, work hours and ease of communication.
Nahida Khanam started Adhuna Fashion, a Facebook page selling good quality western wear, starting off as a side project but in just a year since starting with an investment of just Taka 5,000, her monthly profits have now reportedly exceed Taka 50,000 mark.
What propelled the growth of F-commerce further is COVID-19.
Now considering the immense potentials of F-commerce, the Government has decided to arrange micro credit at 4 per cent interest rate for the entrepreneurs of the F- commerce.
“Bangladesh Bank (BB) has already constituted a Taka 500 crore fund for start-ups. Entrepreneurs who are engaged in F-commerce and other forms of e-commerce will get credit at 4 per cent interest rate from this fund,” said BB’s Chief Spokesperson Md Serajul Islam, while adding that as per the prerequisites, all state-owned and private commercial banks or specialised banks can avail the refinancing scheme of Taka 500 crore.
At least 400,000 new entrepreneurs are engaged in F-commerce and Bangladesh Bank is going to arrange small loans at 4 per cent interest for the entrepreneurs who are engaged in F-commerce and start-up business, confirmed State Minister for ICT Zunaid Ahmed Palak recently at a virtual conference while adding that the participation of young entrepreneurs in F-commerce is on the rise significantly.
According to e-Commerce Association of Bangladesh (e-CAB), the F-commerce market is gradually expanding in Bangladesh. Business transactions with respect to the same worth Taka 7,000 crore took place in 2020 over traditional e-commerce mediums, and an astounding Taka 1,000 crore was contributed by F-commerce even as over 400,000 new entrepreneurs are engaged in F-commerce in the country and the number of entrepreneurs is increasing.
Further, according to the e-CAB statistics, prospects of F-commerce in Bangladesh is even better as it is among the top 10 Facebook-using nations.
However, as with any promising sector, there are some drawbacks of F-commerce as well. This social media platform may seem flawless but it is not. Perhaps, the biggest negative impact that F-commerce has on the economy is that they reduce the volume of sales and other local taxes. Not every Facebook retailer charges appropriate sales or other local taxes for items that customers buy from online stores and pages. As a result, people may not pay sales taxes on online purchase that they would have paid if they had made the same purchase in a bricks-and- mortar store. Also, businesses can evade taxes as well because out of 300,000 Facebook stores, only 100 are associated with the e-CAB.
Facebook business can also remove money from the local economy. For example, if a customer buys a gift from a Facebook page instead of a local business, that money goes to the national retailer instead of the purchaser’s community. This loss of income can restrict the local economy.
Also, people getting conned out of their money through Facebook stores and pages is a common occurrence, claim many as fraudsters allegedly set up fake pages with attractive items and offer to lure customers even as they take the money upfront but never deliver the product while at times, retailers also deliver fake products.
Many allege that customer security is non-existent in this sector as there is no surveillance on F-commerce sites and no legal structure makes this sector unorganised and invites many challenges like uncompetitive pricing, customer harassment and quality issues, etc.
According to a report by Cyber Crime Awareness Foundation, more than 11.48 per cent of customers of the e-commerce sector were deceived last year by various e-commerce and Facebook commerce (f-commerce) websites.
The number was previously 7.44 per cent in 2019.
However, after the Commerce Ministry released e-commerce guideline recently, anomalies in the digital commerce as a whole, is expected to come down drastically, which would be good for F-commerce as well.
Commerce Minister Tipu Munshi recently briefed reporters on various aspects of the guidelines over an online event while maintaining that for digital businesses to run smoothly, the Digital Commerce Management Guidelines were prepared after consulting various ministries, Governmental and non-Governmental organisations, and other stakeholders concerned even as keeping with the new guidelines, digital marketplaces have also been instructed to obtain at least one trade licence that has to be displayed in the marketplace or social media page while a Unique Business Identification Number (UBIN) will be made mandatory for all digital commerce organisations in phases.
Additionally, market places will have to obtain a licence from the Department of Drug Administration for the purchase and sale of medicines and medical supplies through digital means whereas in all cases where there is an obligation, a certificate from a quality controlling authority also needs to be obtained.
With the Government putting in place checks and balances and the Central Bank constituting a Taka 500 crore fund for start-ups from which entrepreneurs engaged in F-commerce and other forms of e-commerce will get credit at 4 per cent interest rate, there is going to be a definite boost to F-commerce in Bangladesh.