Traditionally, the retail sector consisted of small family and individual companies, but new distribution outlets (supermarkets) have developed in the last 10 years. Although regular grocery shopping remains very much the same as it has done for years, organized supermarkets (present retail superstore format) is experiencing a period of almost unparalleled growth, which generates more demand and creates more business opportunities. Bangladesh’s retail stores, regardless of product line and price, have begun to appear in different shapes and sizes, with a recent development being grocery stores, discount stores, department stores, and superstores. Changing tastes and preferences have seen retail shopping shift into the realms of becoming an experience, one where the shopper or tourist enjoys a clean, air-conditioned, and healthy atmosphere. Some middle-class Bangladeshis who are used to living in gated communities prefer the modern shopping experience in these supermarkets because they feel more familiar with the shopping style than they will be visiting. 

However, as compared to its South Asian counterparts, the retail sector in Bangladesh is undeveloped, structurally poor, and fragmented. In recent years, the rate of retail growth in Bangladesh has been 7.0 percent. Bangladesh’s retail ecosystem can be divided into two streams: organized retail and unorganized retail. While unorganized retail has shaped the entire industry over the years, organized retail is increasingly becoming popular for the convenience of the new generation seeking customers. Though local mom and pop shops (Mudir Dokan in Bengali) are still greater contributors to consumer goods turnover, super shops are increasingly converting those consumers into their value chain while also generating new customers.


The shift in customer behavior has been one notable improvement during this Covid-19 pandemic. The contactless economy has become a survival requirement, and while once we thought it was the younger generations who would turn to e-commerce markets seamlessly, now even our parents and grandparents have bKash wallets and order from Facebook stores or ChalDal.com. Based on the Bangladesh Entrepreneurship Ecosystem: Funding Environment dashboard of LightCastle Partners, the e-commerce retail market is currently a big source of foreign investment, generating roughly USD 41 million and is now the third-largest funded sector in Bangladesh. Although this shows a great deal of hope for the future of the e-commerce industry, it also highlights the need for companies, platforms, and regulators to recognize the overall negative problems and obstacles facing this industry and to explore possible approaches to solve them at present and in the future.


Bangladesh’s retail stores have yet to be shaken by the global market change. But they need to recognize that the ultimate battlefield for the future is online, and this is where the entire industry is going. Meena Bazar, one of Bangladesh’s top players, recently highlighted its online footprint through its Meena Click e-commerce platform. The supermarket brand Shwapno has also just launched its beta edition of online shopping. And there is Chaldal.com, a retailer of click and mortar groceries and food items that has been running for quite a while.

Most recently, with their service called Pathao Tong, a local start-up called Pathao has begun experimenting with grocery delivery. Deligram, an omnichannel e-commerce platform that incorporates mom and pop shops (mudir dokan) into its value chain, is the latest edition in the picture to connect online customers and offline stores in the near proximity of customers. The shift is taking place in Bangladesh’s organized retail market. The industry players, however, should buckle up to match the pace with the global market, not just to take new measures, but also to strengthen the infrastructure of the value chain. As the population of the middle and affluent class (MAC) rises, the demand for quality goods, better services, and convenient shopping will continue to increase. This would draw foreign retail chains to join and invest in Bangladesh, and as we speak, Amazon is likely to start operating sometime in the next year. It will then be very important to see how the current players react when the third largest business in the world joins Bangladesh.


The pandemic has boosted the progress of digital grocery stores, which have been dormant for the past few years. A number of different factors can be attributed to the reasons: 

Lack of Digital Integration. There is a lack of adequate security, reliability, norms, and communication protocols for the system along with insufficient bandwidth for telecommunications. Very few supermarkets run on Facebook or Instagram accounts and have their own website. Even if the platforms are available, essential items such as real-time monitoring, accurate inventory counts, etc. are missing. As a result, corporations have not been able to attract more customers. 

Quality concern. The standard of products and services offered at discount chain stores is an important aspect that constitutes customer loyalty. Product quality is typically determined by product attributes, benefits and the ability to meet the needs needed, and so on. It is regarded as one of the significant determinants of satisfaction. Since customers are used to purchasing goods by checking their freshness directly, digital food lags behind. Thus, physical outlets have dominated the retail market.

Payment issues. One of the key e-commerce bottlenecks in Bangladesh is the operation of the e-payment system, which suffers from a lack of e-currency convertibility. Without the assistance of any mediating third party, the balance in any e-cash account is not convertible like cash. In addition, it appeals to special hardware arrangements. Due to the current obstacles to digital payment, consumers have a hard time clearing their payments. While the growth of MFS has created more possibilities for easy payment, larger transactions are still prohibited by cash limits. 

Problems with the distribution. The inefficiency of delivery systems is also a source of customer frustration. Sometimes, delivery men cause problems such as mixing orders, calling at inappropriate times, inability to locate the right address, etc. While the inefficiency of third parties is the main cause of these annoyances, it also reflects negatively on the companies themselves.


New windows for innovation have been created by the disruption in the market. In online grocery stores, E-courier has spotted the vacuum and introduced the city’s first BOT-based messenger shopping. A BOT is an application for software that runs automated tasks over the internet.

In order to manage their organizational activities, a number of large retail companies today use at least one software application. While some of them have implemented retail solutions that are globally recognized, others have chosen locally developed ones. Most of these firms use software to manage their finance and accounting at the point of sale. Most of the 15 major retail companies have an online presence in Bangladesh. This is an encouraging sign and shows that global trends are well aligned with the industry. Most revenue gains have occurred globally via online channels. In addition, the rate of growth of online channels has been several times higher than that of the total growth of retail. 

At the same time, due to their absence from online channels, traditional retailers have been experiencing flat or decreasing sales. While the growth of online sales is expected to dwarf the overall growth of the industry by several percentage points, retail companies need to choose the correct channel carefully from the options available. Global trends over the last three years indicate that the prospect of mobile device sales growth is much higher than that of other devices (desktop computers, tablets, etc.).To sell products via mobile devices, there are two technology options: mobile apps and mobile sites. 

Consumers worldwide have a preference for web pages rather than mobile apps, largely because of the vast number of apps already installed on their smartphones. On the other hand, loyal customers appear to favor mobile applications installed on their smartphone for quick access and loyalty point monitoring. Therefore, to improve online sales, it is imperative for retail companies in Bangladesh to concentrate on developing mobile sites instead of other online platforms.

An efficient mobile site will require interactive features that are based on detailed user person studies, especially the behavior of prospective buyers. Business leaders need to understand that it is unlikely that a website designed for desktop computers can produce sales benefits through mobile devices.

by Orobi Bakhtiar

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