Overview of Bangladesh Retailing Industry

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Retail trade is one of the traditional businesses of Bangladesh. Its expansion is keeping pace with population growth and changes in consumption patterns, which are consistent with the growth of the economy. This expansion has not been structurally organized, because, until recently, retailing had never been perceived as an industry, but rather as an individual or family business entity with a very limited scope of organized expansion. Little to no market information is available on the retail sector, but secondary sources indicate that the size of the food retail sector in Bangladesh could be US$12-14 billion, and the number of retail grocery shops could be around 1 million. Retail is one of the biggest sources of employment (12 percent), and it contributed 13 percent (wholesale and retail trading) to Bangladesh’s GDP.

Organized retail is booming and creating huge opportunity for enterprises. Retailers though sell other companies products work out their own marketing strategies fixing their own target market towards providing customer satisfaction separately. Retail stores irrespective of product line and relative prices emerge in all shape and sizes, such as Specialty stores, Department stores, Supermarkets, Superstore, Convenience stores, Discount stores and off- price stores.

Types of retail shop in Bangladesh:

There is a wide variety of retail shops in Bangladesh, ranging from open-air temporary shops to well-equipped modern supermarkets. The following classifications may be applied:

1. Roadside shops: These small grocery shops are visible throughout the country and constitute around 75 percent of the retail sector. The floor space ranges between 30 and 100 sq. feet. Most village markets are in this category. No imported food items are available in these shops except some low-quality products from India, especially in border-adjacent areas.

2. Municipal Corporation Markets: Shops in the municipal corporation markets are arranged according to the kind of commodity they carry, such as, fish, meat, vegetables, fruits, and groceries. These shops appear in the semi-urban and urban areas. Imported foods and processed food items are available, but limited to those purchased by the middle class. This category represents about 20 percent of the food retail sector.

3. Convenience Stores: These are located mostly in well-to-do urban areas. The customers are upper-middle to upper-class locals and foreigners. These stores are major outlets for imported food items and high quality local products, and represent about 5 percent of the retail sector.

4. Supermarkets: These are the most recent additions to the retail sector in Bangladesh and began appearing less than 5 years ago. With the success of the pioneer supermarkets, this type of store has already attracted the interest of investors, and new outlets are coming into operation quickly. To date, there are about 30 stores of this kind operating in the country, of which 22 are located in Dhaka. They make up less than one percent of the retail sector. The chain super market has more than 8000 different types of items.

Why is retailing important?

As the final link between consumers and manufacturers, retailers are a vital part of the business world.    1. Retailers add value to products by making it easier for manufactures to sell and consumers to buy.  It would be very costly and time consuming for consumers to locate, contact and make a purchase from the manufacturer every time they wanted to buy a candy bar, a sweater or a bar of soap. Similarly, it would be very costly for the manufactures of these products to locate and distribute them to consumers individually. 

  2. Retailers also provide services that make it less risky and more fun to buy products.  They have salespeople on hand who can answer questions, may offer credit, and display products so that consumers know what is available and can see it before buying....
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