ASSIGNMENT ON E-COMMERCE (BANGLADESH

PERSPECTIVE)
Course Title: Accounting Information System
Course Code: 407

Submitted to:
Sanjib Sutra Dhar
Assistant Professor
Department of Accounting
University of Chittagong
Submitted by:
Md Kowsar Hamid (16301023)
Tayeba Khanam (16301073)
Delwar Hosen (16301093)
Taspia Sultana (16301020)
Parvin Akter (16301075)

Session: 2015-16
8th semester
Department of Accounting
University of Chittagong
 INS AND OUTS OF E-COMMERCE

Introduction
Rapid growth of world`s internet population and adoption of ICT in different sectors have
reshaped the way of communication and demand utilizing its potentials to the development of
trade and commerce. Speed, efficiency, effectiveness, energy and other uniqueness of the
technology made it as the fastest adopted and diffused technology until the 21 st century.

The explosion in the use of electronic commerce (e-commerce) by the business sector has been
tremendous since its inception only a few years ago. From governments to multinational
companies to one-person start-ups, e-commerce is increasingly viewed as a key business
modality of the future. Ease of transaction, widening markets, and decreased overheads are
factors that make e-commerce solutions more and more attractive, as evident with the growth
of online sales.

The world trade organization and different round discussions on the trade related issues have
opened up a new arena of global competition. Developing countries technological fitness is
must in searching new market and making buyer-seller relationship to achieve the
competitiveness in the global market. The World Wide Web (WWW) can be considered as the
right way which provides the opportunity to overcome the barrier of time and place in building
buyer-seller relationship. Thus, E-Commerce should be adopted as the effective media for
marketing and selling of a product or services through the internet.

Ecommerce refers to the buying and selling of products or services over electronic systems
through Internet and other computer networks.
The most popular medium in which e-Commerce is conducted is the internet. It combines a
range of process such as:
Electronic Data Interchange (EDI)
Electronic mail (E-mail)
World Wide Web (WWW)
Internet Applications
Network Applications
It does not include transactions over telephone, fax or any payments made online for
transactions whose terms were negotiated offline or by physical means.
Some common applications related to electronic commerce are the following:

 E-mail
 Enterprise content management
 Instant messaging
 Newsgroups
 Online shopping and order tracking
 Online banking
 Online office suites
 Domestic and international payment systems
 Shopping cart software
 Teleconferencing
 Electronic tickets

History of E-Commerce
In 1950‟s companies began to use computers to store and process internal transaction
records.
By 1960‟s businesses that engaged large volume of transaction had began exchanging
transaction information on punched card.
In 1968 Transportation Data Co-ordination Committee (TDCC ) was formed by some
companies.
In 1979 ANSI (American National Standards Institute) chattered a new committee to
develop uniform EDI (Electron Data Interchange).
In 1979: Online shopping was invented in the UK by Michael Aldrich.
In 1982: Minitel was introduced nationwide in France by France Telecom and used for
online ordering.
In 1984: World's first recorded B2C online home shopper. Mrs Jane Snowball uses the
Gateshead SIS/Tesco system to buy groceries.
In 1987: Swreg begins to provide software and shareware authors means to sell their
products online through an electronic Merchant account.
In 1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using a NeXT
computer.
 In 1992: J.H. Snider and Terra Ziporyn publish Future Shop: How New Technologies Will
Change the Way We Shop and What We Buy. St. Martin's Press. ISBN 0312063598.
In 1994: Netscape releases the Navigator browser in October under the code name
Mozilla. Pizza Hut offers pizza ordering on its Web page. The first online bank opens.
Attempts to offer flower delivery and magazine subscriptions online. Adult materials
also become commercially available, as do cars and bikes. Netscape 1.0 is introduced in
late 1994 SSL encryption that made transactions secure.
In 1995: Jeff Bezos launches Amazon.com and the first commercial-free 24 hour,
internet-only radio stations, Radio HK and NetRadio start broadcasting. Dell and Cisco
begin to aggressively use Internet for commercial transactions. eBay is founded by
computer programmer Pierre Omidyar as AuctionWeb.

