E-Commerce can be Bangladesh’s next growth engine - if policy keeps pace

Bangladesh's e-commerce sector has emerged over the past decade as a key driver of the country's digital economy. Valued at approximately US $6.9 billion in 2023, the market reached nearly US $7.5 billion in 2024 and expected to reach US $9.8 billion by 2028.  

Yet, online sales still account for only 3–5 percent of total retail —a reminder of both the immense opportunity ahead and the fragility of an industry still in its early stages.

The journey began under challenging conditions. With a very limited knowledge on how it works, consumer trust in online shopping was low. Payment systems were limited, logistics networks were not e-commerce friendly, and very few sellers understood how to build or sustain an online sales model. Establishing a foundation for growth required global expertise, local innovation, and years of patient investment.

Many companies came forward to embrace these challenges. Daraz, who stands as the single largest high-tech industry investment in the local market, built Daraz Express (DEX), one of the country's most advanced logistics networks, delivering products to remote districts from Rangpur to Cox's Bazar within days. ShopUp (REDX) has strengthened last-mile delivery, Chaldal scaled online grocery, Shajgoj built trust in beauty and lifestyle categories, and Pickaboo and Bikroy diversified offerings. Together, these companies, supported by fintech operators like bKash, Nagad, Rocket, Visa, and Mastercard, have shaped a more resilient and inclusive digital marketplace.

Through Daraz online learning platform provided by Daraz for its seller community, thousands of sellers—many from rural and semi-urban backgrounds—have been trained in digital literacy, marketing, and online operations. The platform has also invested heavily in technology, improving most user-friendly app performance, automated inventory management, and developing tools that make it easier for SMEs to sell online. Initiatives like Seller Connect and Early Bird programs, have further expanded opportunities for entrepreneurs.

 The impact is visible in jobs and inclusion. During the pandemic alone, e-commerce generated nearly 200,000 jobs across delivery, logistics, warehousing, technology, and customer service also rehabilitation of the offline seller who were stuck home for movement restriction. Today, the sector directly supports tens of thousands of roles, with projections of up to half a million additional jobs over the next five years. Millions of customers now shop online for essentials, while SMEs increasingly treat e-commerce as their primary income channel. Formal digital payments are also rising, card-based e-commerce transactions reached about Tk 20.35 billion in February 2025, which is up 23.6% year-on-year, even though cash-on-delivery still dominates.

The journey was not very smooth, it was like roller-coaster ride. High-profile failures—Evaly, E-Orange, Alesha Mart, and Dhamaka Shopping and some other e-commerce platforms shook consumer confidence. To restore trust, organized players such as Daraz, Chaldal etc introduced safeguards with stricter seller vetting, clear refund mechanisms, robust customer support, and expanded digital payment options. Its continuous investment in logistics infrastructure and service quality also improved fulfillment for both sellers and consumers, reflecting its long-term commitment in building a sustainable e-commerce ecosystem. These measures, while not eliminating risk, demonstrated that structured, compliant platforms can provide stability even in turbulent times.   At the same time, the ecosystem's steady development underscores a broader trend. Consumer demand is clearly shifting toward digital commerce. SMEs are not only adapting but embracing digitalization faster than ever, recognizing online platforms as essential to business growth.

Despite progress, significant challenges remain. A sharp increase in VAT on commissions from 5 percent to 15 percent, place heavy burden on SMEs. The absence of a finalized cross-border e-commerce policy prevents consumers from accessing global assortments and limits potential government revenue. Internet penetration, at only 44.5 percent in early 2025, leaves more than half the population offline. Without addressing these gaps in infrastructure, taxation, and regulation, growth will remain constrained.

Foreign Direct Investment (FDI) has been playing a critical role here. Bangladesh achieved record number of quarterly FDI inflows in early 2025, and digital commerce is firmly on the radar of global investors. Strategic foreign investment has already shown how expertise transfer, infrastructure development, and workforce upskilling can accelerate entire industries—just as the garments sector did decades ago. With the right policy environment, e-commerce has the potential to become Bangladesh's next globally competitive industry.

 E-commerce is more than a digital marketplace; it is a network of consumers, SMEs, delivery riders, fintech operators, warehouse teams, and software professionals, all are connected to its growth. The policy decisions made today—on infrastructure, taxation, cross-border trade, and FDI will determine whether Bangladesh seizes this opportunity or allows it to stall.

The foundation has been laid through a decade of investment and innovation. What remains is to give the sector clear and enabling policy support, so it can grow sustainably, create more than half a million new jobs, expand financial inclusion, and serve as one of the pillars of Bangladesh's digital future.

Md. Sayed Ali is the Administrator of E-commerce Association of Bangladesh (e-CAB)