List of Contents

Serial Content
Number
1 Introduction to E- Commerce
2 History of E-Commerce
3 Models of E- Commerce
4 E- Commerce Applications & Strategy
5 Popular gateway & Trade Cycle of E-
Commerce
6 Electronic Data Interchange ( EDI)
7 Electronic Payment Systems ( EPI)
8 Status of E-Commerce in Bangladesh
9 Opportunities & Challenges of E-Commerce
in Bangladesh
 E- Commerce
1)Introduction: Electronic commerce, commonly written as e-commerce or e-Commerce, is
the trading or facilitation of trading in products or services using computer networks, such as
the Internet or online social networks. Electronic commerce draws on technologies such as
mobile commerce, electronic funds transfer, supply chain management, Internet marketing,
online transaction processing, electronic data interchange (EDI), inventory management
systems, and automated data collection systems. Modern electronic commerce typically uses
the World Wide Web for at least one part of the transaction's life cycle although it may also
use other technologies such as e-mail.
E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or
the transmitting of funds or data, over an electronic network, primarily the internet. These
business transactions occur either as business-to- business, business-to-consumer, consumer-
to-consumer or consumer-to- business. The terms e-commerce and e-business are often used
interchangeably. The term e-tail is also sometimes used in reference to transactional processes
for online shopping.
Electronic commerce (ecommerce) is a type of business model, or segment of a larger
business model, that enables a firm or individual to conduct business over an electronic
network, typically the internet. Electronic commerce operates in all four of the major market
segments: business to business, business to consumer, consumer to consumer and consumer
to business. It can be thought of as a more advanced form of mail-order purchasing through a
catalog. Almost any product or service can be offered via ecommerce, from books and music
to financial services and plane tickets.
Ecommerce allows consumers to electronically exchange goods and services with no barriers
of time or distance. Electronic commerce has expanded rapidly over the past five years and is
predicted to continue at this rate, or even accelerate. In the near future the boundaries
between "conventional" and "electronic" commerce will become increasingly blurred as more
and more businesses move sections of their operations onto the Internet.
E-commerce businesses may employ some or all of the following:
• Online shopping web sites for retail sales direct to consumers
• Providing or participating in online marketplaces, which process third-party
• business-to-consumer or consumer-to-consumer sales
• Business-to-business buying and selling
• Gathering and using demographic data through web contacts and social media
• Business-to-business electronic data interchange
• Marketing to prospective and established customers by e-mail or fax (for example,
with newsletters)
• Engaging in pretail for launching new products and services
• Online financial exchanges for currency exchanges or trading purposes.