Why e-Commerce for Bangladesh

With the increasing diffusion of ICTs, more specifically the Internet, the global business
community is rapidly moving towards Business-to-Business (B2B) e-Commerce. The buyers/
importers gain a clear advantage when the Internet gives them access to the global market, by
which they can compare prices across regions, find out whether prices vary by order
fragmentation, get awareness about substitute/ alternative products. Consequently, the
sellers/ exporters make sure that they are well portrayed in the cyber world through websites
and portals. Like buyers, sellers also benefit from increased and more efficient access to the
global market through the Internet. Bangladesh is pursuing an economic policy of export-led
growth. With the rising forces of globalization, it is becoming increasingly important that the
private sector, particularly the export sectors are well prepared to meet the requirements and
expectations of the importers and also stand out in the competition against exporters in other
countries. In such a scenario, two issues are becoming particularly important for Bangladeshi
export sectors – one, whether businesses are automating their internal processes with the use
of ICTs to become increasingly efficient and competitive in a global context, and two, whether
businesses have effective presence and participation in the cyber world. International
organizations such as UNCTAD (United Nations Center for Trade and Development) and WTO
(World Trade Organization) have, over the last several years, put much emphasis on the
importance of e-Commerce for developing countries. UNCTAD has special programs to facilitate
developing countries to transition into e-Commerce. The WTO has also developed rules and
guidelines for global e-Commerce transactions.

Traditional and Electronics Business Transaction

The business processes are broadly divided into five main categories namely:
 Market product and services
 Sell and deliver products and services
 Process payments
 Manage relationship
 Manage the enterprise
Traditional Commerce e-Commerce Traditional Commerce
vs. e-Commerce Items
Sales Channel  Enterprise  Internet  Manufacturer
 Consumer Wholesaler
RetailerConsumer

Sales Hour /Region  Entire world  Restricted area

 24x7  Restricted sales hour
Sales place/method  Market space (Network)  Market space (store)
 Sale based on  Sale based on display
Customer  Any time acquisition through  Market survey and
information internet salesman
acquisition  Digital Data without no re-  Require information re-
entry entry

Marketing activity  1:1 Marketing via bi-  One way marketing to

directional communication consumer
 Customer support  Real time support for  Delayed support for
customer Dissatisfaction customer Dissatisfaction
 Real time acquisition of  Time different for
customer needs catching customer needs

Capital  small  large

Dimensions of E-Commerce
The three dimensions of e-commerce are:
Business-to-Consumers (B2C)
Business-to-Business (B2B)
Business-to-Government (B2G)
B2C e-commerce is unlikely to be of much use in the near future in Bangladesh because of low
per capita income, a weak infrastructural and legal environment, lack of trust between business
and consumers. B2C for cross border trade is also limited by the factors suggested for the
domestic front. In addition, non-availability of international credit cards, foreign currency
remittance restrictions, delays and informal payments at customs clearance even for small
value and quantity items will discourage B2C.

Business to Consumer (B2C)

Where enterprises sell directly to the customer, often cutting out wholesalers or retail outlets.
B2C is the most commonly understood form of internet business www.muktobazaar.com most
successful trading has been with standard products such as CDs, Books, Software,
downloadable music etc.
Business to Business (B2B)
It is larger, growing faster. This includes procurements of raw materials and supplies, liaison
with contractors, sales channels, servicing customers, collaborating with partners, integrated
management with data and knowledge.

Business to Government (B2G)

Here business trade directly with government offices and agencies for public procurement (e.g.
supplies for hospitals, school and other government contracts.

