Online sales growth slows

The high-flying growth of the e-commerce sector of Bangladesh has slowed in recent months, largely because of disrupted supply chains caused by strict lockdown and tightening of belts by consumers.

Besides, the recent controversy involving some e-commerce platforms spooked consumer confidence.

As a result, the number of online deliveries now hovers around 1.7 lakh daily, after it surpassed the 2-lakh mark in December, according to industry people.

"There was an increase in orders during Eid-ul-Azha, especially for fast-moving consumer goods. But the overall pace of growth has slowed," said Asikul Alam Khan, chief executive officer of PriyoShop.

Although the platform clocked more than 20 per cent year-on-year growth in the first half of 2021, the sales ahead of Eid were not satisfactory, according to Khan.

"Currently, we are making deliveries of 5,000 to 6,000 on average every day. It should be 8,000 to 10,000."

The demand for laptops and mobile phones and accessories has fallen. PriyoShop's top-selling items are oil, handwash, chocolate and baby food.

Khan says customers are now very cautious and keener to buy only basic items.

This is because many have lost jobs, and many have been receiving partial salaries since April owing to the second wave of coronavirus infections.

As Covid-19 has pushed everything online, chaldal.com's growth has been turbocharged during the pandemic. However, the pace has lost steam since January.

"Spending habits change, and people are spending less now," said Waseem Alim, chief executive officer of the platform.

Chaldal makes an average daily delivery of 8,000 to 10,000 during Eid, which is less than the 15,000 it had expected to carry out. During this time last year, it made around 4,500 deliveries per day.

According to Alim, the rising price of rice and edible oil and the supply chain disruptions owing to the countrywide suspension of transport movement were slightly to blame for the slower than expected growth.

Chaldal's top-selling items were mangoes, oil, and potatoes recently.

Daraz Bangladesh, the leading e-commerce platform in the country, says it has been facing huge supply chain disruptions for the lockdown as most of its consumer electronic items are dependent on imports.

"Due to the port congestion, we are facing difficulties in our supply chain," said Shayantani Twisha, head of public relations, media and communications at Daraz, a subsidiary of Alibaba.

Laptop and computer sales on the platform have decreased, while the sales of computer accessories, internet protocol cameras and storage devices have a positive impact on the business, she said. 

Daraz made daily deliveries of 50,000 to 60,000 in the last couple of months, down from 65,000 in March. It has the capacity to deliver 1.5 lakh packages to the customers' doorstep per day.

Due to the strict lockdown, it had to cancel the Eid Big Sale Campaign. However, it sold more than 400 sacrificial animals, up from 170 a year ago.

The orders on Pickaboo, a platform focused on selling laptops, computers, accessories, watches, electronics and appliances, increased 30 per cent during Eid.

It says sellers cannot deliver products regularly.

"Even during lockdowns, some staff who oversee finance and delivery processing had to come to the office. Delivery personnel did not face any trouble, but other staff have been facing some problems during their movement," said Morin Talukder, CEO of Pickaboo.

Rahath Ahmed, co-founder and chief marketing officer of home delivery service provider Paperfly, said lockdowns and the worsening coronavirus situation slowed online orders.

"We made over 25,000 deliveries per day in the days ahead of Eid-ul-Fitr. It declined to 16,000 in Eid-ul-Azha. However, we have seen a 30 per cent year-on-year growth during this Eid."

According to Pandamart, the grocery service arm of food delivery platform Foodpanda, the number of orders increased before Eid-ul-Azha despite the lockdown.

"In comparison to last year, orders went up due to the growing adoption of technology by consumers and enhanced reliability of online delivery services," it added.

Pandamart says it delivers products in 30 minutes in most cases.

It began operation in September 2020 and expanded in the capital, divisional cities, and major districts.

Meanwhile, online firms have welcomed the Digital Commerce Management Guide-2021 unveiled by the commerce ministry on July 4. 

However, the marketplaces that sell products of other merchants and producers would face some challenges because of it, they said.

"Definitely, it is a good guideline that will prevent the growth of companies that enter the market with an ill motive. But some modification is needed in consultation with mainstream platforms," said Khan of PriyoShop.

He elaborated: "When an order is placed, we source it from the supplier. But on-time delivery largely depends on suppliers or merchants. But it has been regarded as the marketplaces' responsibility in the guideline. The supplier should bear some responsibility as well."

The guideline came amid allegations of unusual delays in deliveries against some e-commerce platforms, including Evaly, although customers had made payments in advance.

In the face of complaints, various government agencies, including Bangladesh Bank and the Bangladesh Financial Intelligence Unit, are examining the transaction records of the platforms.

The controversial business model of Evaly, which used to receive money from customers months before making the delivery by providing astounding discounts, was replicated by some other platforms, including Alesha Mart and Dhamaka.

According to a central bank report, Evaly had a total asset of Tk 91.69 crore on March 14. Of the sum, the current asset was Tk 65.17 crore, and the total liability was Tk 407.18 crore.

As a result, it would only be able to deliver products or make refunds to 16.14 per cent of the customers with the current assets.

Chaldal's Alim says new customers are a bit hesitant to place orders on an online platform.