2)History of E-commerce
The beginings of e-commerce can be traced to the 1960s, when businesses started
usingElectronic Data Interchange (ED) to share business documents with other companies. In
1979, the American National Standards Institute developed ASC X12 as a universal standard
for businesses to share documents through electronic networks. After the number of
individual users sharing electronic documents with each other grew in the 1980s, in the 1990s
the rise of eBay and Amazon revolutionized the e- commerce industry. Consumers can now
purchase endless amounts of items online, both from typical brick and mortar stores with e-
commerce capabilities and one another.
A timeline for the development of e-commerce:
1971 or 1972: The ARPANET is used to arrange a cannabis sale between students at the
Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of Technology,
later described as "the seminal act of e-commerce" in John Markoff's book What the
Dormouse Said.
1979: Michael Aldrich demonstrates the first online shopping system. 1981: Thomson
Holidays UK is the first business-to-business online shopping system to beinstalled.
1982: Minitel was introduced nationwide in France by France Télécom and used for online
ordering.
1983: California State Assembly holds first hearing on "electronic commerce" in Volcano,
California 15 Testifying are CPUC, MCI Mail, Prodigy, CompuServe, Volcano Telephone,
and Pacific Telesis. (Not permitted to testify is Quantum Technology, later to become AOL.)
1984: Gateshead SIS/Tesco is first B2C online shopping system and Mrs Snowball, 72, is the
first online home shopper 1984: In April 1984, CompuServe launches the Electronic Mall in
the USA and Canada. It is the first comprehensive electronic commerce service.
1990: Tim Berners-Lee writes the first web browser, Worldwide Web, using a NeXT
computer.
1992: Book Stacks Unlimited in Cleveland opens a commercial sales website
(www.books.com) selling books online with credit card processing.
1993: Paget Press releases edition No. 3 [19] of the firsticitation needed AppWrapper [11]
app store, The Electronic
1994: Netscape releases the Navigator browser in October under the code name Mozilla.
Netscape 1.0 is introduced in late 1994 with SSL encryption that made transactions secure.
1994: Ipswitch IMail Server becomes the first software available online for sale and
immediate download via a partnership between Ipswitch, Inc, and OpenMarket
1994: "Ten Summoner's Tales" by Sting becomes the first secure online purchase through Net
Market.
1995: The US National Science Foundation lifts its former strict prohibition of commercial
enterprise on the Internet.
1995: Thursday 27 April 1995, the purchase of a book by Paul Stanfield, Product Manager
for CompuServe UK, from WH Smith's shop within CompuServe's UK Shopping Centre is
the UK's first national online shopping service secure transaction. The shopping service at
launch featured WH Smith, Tesco, Virgin Megastores/Our Price, Great Universal Stores
(GUS), Interflora, Dixons Retail, Past Times, PC World (retailer) and Innovations.
1995: Jeff Bezos launches Amazon.com and the first commercial-free 24-hour, internet-only
radio stations, Radio HK and NetRadio start broadcasting, eBay is founded by computer
programmer Pierre Omidyar as Auction Web.
1996: India MART B2B marketplace established in India.
1996: EC Plaza B2B marketplace established in Korea.
1998: Electronic postal stamps can be purchased and downloaded for printing from the Web
1999: Alibaba Group is established in China. Business.com sold for US $7.5 million to e-
Companies, which was purchased in 1997 for US $149,000. The peer-to-peer file sharing
software Napster launches. ATG Stores launches to sell decorative items for the home online.
2000: The dot-com bust.
2001: Alibaba.com achieved profitability in December 2001.
2002: eBay acquires PayPal for $1.5 billion. [15] Niche retail companies Wayfair and Net
Shops are founded with the concept of selling products through several targeted domains,
rather than a central portal.
2003: Amazon.com posts first yearly profit.
2003: Bossgoo B2B marketplace established in China.
2004: DHgate.com, China's first online b2b transaction platform, is established, forcing other
b2b sites to move away from the "yellow pages" model. [16]
2007: Business.com acquired by R.H. Donnelley for $345 million, [17]
2009: Zappos.com acquired by Amazon.com for $928 million. [18] Retail Convergence,
operator of private sale website RueLala.com, acquired by GSI Commerce for $180 million,
plus up to $170 million in earn-out payments based on performance through 2012 (19)
2010: Groupon reportedly rejects a $6 billion offer from Google. Instead, the group buying
websites went ahead with an IPO on 4 November 2011. It was the largest IPO since Google.
2014: Overstock.com processes over $1 million in Bitcoin sales. [22] India's e-commerce
industry is estimated to have grown more than 30% from 2012 to $12.6 billion in 2013.25 US
e-commerce and Online Retail sales projected to reach $294 billion, an increase of 12 percent
over 2013 and 9% of all retail sales. [24] Alibaba Group has the largest Initial public offering
ever, worth $25 billion.
2015: Amazon.com accounts for more than half of all ecommerce growth, 125 selling almost
500 Million SKU's in the US.
3) E-Commerce Models

The term “model of e-commerce” refers to the framework or structure of an online business
that defines how it operates and interacts with users and other businesses. It encompasses the
strategies, operations, and technologies a business uses to conduct transactions over the
internet.
The types of e-commerce models are generally categorised based on the nature of the
participants involved in the transactions. E-commerce has evolved to include a variety of
business models, each catering to different types of transactions and relationships between
entities involved in the online marketplace. Here are the primary models of E-commerce:

1. Business to Consumer (B2C): This is the most common model, where businesses sell
goods or services directly to consumers online. Examples include online retailers like
Amazon where we can purchase a wide variety of products from electronics to
clothing.

2. Business to Business (B2B): In this model, transactions occur between two

businesses, such as a manufacturer and a wholesaler, or a wholesaler and a retailer.

3. Consumer to Consumer (C2C): Platforms like eBay and Craigslist facilitate

transactions between consumers, allowing individuals to sell goods and services to
each other.

4. Consumer to Business (C2B): This model is where individuals sell products or

services to businesses, such as freelance work or stock photography.

5. Business to Administration (B2A): This involves transactions made between

companies and public administration or government entities. An example is Gov. UK,
provides a platform for business to sort out tax affairs.
 6. Consumer to Administration (C2A): Similar to B2A, this model covers all
transactions between individuals and public administration. For example, paying for
municipal services online falls under this category.

7. Direct to Consumer (D2C): Brands sell directly to consumers without going through a
retailer, distributor, or wholesaler.

8. Business to Business to Consumer (B2B2C): This model combines B2B and B2C for
a complete product or service transaction.

Therefore here are another nine different e-Commerce business models (without talking
numbers):

● The Single Brand. This is when a brand decides to create its own e-Commerce site, à
la Hermès or Louis Vuitton.

● Marketplace. An e-Shopping Mall with multiple brands and categories. Examples:

Amazon, eBay, Price Minister, LeBonCoin. Many outfits have chosen to outsource
their e-Commerce logistics to the Amazon platform, including some of the bigger
players in the past (such as Target, Toys R Us, Borders…).

● Vertical marketplace. An e-Shopping mall on a specific segment. Examples: Zappos

(shoes), Diapers.com, OneStopPlus (plus size fashion).

● Community marketplace. Built around a lifestyle, a community marketplace

involves identifying and galvanizing a shared mindset. Examples: Etsy,
Craigslist,ModCloth (Indie/Retro/Vintage clothing), SkullCandy (earphones &
headphones).

