Know the Advantages and Disadvantages of E-commerce Before Investing

What is e-commerce?

E-commerce (Electronic Commerce) refers to the buying and selling of products and services over the internet. It is a technology-driven method of conducting business that enables customers to shop from the comfort of their homes.

The main types of e-commerce:

• B2B (Business to Business): Selling goods or services from one business to another.
• B2C (Business to Consumer): Selling goods or services directly from a business to the customer.
• C2C (Consumer to Consumer): Selling goods or services from one customer to another (e.g., Bikroy.com, Facebook Marketplace).
• D2C (Direct to Consumer): Selling products directly from the manufacturer to the consumers.

Why invest in e-commerce business?

The main reasons for the popularity of e-commerce in Bangladesh include easy transaction systems, the rise in mobile internet usage, and the availability of various online platforms. Some reasons for investing in online business include:

• Low capital business opportunities: E-commerce businesses do not require large investments. It is possible to start an online business with a small venture.
• Customers can be reached across the country: Through e-commerce, you can reach customers across the country.
• It remains open 24/7: An online store remains open 24/7, which helps in increasing sales.
• Digital marketing advantages: Facebook, Google Ads, and SEO (Search Engine Optimization) can easily be used for promotion.
• Lower operational costs: Compared to the costs of renting a shop or showroom, hiring employees, and other expenses, running an online business is much more cost-effective.

The advantages of e-commerce business in Bangladesh

Through e-commerce, you can run an online store with low capital and sell products from anywhere. However, staying competitive, tackling technological challenges, and ensuring customer satisfaction are major challenges in this field! Let’s take a look at the advantages and disadvantages of e-commerce in Bangladesh.

1. The e-commerce market is growing rapidly.

E-commerce sector in Bangladesh is rapidly growing, and new customers are being attracted to online shopping every day. Some products and services are now unthinkable without being available online, such as train and bus tickets, local and international books, etc.

2. Digital payments have become more accessible

Transactions have become easier through mobile banking systems like bKash, Nagad, Rocket, and others. From cities to villages, a large population is now accustomed to digital payments, which is directly impacting the country's e-commerce sector.

3. Competitive Market 

Some consider it a disadvantage, but the truth is that a competitive market creates a great business-friendly environment. Even with numerous businesses, it is possible to survive the competition by using the right marketing strategies. Moreover, this market provides everyone with an opportunity to expand their business. 

4. Government incentives and support

Due to the government's e-commerce policies, e-payment systems, and startup support, this sector has become an attractive area for investment. The government of Bangladesh aims to build a strong e-commerce sector in the country. Therefore, it has provided various incentives to ensure easy and cost-effective entry for businesses in this sector.

5. Dropshipping and Online Delivery Benefits

If wished you can sell products from various suppliers without having your own stock or goods. This is an amazing opportunity! It means you don't need to have your own products or stock them with your own money. You can make a profit by selling products from another business or manufacturer.

Disadvantages of E-commerce Business in Bangladesh:

1. Fraud and scam

Due to fraud by some online sellers, customer trust is being eroded. This is currently the biggest issue in Bangladesh's online sector.

2. Delivery issues need to be addressed

In many areas of Bangladesh, providing fast delivery is challenging. Many delivery services operate in easily accessible areas, but it is still difficult to get this service in remote regions. However, the situation is improving rapidly.

3. Lack of technical skills

Many entrepreneurs are unable to fully adapt to technology. They are doing well in offline or physical businesses but struggling to perform well online. It will take a few years to bridge this technological gap.

4. Lack of quality service and customer support

If there is a lack of good customer service, customers' trust in the business can be lost. Once a customer's trust is broken, it becomes difficult to win them back. This is a major challenge in online business.

5. Complexity of Return Policies

It may seem like a small issue, but it is a big problem for Bangladesh. Many e-commerce businesses do not have suitable return policies for products. Since it is an online marketplace, customers cannot physically inspect the product before purchase, so having a customer-friendly return policy is crucial. 

Tips for Achieving Success in E-commerce Business

• First, conduct thorough market research. Study which products or services are popular. Then, find out which product or service you can work with from that research.
• You need to focus on quality customer service. Providing fast and good customer support will make your business sustainable.
• Use various digital marketing channels, such as SEO, social media marketing, content marketing, email marketing, Google Ads, etc.
• Build trust by having good reviews, fast delivery, and secure payment options.
• Choose a reliable delivery partner. Use a good company's service to ensure products reach quickly and safely.
• Establish return and refund policies. Have simple and acceptable return policies to gain customers' trust. Ultimately, it will benefit you.
• Analyze the market and set a competitive price for the product or service.
• Create a good website. To survive, a user-friendly and mobile-responsive website is essential.
• Ensure cybersecurity to protect online payments and customers' personal information.
• Analyze customer feedback or reactions and sales data to make regular improvements.
• From the start of your business, make sure to use a high-quality accounting app. For Bangladesh, an app like HishabPati is suitable.

E-commerce business will become increasingly popular in Bangladesh. Therefore, it is essential to understand the advantages and disadvantages of e-commerce before investing. It offers an opportunity to capture a large market with low investment and costs. To succeed, emphasis should be placed on thorough market research, customer service, digital marketing, and secure transaction systems. 

Demo - View this & start your journey with HishabPati in three simple steps!

• Step 1: Sign up on HishabPati 

First, visit the HishabPati website and create an account for your business. Alternatively, download hisabpati app from google play store and register. Registration in HishabPati is quite easy & complete free.

• Step 2: Set up your company 

After signing up, first set up your business profile by providing the necessary information as the owner. Then, set up essential business aspects such as inventory, units, purchases and sales, outstanding balances, invoices, and transactions. After that, start updating daily transactions.

• Step 3: Enjoy the various features of HishabPati 

After starting to keep business accounts on HishabPati, make use of the necessary and unique features, such as invoicing, barcode scanning, units, and expense management, among others. 

Watch a demo video on YouTube in Bengali to understand the usage and features of HishabPati in detail. 

Digital ledger for income and expenses – HishabPati demo.

HishabPati's subscription fee starts at just 99 Taka!

HishabPati is Bangladesh's easiest and most affordable accounting app. Its subscription fee is divided into monthly and annual terms, with three budget-friendly packages available.

• 01. Basic Package: The Basic package is completely free! This means you can try out the app without purchasing a subscription.
• 02. Premium Package: The monthly subscription fee for the premium package is just BDT.99. And there's a 17% discount on annual subscriptions! It will cost only 999 taka in a year!
• 03. Business Package: The monthly subscription fee for the Business package is just 199 Taka. Like the Premium package, the annual subscription also comes with a 17% discount, making the yearly cost only 1990 Taka.

Know about all features of packages today in details & choose your desired package. Good luck with your business!