Consumer to consumer (C2C)

Online transaction between private individuals. There are many sites offering free classifieds,
auctions, and forums where individuals can buy and sell thanks to online payment systems like
PayPal where people can send and receive money online with ease. eBay's auction service is a
great example of where person-to-person transactions take place everyday since 1995.

Benefits of E-Commerce
The benefits of e-Commerce are many and many. Some of them include:

24X7 operation: Round the clock operation is an expensive proposition in the brick and
mortar world while it is natural in the click and conquer world
Global reach: The net being inherently global, reaching global customers is relatively
easy on the net compared to the world of bricks
Cost of acquiring serving and retaining customers: It is relatively cheaper to acquire new
customers over the net. Thanks to 24 X 7 operation and its goal reach. Through
innovative tools of push technology to retain customers, loyalty with minimal
investments.
An extended enterprise is easy to build: In today‟s world every enterprise is a part of
the „connected economy‟; as such you need to extend your enterprise all the way to
your suppliers and business partners like distributers, retailers and ultimately you end
customers. Internet provides an effective (often less expensive) way to extend your
enterprise beyond the narrow confines of your own organization. Tools like enterprize
resource planning (ERP) ,supply chain management (SCM) and customer relationship
management (CRM), can easily be deployed over the net permitting amazing efficiency
in time needed to market, customer loyalty, on time delivery and eventually
profitability.
Dis-intermediation: Using the net one can directly approach the customers and
suppliers, cutting down the number of level sand in the process, cutting down the costs.
Improved customer service to your clients: It results in higher satisfaction and more
sales
Power to provide the ‘best of both the worlds’: It enhances traditional along with
internet tools.
E-Commerce in Different Sector in Bangladesh
Despite being a under developed country, selected segments of the Bangladeshi business
community has embraced technology with reasonable success. The Facsimile in the 1980‟s and
mobile telephones in the 1990‟s popularized modern technology in the mass market. Personal
computers and the Internet are also emerging as day-to-day business tools. These positive
indicators are favoring the prospects of e-commerce in Bangladesh.

 RMG Sector
 Banking on the Web (Online Banking)
 Online Shopping
 Web Hosting, Domain
 Online cards, gifts
 Pay Bill
 Education
 Etc.

Overview of implementation stage of e-Commerce in Bangladesh

Ministry of Commerce, Ministry of Information and Communication and Planning Commission
jointly implementing the e-commerce in Bangladesh
 There is e-Commerce committee headed by commerce secretary
 Ministry of Information and Communication is working for enacting a law regarding
“Electronic Transaction act”
 Online order from foreign buyer has started
 www.registrarofcompniesbangladesh.com here registration of joint stock company
started as online
 Online non-financial transaction has started by all bank from 31-7-2002
 Intra-bank transaction started from 31-7-2003
 Some bank already started credit card system in a limited way
 About 2 months Bangladesh Bank give permission of Ecommerce in local currency
through banks within the country.

Some e-Commerce shop in Bangladesh

www.webbangladesh.com
www.haatbazar.com
www.number1shop.com
 www.bdbazar.com
www.bengalcommerce.com
www.sonarmarketplace.com
www.upoharbd.com
www.bdgift.com
www.cellbazaar.com