● Flash Sell marketplace. The concept is creating pent up demand to be bought at

specific time slots, and sometimes in limited series. The majority of flash sell
concepts seem to be concentrated on fashion. Examples: Ideeli, VentePrivee, Gilt
Group, HauteLook.

● Crossover. A blend of Brick & Click stores. Examples: Lavinia (wine), FarFetch
(independent fashion labels), Cyrillus (fashion)… and, of course, we can say the same
for all major distribution chains with their own eCommerce site (à la Walmart,
Carrefour, etc.).
 ● Personalization. The online nature of sites allows for a greater ease of personalization.
Examples: There are a number of variations on this theme. In the tech space, you can
order a custom-built computer with DELL or Apple (where you can also order your
name on the back of your ipod). In design or interior decoration, you have Made or
MyFab. Or again ShirtsmyWay orDesignYourOwnDishes (coming soon).

● Immaterial going Physical. In other words, making an electronic version into

something real. Examples abound: Other than the likes of foto.com, shutterfly and
snapfish that turn your digital photos into photo albums and personal calendars, you
have Blurb to print your own book, Flipstory to convert YouTube videos into real flip
books, or again TasteBook to create personalized recipe books.

● Facebook or Social Commerce. Putting up an f-Commerce site is another option, still

largely uncharted and unproven. Examples of note: Asos, 1-800-Flowers, Coca-Cola,
Mark.girl Cosmetics. You also have some companies doing partial offers on
Facebook, such as Victoria Secrets which have used their fan page to offer gift
vouchers.

These models can be adapted or combined based on the specific needs and goals of a
business, and they continue to evolve with technological advancements and changing
consumer behaviours. Understanding these models can help in identifying the right approach
for starting or growing an online business.

● E Commerce application and Strategy

● Popular gateway and trade cycle of E Commerce

4) What is an E-commerce application?

● eCommerce or electronic commerce is when a transaction occurs using
the internet. An example is when a customer (the buyer) purchases one or
more products or services online from a virtual storefront (the seller).
eCommerce applications or e-commerce apps are design patterns of
functionality needed to list items for purchase, facilitate a transaction by
accepting payment methods, and initiate fulfillment of those purchases.

● Mobile e-commerce applications and shopping apps also function as

marketing tools when they allow for paid strategic placement of items for
sale or use push notifications to market products. Mobile app
development for e-commerce is also sometimes called m-commerce or
mCommerce.
 ● Transactions that occur in the eCommerce industry can usually be
classified as business-to-consumer (B2C), consumer-to-consumer, or
business-to-business (B2B). eCommerce apps are optimized around the
buyer and seller relationship. These categories are a way to break down
the different types of eCommerce app experiences in the eCommerce
industry and the various applications of e-commerce.

Business to Consumer (B2C) eCommerce applications

A business-to-consumer eCommerce application is the e-commerce app

equivalent to a virtual retail store. These are often called online retailers. These
applications will have items listed for sale, usually have a ‘shopping cart’ or
equivalent, handle transactions at checkout, and either ship the items or trigger
fulfillment if they were listing items from 3rd party businesses.

An example of a business-to-consumer eCommerce application would be

Amazon.com’s web application or e-commerce mobile app. Amazon’s e-
commerce store shows listings from multiple sellers and business owners in a
customer-friendly way that makes it easy to find and purchase items.

Consumer to Consumer eCommerce applications

A consumer-to-consumer e-commerce platform user experience is optimized for

consumers to sell and buy items from other consumers. This type of eCommerce
site or mobile e-commerce application acts as a middleperson for transactions
(accepting credit cards or PayPal) and as a mediator for disputes. This makes
buying items or services online more user-friendly and it also makes it more
accessible for anyone to sell items in an online store.

eBay.com is an example of an e-commerce website that is well-known for this

business model. eBay takes its online business even further by enabling sellers
to have real-time online bidding on items listed.

Live marketplaces with real-time bidding offer an online shopping experience

that is more competitive and can deliver more revenue than other e-commerce
business strategies. Sometimes these e-commerce apps also link with social
media for extra competitive value (and it’s a good marketing strategy for online
retailers).

You can build your own startup e-commerce market using PubNub. You can
make a live-action platform where users can bid on the products available. Our
open-source Real-Time Auction Demo shows an app design and app ideas that
highlight how you can rely on PubNub for fast application development of e-
commerce applications and e-commerce mobile apps.

Business-to-Business (B2B) eCommerce applications

Business-to-Business eCommerce applications are developed around the unique

needs that businesses have when selling to other businesses. When a business
makes a purchase it often is establishing an ongoing relationship or contract
with another business. Businesses also are positioned to negotiate and need
more communication with the seller before making a large purchase. These
types of e-commerce stores have a marketing strategy that targets businesses
and features to make it easier to conduct online business.

Because of these requirements, your e-commerce app development will also

need product features to facilitate entrepreneurs’ business-to-business
relationships in your online store. PubNub can help with chat features and push
notifications - so you can easily build your own business e-commerce market.

