Digital Drive and Reform Roadmap for Bangladesh’s E-Commerce Future

Bangladesh’s economy is currently undergoing a significant transformation. Over the past decade, the country’s digital economy has expanded rapidly. According to data from the Bangladesh Telecommunication Regulatory Commission (BTRC), there are now more than 130 million internet users in the country, accounting for approximately 75 percent of the total population. At the same time, various studies conducted by Google, Temasek, and Bain & Company indicate that South Asia’s digital economy is expected to grow substantially over the next five years, with Bangladesh poised to become one of the principal contributors to this growth.

The e-commerce sector in Bangladesh has already emerged as a significant component of the national economy. According to the e-Commerce Association of Bangladesh (e-CAB) and various research organizations, the country’s e-commerce market is currently valued at approximately 5 billion US dollars, generating direct and indirect employment for nearly 1.5 million people. This sector plays a critical role in promoting SME development, fostering women entrepreneurship, and integrating rural economies into the national economic framework. By 2029, the market is projected to exceed 12 billion US dollars. However, despite its immense potential, the sector continues to face several fundamental challenges.

First, the absence of a strong and unified regulatory authority remains a major concern. Currently, digital commerce-related matters are divided among the Ministry of Commerce, Bangladesh Bank, and the ICT Division. This fragmentation slows policy decision-making and often creates uncertainty for entrepreneurs. Countries such as Singapore and Estonia have successfully accelerated the expansion of their digital economies by establishing centralized digital regulatory authorities. In Bangladesh, discussions regarding the formation of an independent Digital Commerce Authority have been ongoing for several years, but implementation has yet to materialize. Establishing such an authority would ensure effective policy coordination, consumer protection, market expansion, and regulatory oversight.

Second, a crisis of consumer confidence poses a significant obstacle to the sector’s growth. In the past, irregularities by certain companies resulted in financial losses for thousands of consumers, thereby undermining public trust in the industry as a whole. Introducing a mandatory escrow payment system would allow customer payments to be held by a secure intermediary institution, with funds released to sellers only after product delivery is confirmed. Globally, major e-commerce platforms such as Amazon and Alibaba Group utilize this mechanism to safeguard consumer interests.

Third, Bangladesh’s digital presence in the international market remains limited. According to the World Bank, the global e-commerce market currently exceeds 26 trillion US dollars, yet Bangladesh has secured only a minimal share of this vast market. Although the formulation of a cross-border e-commerce policy has progressed significantly, its prompt approval and implementation are imperative. Once implemented, this policy would enable Bangladeshi SME entrepreneurs to conduct business more easily on global platforms such as Amazon and Alibaba, thereby contributing substantially to export earnings. If effectively executed, the cross-border e-commerce market could expand from the current 0.5 billion US dollars to 5 billion US dollars within the next five years.

Fourth, limitations in international payment gateways represent a considerable barrier to business expansion. At present, Bangladeshi entrepreneurs do not have full access to the services of PayPal. According to Bangladesh Bank, the country earns approximately 1 billion US dollars annually in foreign exchange from freelancing activities. Establishing a comprehensive international payment infrastructure could significantly increase this revenue and create new opportunities for digital entrepreneurs.

Fifth, logistics infrastructure and fulfillment networks remain underdeveloped. Sustainable growth in the e-commerce sector is not feasible without an efficient logistics system. The government of Vietnam successfully tripled its e-commerce market within five years through logistics infrastructure development and supportive policy measures. Bangladesh similarly requires the adoption of a national fulfillment network and a logistics modernization program.

Additionally, the shortage of skilled manpower and export-focused digital entrepreneurs constitutes a substantial limitation. National-level training programs in digital business management, international trade, and e-commerce export are urgently needed to develop a competent workforce capable of sustaining sectoral growth.

For the new government, the most crucial step at this juncture would be to announce a clear Digital Commerce Reform Program. Within the first 180 days of assuming office, it should establish a Digital Commerce Authority, make the escrow payment system mandatory, implement the cross-border e-commerce policy, launch skill development programs, and ensure international payment integration.

This represents a major opportunity for Bangladesh. The country’s youthful population, rapidly expanding internet penetration, and strong entrepreneurial base provide a solid foundation for the growth of the digital business sector. With appropriate policies and government support, the digital commerce industry could generate more than one million new jobs over the next five years. A significant portion of the employment target declared by the Prime Minister could be achieved through this sector alone.

If Bangladesh adopts the right policies and makes effective decisions at this critical juncture, it has the potential to emerge as a leading digital commerce hub in South Asia.

Author: Mohammad Shahab Uddin Shipon, Former President (act), e-CAB

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