Digitalisation in Bangladesh needs a big push in order for the country to achieve its desired economic development during the post-pandemic era, according to Ashish Goupal, managing director of Marico Bangladesh.
"The ongoing Covid-19 pandemic has brought significant changes to the world and taught us a lesson about the importance of digitisation on the economy," he said in a recent interview with The Daily Star.
Better governance of the digital economy is also needed to help sustain the digital transformation and increased access to government machinery witnessed over the past few months.
"And this would go a long way towards improving Bangladesh's ranking on the Ease of Doing Business Index," Goupal added.
Digitalisation can solve many procedural issues, such as obtaining various business licences, and helps ensure that resources are deployed in a more constructive manner.
When speaking about current trends, Goupal said Bangladesh has a very young demographic which was highly engaged in social media.
Therefore, innovation and digital transformation are key to understanding and connecting with the consumers in Bangladesh.
"We have to remember that we are competing with countries like Vietnam and Cambodia, not just in terms of attracting investment, but also the related technology and intellectual capital," he said.
To improve the country's business climate and remove barriers faced by entrepreneurs, the government could form a joint task-force featuring both public and private sector entities.
For example, a task-force anchored by Bangladesh Investment Development Authority (BIDA) in association with the UNDP and various private sector representatives worked on restoring the country's supply chains amid the pandemic.
Having made its trading debut in 2009, Marico Bangladesh has a paid-up capital of about Tk 31.5 crore.
The leading fast-moving consumer goods company disbursed 950 per cent cash dividend for the fiscal year that ended on March 31, 2020.
"My two other suggestions would be to continuously hold open and responsive dialogues with the private sector and to ensure clarity and consistency in the application of government policies," Goupal said.
According to the managing director, Bangladesh is doing really well and that is why Marico is going to invest Tk 227 crore to establish a manufacturing facility in the country to meet the growing domestic demand for consumer goods.
"I must complement the numerous government agencies for the business-friendly attitude and policies, which is reflected in the economy's growth," he added.
But while the entire world is reeling from the Covid-19 fallout, Bangladesh has once again proven its resilience as the economy was already showing signs of recovery.
The government had taken timely measures to ease the lockdown ahead of harvest season, ensuring that the agricultural sector will pull through this unprecedented crisis.
As a part of its efforts to revive the economy, the government also announced comprehensive stimulus packages aimed at preventing unemployment, help the new-poor and tide over the economic slump caused by the pandemic.
And now, Bangladesh is projected to have the highest growth rate among its peers within the region in 2021, Goupal said.
Meanwhile, improved trade balance combined with growth in remittance and foreign direct investment has lifted the country's forex reserves to an all-time high while tax collection has recovered from its initial slump at the start of the pandemic.
With regard to how the virus has impacted consumers, Goupal said, "Covid-19 has changed our very lifestyles and the way we consume."
Due to lockdowns and the restrictions on public movement, people are spending a significant amount of time indoors.
So, going out to experience new products, eat or shop has dropped, said the managing director of Marico Bangladesh.
While elaborating on this change in consumer behaviour, Goupal said the economic uncertainty amid the pandemic has resulted in a loss of income for many.
This subsequently led to a fall in purchasing power and sharp decline in spending on non-essential items.
Marico Bangladesh has 37 brands in various categories, ranging from coconut oil and skin care products to edible oil and other food items.
Regarding how the pandemic has affected Marico in specific, Goupal said while no one could have predicted the speed or scale of the impact, his company had contingency measures in place well in advance.
Although there were intermittent supply chain disruptions across the country due to the lockdown between March 26 and May 30, re-modelling the company's distribution and sales network while putting stringent health and safety measures in place helped ensure business continuity.
Marico was also one of the first companies to fully implement work-from-home measures, including for members of its sales teams.
"We paid all salaries in advance and there were no job or salary cuts. It was important for our members and everyone across our value chain to know that Marico will take care of them," he said.
"Having a motivated workforce and an engaging work-culture is even more important when working virtually and this made all the difference to our business performance," Goupal added.
Despite the current situation, Marico Bangladesh witnessed solid growth in the first quarter of 2020 (April-June).
When asked how, Goupal said these results were driven by consistent efforts to create world-class products for Bangladeshi consumers, brand building and a strong distribution network.
During the first quarter, Marico's business grew by 10 per cent riding on the company's non-coconut oil sector, which grew by 18 per cent. Marico's non-coconut oil portfolio accounts for over 30 per cent of their total business in Bangladesh.
At the current trend, the contribution of non-coconut oil products, like hand sanitisers and washes, will likely exceed 35 per cent by fiscal 2022, according to the managing director.
Marico's first foray into the international market was with Bangladesh in 1999.
Since then, the country has remained an important part of Marico's business plans and is currently the largest consumer of the company's products.
"We plan to expand our operations in Bangladesh. We are already exporting to Nepal and India but are keen to grow our export operations as proud ambassadors of the 'made in Bangladesh' brands," he said.
Bangladesh accounts for about 49 per cent of Marico's international business in terms of consumption. Marico's business in the country grew by 12 per cent in fiscal 2020, delivering a consistent double-digit growth for three years in a row.
Marico now has business operations in 26 countries across various emerging markets in Asia and Africa and each geographic location presents unique opportunities and challenges.
"But our experience in Bangladesh has been a positive one and so, we would proudly advocate for Bangladesh as a top investment destination," Goupal said.
There is a lot of interest in the country's digital economy and the government has kept a strong focus on achieving its sustainable development goals while also seriously tackling climate vulnerability.
There has been a gradual revival of consumer sentiment due to focused government efforts and the restart of the economy as sectors like home electronics, mobile phones and textiles are returning to their growth momentum.
"At Marico, we also expect to have business growth as we ride out this crisis and believe that the right socio-economic indicators are in place to unlock the Bangladesh's potential in post-Covid era," he added.