Alibaba is an example of an e-commerce platform for business-to-business

eCommerce apps. Alibaba started by launching a simple marketplace catalog
website for small Chinese manufacturers and exporters for international selling.
Alibaba is considered to be a leader in the eCommerce and mobile commerce
industry globally.

What Is E-Commerce Strategy?

An e-commerce strategy is an organized set of plans or tactics that help your
business sell products or services online. It takes a strategic approach to
marketing your offerings so you can drive traffic, convert visitors into
customers and retain them once they’ve made a purchase. The right e-commerce
strategy depends on a number of factors, such as your particular target audience,
branding and customer experience standards. That’s why it’s important to tailor
your strategy to meet your unique goals.

Why E-Commerce Strategy Is Important

There are a variety of reasons why an e-commerce strategy is not an option but
a necessity in today’s increasingly competitive digital marketplace. A strong e-
commerce strategy can do the following:

1. Strengthen Your Brand

As you ideate your business concept, your brand is crucial as it gives you an
identity and allows you to build relationships with your audience and eventually
land new customers while retaining current ones. An e-commerce strategy that
aligns with your brand can improve the way visitors perceive your business and
position you as a leader in your industry.

2. Attract New Customers

With an e-commerce strategy, you can gain new customers and in turn, increase
revenue. There are several tactics that will enable you to ensure the ideal
prospective buyers not only land on your online store but take action and make
a purchase.

3. Retain Current Customers

Research shows that it’s more expensive to acquire a new customer than to
retain an existing one. An e-commerce strategy is a great way to transform one-
time buyers into repeat buyers who choose you over your competitors.

4. Understand Your Target Audience

It can be difficult to improve your online store if you don’t know what’s
working and what’s not. With an e-commerce strategy, you’ll be able to view
data related to your target audience and their actions. You can use this
information to make changes and improvements as needed.

5. Boost Revenue

At the end of the day, you’re in business to make money. As long as it’s well
thought out and implemented, an e-commerce strategy can help you identify
inefficiencies and create an exceptional online shopping experience that
increases your revenue and improves your bottom line.

6.User experience (UX): Your online store should be easy to navigate,

visually appealing, and optimized for mobile devices. People should be
able to find what they're looking for quickly and complete purchases
effortlessly.

5)Popular Gateway of e Commerce

Popular Payment Gateways in E-Commerce

Payment gateways are crucial for processing online transactions securely and
efficiently. Here are some of the most popular payment gateways in e-
commerce:

1. PayPal:
○ Overview: One of the most widely used payment gateways
globally, PayPal allows customers to make payments using their
PayPal balance, bank accounts, or credit cards.
○ Features:
■ Supports multiple currencies.
■ Buyer and seller protection programs.
■ Easy integration with e-commerce platforms.
2. Stripe:
○ Overview: Stripe is known for its developer-friendly tools and
powerful APIs, making it a popular choice for businesses that
require customized payment solutions.
○ Features:
■ Supports recurring billing and subscription services.
■ Advanced security features and fraud detection.
■ Global reach with support for various currencies and
payment methods.

E -Commerce Trade Cycle

The e-commerce trade cycle refers to the complete process from the initiation of
an online transaction to its completion. It typically includes the following
stages:

 Pre-Sale Activities:
○ Product Search and Discovery:
■ Customers browse the e-commerce site to find products of
interest. This stage is facilitated by effective search engines,
product categories, and personalized recommendations.
○ Product Selection:
 ■ Detailed product descriptions, images, reviews, and
comparisons help customers make informed decisions.
 Ordering Process:
○ Cart Management:
■ Customers add selected items to their shopping cart, review
the cart, and make any necessary adjustments.
○ Checkout Process:
■ Customers enter their shipping details, select payment
methods, and review order summaries before finalizing the
purchase.
 Payment:
○ Payment Gateway Integration:
■ The chosen payment gateway processes the transaction
securely. This includes authorizing the payment and ensuring
funds are transferred from the customer's account to the
merchant's account.
 Order Fulfillment:
○ Inventory Management:
■ The order is confirmed, and the inventory system updates
stock levels accordingly.
○ Packing and Shipping:
■ The product is packed and shipped to the customer. This
stage may include providing tracking information to the
customer.
 Post-Sale Activities:
○ Delivery Confirmation:
■ The customer receives the product, and the merchant may
request delivery confirmation.
○ Customer Support:
■ After-sales support, such as handling returns, refunds, and
addressing customer inquiries, ensures customer satisfaction.
 Feedback and Review:
○ Customer Reviews:
■ Customers are encouraged to leave reviews and feedback,
which can influence future purchasing decisions of other
customers.
○ Data Analysis:
 ■ Merchants analyze sales data, customer behavior, and
feedback to improve their products, services, and overall
customer experience.

6) Electronic Data Interchange (EDI)

 EDI (Electronic Data Interchange) is the transfer of data from one computer system to
another by standardized message formatting, without the need for human intervention.
EDI permits multiple companies -- possibly in different countries -- to exchange
documents electronically. Data can be exchanged through serial links and peer-to-
peer networks, though most exchanges currently rely on the Internet for connectivity.

