Disruption in shopping

It was a regular morning in Dhaka and Mashroor, an 18 year old high school student, was looking for Patrick Modiano's 'Missing Person'. Even 3 years ago, he would have headed straight to the book stores. Today, using only his cellphone, he starts shopping from online stores. Not only did he buy 'Missing Person', he also bought some other interesting yet hard to find books using this platform. By shopping online, he was also able to get discounted prices.

Other than books, Mashroor also picks up a great deal of stuff from online stores as per his requirement, choice and budget. More importantly, by shopping online, he saves a great deal of time as he no longer needs to move around in Dhaka's traffic jam and poor road conditions. Hence online shopping scenario is no more a fiction.  Rather, it is a dream come true for shoppers as their decisions and actions are just a few clicks away.

Shopping is undergoing a disruption as online shopping reshapes the landscape and redefines consumer expectations. Online retailing took off around 1990 with a shaky start and like any other business, it also faced harsh economic realities.  Today, the reality is changed as consumer priorities in life have also changed. In 21st century, people are pursuing more meaningful activities in their everyday life. Time is the most precious thing in their lives. Hence people always look for convenience by right use of time, and shopping online is a great way to utilize time efficiently. 

Globally, digital retail amounts to 20% of the total sales volume, although the proportion will vary significantly on a sector by sector basis. One of the top retailers' five-year average returns on investment, for example, is 17%, whereas traditional discount and department stores average 6.5%. And this is just the beginning. Bangladesh is not far away from that trend. Back in 2012 I had an opportunity to meet Buckle B's (a USA based fashion retailer) executives in Oklahoma who have approximately 400+ stores around the country. They said Buckle B's online orders had increased to 20% from 11% in the space of a year. More importantly, it is estimated that digital information already influences about 50% of store sales, and that number is growing at an extremely fast pace. The unique selling proposition of online shopping is that it has got diverse channel in one platform.

It is needless to mention that online shopping is convenient; one can do it from home or work as and when he can manage time.  One can also see product reviews and recommendations that play an important role in one's purchase decision. Bangladesh is picking up the trend quite fast as the digital ecology for online shopping is taking shape with the increasing number of internet users, which is expected to exceed 18 million by the end of 2020. At a household level, more than 30% will have at least one internet subscription, and business adoption will be around over 65%. Moreover, according to E-commerce industry experts, the current volume of online shopping is more than Tk. 2 billion.

The E-commerce sector is segmented into f-commerce, B2B2C, online classifieds and others. Out of which B2C enjoys the major business and growth.  Online tickets, clothing and shoes, grocery, readymade foods, mobile phones and electronics & electronics fall among major purchase categories.  Typically, sales volumes increase significantly during Eid festivals and other festivals like Bengali New Year and Valentine's Day. Besides, considering improved digital ecology, global players such as Amazon, Snapdeal, Flipkart can get into this market in near future. Access to internet, bandwidth, speed and finally cost of connection will play a vital role to help this omnichannel business platform to flourish, and at the same time, right inventory, smooth delivery and proper after sales service will help major players to grow in this market.

Writer of this article is A Z M Saifuddin, a Communication Professional works with an advertising company. He is available at saif@paperhymebd.com