Consumerism is rising in Bangladesh owing to increasing disposable income and an expanding middle class who are spending on a new and wide range of products and services, said a senior official of global market research firm Nielsen.
“People have more money to spend,” said Prasun Basu, president of Nielsen South Asia, at a roundtable at The Daily Star Centre in Dhaka on Monday.
Nielsen in partnership with The Daily Star organised the event titled “Evolution of Consumerism in Bangladesh: Changing business landscape through convergence and connectedness”.
Syed Mahbubur Rahman, managing director and CEO of Dhaka Bank, said the country's macroeconomic fundamentals were very good, riding on growing export, import and foreign currency reserves.
He said per capita income, investment, the number of private schools and eateries all were growing. Even air tickets are having to be booked much ahead of a vacation because of the increasing demand, he said.
“This means the middle class is rising,” he said, adding that the middle and affluent classes were expanding in size every year.
The CEO, however, said there were some problems with governance, and that was the basic problem in the country. “If we really work on the governance side, surely we can do much better,” he added.
He said steps should be taken to benefit from the huge youth pool by way of equipping them with the right set of skills.
In a presentation, Basu said the country would be among the fastest growing economies by 2050, and sectoral restructuring was visible in the process of growth.
Bangladesh is one of the top 10 countries in terms of population size while the population density is also high, he said, adding, “Finding such a country with a concentration of people is not easy.”
He said more than half of the population was aged below 30 years.
“Obviously youth means digital. Digital means youth,” he said, adding that the choices of today's youth will shape tomorrow's Bangladesh.
Basu said the number of people in the well-off middle class was not small in the country and they contribute to the growth of consumerism.
“Rising consumerism contributes to growth across sectors,” he said.
The number of retail stores grew 8.6 percent year-on-year to 1.65 million in 2015, according to the presentation.
The urban area is growing more rapidly than the rural area. Some 1.28 million stores are located in the rural areas.
The fast moving consumer goods sector grew 9 percent to $3.4 billion in the year ending August 2017.
Basu said consumerism was evolving as consumers were connected to digital devices. Their media use habits are changing and they are fast adopting technology, he said.
Sabbir Hasan Nasir, executive director of ACI Logistics, said the contribution of modern trades would increase in coming years.
He said traffic congestion was putting a huge strain on people's time. So, the demand for convenience will rise, he said.
Nasir said the improvement in infrastructure and increased mechanisation in farming would help increase the supply of agricultural produce.
Health consciousness on food safety and nutrition is also on the rise while the demand for organic food will also increase, he added.
Soumendra Sankar Das, chief marketing officer of Partex Star Group, said many young people are getting involved with entrepreneurial activity but it was not happening in a sustainable manner.
Syed Gousul Alam Shaon, managing director of advertising firm Grey Bangladesh, said the size of the youth population in Bangladesh was huge. “There is a lot of real work that needs to be done with the youth,” he said.
Aman Ashraf Faiz, managing director of Gazi TV, called for research to understand consumer behaviour and their choices.
“We are trying to develop quality content. We are failing because we do not know consumers. We need to understand our audience better.”
Masud Khan, chief executive officer of Crown Group, said Bangladesh's cement market was growing, but per capita consumption still lags behind that in India and China. The same is true in case of steel, he said.
Speaking on the changing advertising scenario, Shadab Khan, managing director of Coca-Cola Bangladesh, said companies can not be specific to a single medium nowadays.
Television is still king but companies have to use other channels, predominantly digital ones, to reach out to customers, he said.
Shariful Islam, founder of Bangladesh Brand Forum, said the market was truly hungry for authentic data and better insights. Md Tajdin Hassan, head of marketing of The Daily Star, also spoke.