 An EDI message contains a string of data elements, each of which represents a

singular fact, such as a price, product model number, and so forth, separated
by delimiter. The entire string is called a data segment. One or more data segments
framed by a header and trailer form a transaction set, which is the EDI unit of
transmission (equivalent to a message). A transaction set often consists of what would
usually be contained in a typical business document or form.
 When sending an EDI document, both parties and trading partners must adhere to the
same set of rules. These standards define where and how the information from the
document will be found. Translation software processes the information differently
for sent and received messages and performs a complete audit of each step to ensure
information is sent or received in EDI format. When the translator on the receiving
computer reads a document, it knows where to find the buyer's company name, order
number, purchase items and price, for example. This information is then sent to the
receiver's order entry system without necessitating manual order entry.
 EDI applies to documents such as purchase orders, invoices, shipping notices and
commission sales reports, as well as other important or classified information. For
example, an insurance company can verify that an applicant has a driver's license
through an EDI exchange.

 EDI is primarily used by large companies to have a uniform processing system,

enabling efficiency. Cost, speed, accuracy and efficiency are the major benefits of
EDI. The system is expensive to implement and usually requires help from a
consultant that specializes in the field.
 EDI competes with XML, which relies on tags to organize data. It can also compete
withapplication programming interfaces -- code that allows two software programs to
communicate. While similar to EDI, API lacks a standard for users, making it hard for
different businesses to share information via APIs.
 Using EDI systems eliminates the need -- and therefore cost -- to print, file, store, post
and retrieve paper documents. The goal is to get rid of paper and have everyone
working with the same invoice so that information is processed and read easily.
 Some users, such as doctors transmitting healthcare information, may find EDI more
burdensome than paper, but the standardization and electronic conversion pays
dividends in the long run.
 Automating paper-based tasks improves data quality, and transactions are exchanged
within seconds or minutes instead of days or weeks. EDI frees up staff time to work
on more important tasks. Business-critical data is sent on time and tracked in real time
by automating the transfer of data among applications across a supply chain.
 Different EDI standards address the needs of specific industries or regions or other
specifications. ANSI ASC X12 (X12) is routinely used in the U.S.,
and EDIFACT (Electronic Data Interchange for Administration, Commerce and
Transport) is used outside of the U.S. Also, numerous other standards relate to
specific industries, such as VDA for the German automotive industry.
 The Data Interchange Standards Association (DISA), a company that develops and
proliferates the standards for interchanging electronic business across multiple
industries, supports ASC X12. X12. Three times a year, X12 members work together
across various industry verticals such as finance and healthcare to develop new
versions of the standard.

Types of EDI systems

 Different types of EDI are implemented to suit the business's needs, capabilities and
budget -- assisting multiple consistent business partners, supporting partners around
the globe or in other situations. Methods include Direct EDI (point-to-point); EDI via
VAN or EDI network services provider; EDI via E S2; EDI via FTP/VPN, SFTP or
FTPS; Web and Mobile EDI; and EDI outsourcing.
 Direct EDI: With Direct EDI, one connection is created between two business
partners. Larger businesses might choose this method if they have numerous
transactions with the same partner per day.
 EDI via VAN (value-added network), EDI Network Services Provider: This model
protects businesses from the complications that come from supporting the many
communication protocols that are required when dealing with multiple business
partners. It is a secure network where documents are transmitted between business
partners.
 EDI via Applicability Statement version 2 (AS2): This communications protocol
securely exchanges data over the Internet. Two computers (a client and a server)
connect in a point-to-point mode through the Internet. AS2 is sent securely in an
envelope that uses digital certificates and encryption.
 EDI via FTP/VPN, SFTPS, FTPS: File Transfer Protocol (FTP) over Virtual Private
Network (VPN), Secure File Transfer Protocol (SFTP) or File Transfer Protocol
Secure (FTPS) exchange documents through the Internet, connecting business
partners directly. These protocols encode data during transmission from one business
to the other, to protect sensitive information. Data are decrypted upon arrival.
 Web EDI: EDI is directed via Internet browser, duplicating paper-based documents
into Web forms that contain fields where users enter information. It is then
automatically converted into an EDI message and sent via secure Internet protocols.
 Mobile EDI: This method enables the transmission of documents through mobile
devices.
 Managed Services: Managed services systems outsource the EDI document control
to a third-party provider.
 Business needs and processes determine which EDI system to implement. Before
moving to EDI in your organization, establish a managerial structure. Members of the
team should have EDI and executive experience. Next, set priorities for adoption and
then analyze which areas of the business will benefit most from EDI. Select an EDI
network provider that focuses on your business necessities. Then, assimilate EDI and
data into the business.
 To outline how the data in the EDI transaction correlates to the data in the internal
system, create a map that will determine where each incoming field goes and if the
data needs to be reformatted. Test the system before implementing it.
7) Electronic Payments System (EPS)