The impact of e-Commerce

E-commerce can transform the way products and services are created, sold and
delivered to the customers. It can also change the way in which the company works with
its partners. The followings are well established benefits of e-commerce:
Improved productivity: Using e-commerce, the time required to create, transfer and
process a business transaction between trading partners is significantly reduced.
Furthermore human errors like duplication of records are largely eliminated with the
reduction of data entry and re-entry in the process. This improvement in speed and
accuracy plus the access to document and information will result in increase in
productivity.
Cost savings: The cost savings stem from efficient communication, quicker turnaround
and closer access to market.
Streamlined business process: Use of internet and with automation of business process
can make business more efficient
Better Customer service: Customer can enjoy the convenience of shopping at any hour
and anywhere in the world.
Opportunities for new business: Business over the internet have global customer reach.
There are endless possibilities for business to exploit and expand their customer base.
Constraints to E-Commerce in Bangladesh
Out of 64 districts, Internet services are available only in 6 major district headquarters. BTTB is
planning to gradually roll out an IP network up to the 64 district headquarters. In January 2002,
the Internet facilities were extended to 12 districts. The project is running on very fast and
today almost 40 plus districts are getting Internet facilities. Followings are the barriers of e-
commerce in Bangladesh:
• Very minimum number of users of web sites;
• Poor telecommunication infrastructure with limited fixed-line access, unreliable
connectivity and low bandwidth (9K);
• High price of computer and hardware: The per capita income of our people is
less than US$520. But in order to buy a computer it is needed US$500 and for
this reason, it is beyond the capacity for a villager’s to buy it.
• Lack of technically efficient personnel;
• Lack of investment in hardware and software;
• The banking infrastructure in terms of electronic payments and inter-bank
connectivity is poor. As such, the customers of 5770 branches of the local banks
are unable to operate their account with the other branches of the same bank.
Inter bank transaction is more cumbersome as the clearing-house of the central
bank is not online. An inter-bank transaction may take even 2 weeks if the
branches are different cities. Only branches of the private banks are
interconnected with their respective head offices. They are also satisfactorily
computerized. This represents only 25% of the entire banking sector.
• Small number of Credit Card users;
• Limitations of supportive legal system. Such as, exchange controls, protection of
telecommunication monopolies, restrictive trade practice and prohibitions;
• Absence of cyber law;
• People's mindset and very slow and expensive Internet services;
• Enterprise managers' lack of initiative and leadership in taking advantage of
ecommerce;
Challenges of E-commerce for Bangladesh
 Network Infrastructure
o Intra-bank and Inter-bank Connectivity
o Bank-Client Connectivity
o Security of transaction
 Banking mechanism
o Automation
o Convertibility of the Bangladesh currency
o Retention quota
o International credit cards
 Capacity Building: Human, Technical and Regulatory
o Quick Settlement, Online credit Information, Skilled e-Manpower, Regulatory
Framework
 Investment
 Legal Infrastructure
 Currency Convertibility: Access to Global Finance
 E- Culture

Recommendations
The assessment of the e-commerce environmental forces of Bangladesh leave us some room to
recommend some steps and measures, that should be undertaken by the policy makers and
business stake holders for the full fledged implementation and development of e-commerce in
Bangladesh. The recommendations are:
 There should be an EFT (Electronic Fund Transfer) Gateway, which will connect all
finance and banking institutions, ATMs, POS and related websites. Such Gateway will
speed up the transactions among banks, commercial institutions. This sort of
infrastructure needs to be implemented on priority basis.
 A CCG (Credit Card Gateway) should be established. A credit card gateway is a server
that makes online credit card transactions safe (Skinner, 2005). The software protocols
in the CCG use the information provided to check for availability of funds and to make
sure the credit card is not expired, lost or stolen. This takes only seconds. When the
transaction is approved a receipt is generated for the customer, and the funds are
transferred to the vendor's bank account through EFT.
 Unlicensed radio frequencies should be made available on demand and VSAT operating
licenses should not limit the bandwidth.
 To improve banking mechanism, Bangladesh government should compel the banking
sectors to automate their operation and going online by a specific period. The control of
foreign exchange should be liberalized gradually, and easier issuance of International
Credit Cards should be allowed, banks should take effective steps here.
 Business associations and organizations should be made aware of the benefits of e-
commerce. Business organizations like FBCCI, DCCI, MCCI, and BGMEA can play a
significant role in promoting e-commerce in Bangladesh.
 Political commitment to improve governance and institutional strength is essential for
successful application of e-commerce.
 Last but not least, National ICT policy, 2002 and enactment of the ICT Act, 2005 is
required to enhance the implementation of e-commerce.