E-Commerce in Bangladesh

BRAC University Journal, Vol. II, No. 2, 2005, pp. 49-56

THE ECONOMIC IMPACT OF E-COMMERCE
Ziaul Hoq
School of Business American International University-Bangladesh (AIUB) Banani, Dhaka 1213, Bangladesh and

Md. Shawkat Kamal
Department of Management and Business BRAC University, 66 Mohakhali C/A Dhaka, Bangladesh. and

A H M Ehsanul Huda Chowdhury
School of Business American International University-Bangladesh (AIUB) Banani, Dhaka 1213, Bangladesh

ABSTRACT E-commerce has a significant impact on business costs and productivity. E-Commerce has a chance to be widely adopted due to its simple applications. Thus it has a large economic impact. It gives the opportunity for “boundary crossing” as new entrants, business models, and changes in technology erode the barriers that used to separate one industry from another. This increases competition and innovation, which are likely to boost overall economic efficiency. Key words: E-Commerce, Bangladesh, B2B, B2C, Logistics

1. INTRODUCTION E-commerce is a way of conducting business over the Internet. Though it is a relatively new concept, it has the potential to alter the traditional form of economic activities. Already it affects such large sectors as communications, finance and retail trade and holds promises in areas such as education, health and government. The largest effects may be associated not with many of the impacts that command the most attention (i.e. customized product, elimination of middlemen) but with less visible, but potentially more pervasive, effects on routine business activities (i.e. ordering office supplies, paying bills, estimating demand). 2. OBJECTIVE OF THE STUDY • • • To examine impact of e-commerce on business cost and productivity. To evaluate present status of e-commerce. To identify how e-commerce reduces cost 49 • •

of customer services and after sales services. To identify key success factors of ecommerce To provide insights for policy formulation in the area of

References: Borenstein, S. and Saloner, G. (2001), ‘Economics and Electronic Commerce’, ‘Journal of Economic Perspectives’, p. 23-45. Fisher J. (1992), “Some Market Effects of Ecommerce”, paper presented at University of Melbourne. Gilder C. (1994) ‘Productivity developments abroad’, Federal Reserve Bulletin, Washington D.C., p. 30 Girishankar P., (1997), ‘ E-commerce: The calm after the storm’, Australian financial review, Sydney, February 2. Hage and Armstrong, (1997). ‘Does the “New economy” measure up to the great inventions of past?’ Journal of Economic Perspectives, p. 49-74 Hawkins B., (1998). ‘Dot –com survivors’, Business review weekly, Canberra p. 45 Hossain N., (2000), ‘E-commerce in Bangladesh: status, potential and constraints.’ research paper, p. 1, USAID, Bangladesh. Kehoe C. (1998), ‘E-tailing start to klick’, Sydney morning herald, Sydney Lindsay P. (2002), “E-commerce”, The Economist Books. p. 1. OECD, “The social impact of electronic commerce”, 1999 p. 9 and 2003. p.7 Shapiro, C. (1999), ‘Exclusively in Network Industries’, George Mason Law review, p. 111. Shapiro, C. and Varian, H. (1999), ‘Information Rules: A Strategic Guide to the New Economy’, Harvard Business School Press, Boston. p. 30 Taylor W. (1997), ‘ the twenty first century firm: changing economic organization in international perspective’, Princeton University Press, Princeton, New Jersey, USA 56