 An electronic payments system (EPS) is a method of transferring monetary value

from one entity to another through digital means. This system leverages electronic
networks, such as the internet, mobile networks, and banking infrastructures, to
facilitate transactions without the need for physical cash.
 How it Works
 User Account Creation: Users sign up and link their bank accounts, credit, or debit
cards to their PayPal account.
 Making Payments: Users can make payments by selecting PayPal at checkout,
logging into their account, and confirming the payment
 Receiving Payments: Businesses or individuals can receive payments directly into
their PayPal account, which can then be transferred to a linked bank account.
 Methods of electronic payments
 1.Digital Wallets
 Description: Digital wallets, or e-wallets, are software applications that store users'
payment information, such as credit card numbers and bank account details, allowing
for quick and easy transactions online or in-store. They often support additional
functionalities like loyalty programs, ticket storage, and more
 Examples
 PayPal: Enables users to send and receive money online securely. It's widely accepted
by online retailers and services.
 Apple Pay: Allows users to make payments in stores, within apps, and on the web
using their Apple devices.
 2. Credit and Debit Cards
 Description: These are physical or virtual cards issued by banks or financial
institutions that allow the cardholder to make payments or withdraw cash. Credit
cards enable borrowing funds up to a certain limit, while debit cards draw directly
from the user’s bank account
 Examples:
 Visa and MasterCard: Both offer global networks for processing credit and debit card
transactions
 American Express: Known for its credit cards that offer rewards and benefits.
 3. Online Banking
 Description: Online banking provides customers with electronic access to their bank
accounts, allowing them to perform a variety of financial transactions over the
internet. This includes checking balances, transferring money, paying bills, and more.
 Examples:
 Chase Online Banking: Offers comprehensive online banking services, including bill
payment, fund transfers, and account management.
 HSBC Personal Internet Banking: Allows users to manage their accounts, transfer
funds, and pay bills online.
 4. Mobile Payments
 Descriptions:Mobile payment systems allow users to make payments using their
mobile devices, often through dedicated apps or SMS. These systems can be used for
both online and in-person transactions.
 Examples:
 Venmo: A mobile payment service that allows users to transfer money to one another
using a mobile app
 .M-Pesa: A mobile money service in Kenya that allows users to deposit, withdraw,
transfer money, and pay for goods and services via a mobile phone.
 5. Electronic Funds Transfer (EFT)
 Description: EFT involves the direct transfer of funds from one bank account to
another through electronic means. This is commonly used for payroll deposits, direct
debits, and bill payments
 Examples:
 Automated Clearing House (ACH): Used in the United States for various types of
EFT transactions, including direct deposits and bill payments.
 SEPA (Single Euro Payments Area): Enables cross-border transfers within Europe
 6. Cryptocurrency
 Description: Cryptocurrencies are digital or virtual currencies that use cryptography
for security. They operate on decentralized networks based on blockchain technology.
 Examples:
 Bitcoin: The first and most well-known cryptocurrency, used for both investment and
transactions.
 7. Payment Gateways
 Description: Payment gateways are services that facilitate online transactions by
acting as intermediaries between the merchant and the customer’s payment method.
They authorize and process payments securely
 Examples:
 Stripe: A comprehensive payment processing platform for internet businesses.Square:
Provides POS solutions and payment processing for small businesses.
 Benefits of Electronic Payment Systems
 Speed and Efficiency: Transactions are processed quickly, often in real-time
 Convenience: Users can make payments from anywhere, at any time.
 Security: Enhanced security measures, such as encryption and tokenization, protect
sensitive data.
 Cost-Effectiveness: Reduces the need for physical infrastructure and lowers
transaction costs.
 Accessibility: Broadens access to financial services, especially in regions with limited
banking infrastructure.
 Challenges of electronic payments system
 Security Risks:Vulnerable to cyber-attacks, fraud, and identity theft.Requires robust
security measures such as two-factor authentication and encryption
 Privacy Concerns:Involves the collection and storage of personal data, raising
privacy issues.
 Accessibility:Relies on internet access and digital literacy, which may not be
available to all users.
 Regulatory Compliance:Must comply with various financial regulations and
standards, which can vary by country.
 Future Trends
 Biometric Authentication:Use of fingerprints, facial recognition, and other
biometrics for secure transactions.
 Blockchain Technology:Increasing adoption for secure and transparent transaction
processing
 Artificial Intelligence:Enhancing fraud detection and personalized financial services
through AI and machine learning.
  Internet of Things (IoT):Integration of payment capabilities into everyday devices
for seamless transactions.
 Electronic payment systems are continuously evolving, driven by technological
advancements and changing consumer preferences. They play a crucial role in modern
commerce, shaping how transactions are conducted across the globe.

8) Status of E-commerce in Bangladesh

The e-commerce sector in Bangladesh has experienced significant growth in recent years and
is expected to continue expanding rapidly. As of 2024, Bangladesh is the 31st largest market
for e-commerce globally, with a projected revenue of approximately $10.96 billion, and it is
anticipated to grow to about $25.24 billion by 2028, reflecting a compound annual growth
rate of 23.2% (ecommerce markets.bd)
This growth has been driven by several factors, including the increasing adoption of mobile
financial services (MFS) and the shift towards online shopping accelerated by the COVID-19
pandemic. The use of MFS has particularly boosted the recovery and growth of small
businesses, enabling easier transactions and contributing to higher sale.(Dhaka tribune -
2023).
Bangladesh Mobile Consumer Association, an organization associated with the e-commerce
sector, estimates that the e-commerce market in Bangladesh will be worth Tk 150,000 crore
in 2026. According to the organization, currently the e-commerce market in the country is 3
billion US dollars. About 25 thousand crores in domestic money. According to the
commercial company Research and Market.com, the market of e-commerce in the country in
2026 will be 1 lakh 50 thousand crores. It may increase further. Because only 1.3 percent of
the country buys products from e-commerce. (Bangladesh Bulletin, 5 February – 2024)
But the number of internet users in the country is 13 crore. However, there are some doubts
as well. That is the fear of fidelity. Because according to the organization, currently 32 e-
commerce companies in Bangladesh owe Tk 531 crore to customers. Among them, 18
companies did not refund the customer's money. 387 crore rupees have been refunded to the
customers. And due to the return of 144 crore taka, the affected customers are wandering
around. People will lose interest in online shopping if customers continue to be cheated. So
be more careful in this place. E-commerce market in Bangladesh is about 3 billion USD.
About 25 thousand crore rupees in local currency. E-commerce accounts for only 1.5 percent
of the country's total retail sales. Within the Asian continent, this rate is about 7 percent in
India, 14 percent in Indonesia, 30 percent in China.( Bangladesh Bulletin, 5 February –
2024)
The e-commerce market has already emerged as a promising sector in the past few years due
to the expansion of technology around the world, which has only been accelerated by the
corona virus. E-commerce is the need of the hour. Nowhere is the necessary time given to
our workload. That's when e-commerce is needed. Avoiding all the hassles and arriving at
our doorstep, the product is on demand.
 9) Opportunities and Challenges of E-commerce in Bangladesh
E-commerce in Bangladesh has seen significant growth, particularly in recent years. The
sector presents numerous opportunities but also faces several challenges. Here’s an overview:
E-commerce in Bangladesh has been experiencing significant growth, driven by a variety of
factors that present numerous opportunities for businesses and consumers alike. Here are key
points illustrating these opportunities:

1. Growing Internet and Mobile Penetration: Bangladesh has seen a substantial increase in
internet and mobile phone usage over the past decade. With over 120 million mobile phone
users and more than 110 million internet subscribers, the digital infrastructure is rapidly
expanding.
- Example: The rise of mobile internet users allows companies like Daraz and Chaldal to
reach a wider audience through their mobile apps, making online shopping more accessible to
people in urban and rural areas alike.
2. Employment Generation:
- Explanation: The e-commerce sector in Bangladesh has created numerous job
opportunities in various fields such as IT, customer service, delivery logistics, and digital
marketing.
- Example: Companies like Pathao and Sheba.xyz have created thousands of jobs for
delivery personnel and customer service representatives, significantly contributing to the
local economy and reducing unemployment rates.
3. Young and Tech-Savvy Population:
- Explanation: Bangladesh has a young demographic, with a significant portion of the
population being under 35 years old. This age group is generally more comfortable with
technology and online shopping.
- Example: Platforms like Pickaboo and AjkerDeal target young consumers by offering the
latest gadgets and trendy fashion items, capitalizing on the tech-savvy nature of the younger
population.
4. Untapped Market Potential:
- Explanation: Many regions in Bangladesh, especially rural areas, are still underserved in
terms of retail options, creating a vast untapped market for e-commerce.
- Example: Online marketplaces like Evaly and Bikroy.com have been able to penetrate
these markets, offering products that are otherwise difficult to find locally, thus meeting the
demand for a variety of goods.
5. Product Availability and Information:
- Explanation: E-commerce platforms offer a wide range of products along with detailed
descriptions, reviews, and ratings, helping consumers make informed purchasing decisions.
- Example: Websites like Rokomari.com provide extensive product information and
customer reviews for books and educational materials, aiding consumers in making informed
choices and increasing customer trust.

6. Government Support:
- **Explanation:** The government of Bangladesh has been supportive of the digital
economy, implementing policies and initiatives to promote e-commerce growth, such as the
Digital Bangladesh Vision 2021.
- **Example:** The government’s initiatives to improve internet infrastructure and reduce
taxes on ICT products have facilitated the growth of e-commerce platforms, making it easier
for businesses to operate online.

7. **Digital Payment Systems:**

- **Explanation:** The rise of digital payment systems like bKash, Rocket, and Nagad has
made transactions more convenient and secure, encouraging more people to engage in e-
commerce.
- **Example:** bKash, one of the largest mobile financial services in Bangladesh, has
integrated with numerous e-commerce platforms, allowing customers to make seamless and
instant payments, thereby boosting online sales.

### Specific Examples of E-commerce Growth in Bangladesh:

- **Daraz:** As one of the largest online marketplaces, Daraz has capitalized on the
increasing internet penetration by offering a wide array of products, from electronics to
fashion, and has utilized mobile apps to reach a broad audience.
- **Chaldal:** This online grocery store has addressed the needs of urban customers by
providing home delivery of groceries, leveraging the growing trend of online shopping and
the demand for convenience.
- **Pathao:** Initially a ride-sharing platform, Pathao has expanded into food delivery and
courier services, generating employment and catering to the digital-savvy population’s needs.
- **Sheba.xyz:** Providing various home services, Sheba.xyz has created jobs for skilled
workers and brought traditional services online, demonstrating how e-commerce can
modernize conventional business models.

In summary, the e-commerce sector in Bangladesh is thriving due to the synergy of

technological advancements, demographic advantages, and supportive government policies,
making it a fertile ground for further growth and innovation.
Challenges
E-commerce in Bangladesh has been growing rapidly, but several challenges hinder its full
potential. Here’s a detailed look at the specific challenges faced:

1. **Digital Divide:**
The digital divide refers to the gap between those who have easy access to the internet and
digital technologies and those who do not. In Bangladesh, this divide is significant due to
factors such as limited internet penetration, especially in rural areas, and the cost of internet
services. Although internet penetration is increasing, rural areas still lag behind urban centers.
For example, according to the Bangladesh Telecommunication Regulatory Commission
(BTRC), while urban areas like Dhaka have high internet usage, rural areas struggle with
poor connectivity and low smartphone penetration. This restricts e-commerce reach and
potential customer base.

2. **Regulatory and Legal Barriers:**

The regulatory framework in Bangladesh can be challenging for e-commerce businesses.
For instance, policies regarding online business registration, taxation, and data protection are
not fully developed or consistently enforced. The lack of a clear e-commerce policy can lead
to uncertainties. The Digital Security Act 2018, intended to protect online transactions and
user data, has faced criticism for being too stringent and potentially stifling business
innovation due to fears of legal repercussions for minor infractions.

3. **Long Time to Become Profitable and Established:**

New e-commerce businesses often face a lengthy period before becoming profitable. This is
due to several factors, including high initial investments in technology, marketing, and
logistics. For example, Bangladeshi e-commerce platforms like Daraz and AjkerDeal have
taken years to build their customer base and achieve significant market penetration. Small
businesses, in particular, struggle with sustaining operations due to high costs and fierce
competition from larger, established players.
4. **Payment System Challenges:**
The payment infrastructure in Bangladesh is still developing. Many consumers prefer cash
on delivery (COD) due to mistrust in online payment systems and limited access to digital
payment methods. For instance, while mobile financial services (MFS) like bKash and
Rocket have grown, their integration with e-commerce platforms is not seamless. This
reliance on COD poses risks for sellers regarding fraud and non-payment.

5. **Cyber Security Concerns:**

Cyber security is a significant concern for e-commerce businesses in Bangladesh. Many
businesses are vulnerable to cyber-attacks due to inadequate security measures. For example,
there have been instances where customer data from e-commerce platforms have been
compromised, leading to loss of trust. Ensuring robust cyber security requires substantial
investment in technology and expertise, which can be a burden for smaller businesses.

6. **Competitive Pressure:**
The e-commerce market in Bangladesh is highly competitive, with numerous local and
international players vying for market share. Major platforms like Daraz (backed by Alibaba)
have significant resources to invest in marketing, logistics, and customer acquisition, making
it challenging for smaller businesses to compete. Additionally, price wars and heavy
discounting strategies used by larger players can squeeze profit margins for smaller
competitors, making it difficult for them to sustain operations.

### Specific Examples:

- **Pathao vs. Shohoz:** These two ride-sharing and e-commerce giants have been
competing fiercely in the market, often leading to aggressive pricing strategies. This
competitive environment makes it difficult for smaller startups to enter and thrive in the
market.
- **Evaly Scandal:** Evaly, once a popular e-commerce platform, faced legal action for
failing to deliver products despite taking payments in advance. This incident highlighted the
regulatory and trust issues within the e-commerce sector in Bangladesh.
- **Rural Connectivity Projects:** Initiatives like the "Info Lady" program aim to bridge the
digital divide by bringing internet services to rural women. However, such projects are still in
their early stages and need extensive scaling to make a significant impact.
These challenges collectively create a complex landscape for e-commerce in Bangladesh,
necessitating coordinated efforts from the government, private sector, and civil society to
address them and harness the full potential of digital commerce.

Conclusion : E-commerce in Bangladesh has shown remarkable growth and resilience,

becoming a significant part of the country's economy. The industry has evolved from simple
online transactions to sophisticated platforms offering diverse products and services.
Currently, it benefits from a large, young, and tech-savvy population along with increasing
internet penetration. Despite challenges such as logistical issues, payment security, and
regulatory hurdles, the potential for further growth is substantial. With continued investment
in infrastructure and policy support, e-commerce in Bangladesh is poised to become a major
driver of economic development.