Retail environment in Bangladesh can be segregated into two streams; organized retail and unorganized retail. Although the entire industry has shaped around unorganized retail over the years, organized retail is gradually becoming popular to the new generation convenience seeking consumers. While the local mom and pop shops (In Bengali Mudir Dokan) are still larger contributors to turnover of consumer goods, super shops are slowly turning those customers into their value chain while creating new customers as well.
Despite the unending potential, according to Bangladesh Superstore Owners’ Association (BSOA), the organized retail segment only captured 1% of the total retail space in 2019. This points to the lack of acceptance and reach of organized retail in the current market. So, although Mini Markets have a great potential for growth, Mudir Dokans are still leading the market. But in terms of sustainability, mini markets stand at a far better position and have the potential to do much more in the future.
The COVID-19 pandemic has been a game changer for the retail space as it has forced shops to close down and people to stay inside. The larger supermarkets have taken this opportunity to leave their marks in the online grocery segment by opening digital grocery services. Although these services have just gained popularity, they have been around for quite some time. Their failures to get on the radar can be attributed to quite a few internal and external factors.
Why has the digital grocery sector not grown?
The pandemic has boosted the growth of the digital grocery space, which was dormant for the past few years. The reasons can be attributed to a lot of different factors:
Very few supermarkets have their own platform and operate out of Facebook or Instagram pages. Even if the platforms are available, they lack important things such as real time tracking, proper inventory counts, etc. So as a result, the businesses have been unable to draw in more consumers.
As the consumers are used to buying products by directly inspecting their freshness, digital grocery lagged behind. Thus, the retail space has been dominated by the physical outlets.
Customers have a hard time clearing their payment due to the existing barriers in digital payment. Although the rise of MFS has created more opportunities for easy payment, the cash limits still bars larger purchases.
The inefficiency of delivery services are often the cause of annoyance of consumers. Delivery men sometimes cause problems like mixing up orders, calling at awkward times, inability to find the correct address etc. Although these annoyances are mostly caused by the inefficiency of third parties, it still reflects negatively on the companies themselves.
Future Prospects in the Digital Grocery Space
The per capita income of Bangladesh has displayed a growing trend over the years resulting in increased buying capacity of all socio-economic groups. This increased capacity comes with a boost in the payment through mobile financial services (MFS) like Bkash, rocket etc. The month of May 2020 saw an average daily transaction of BDT 1535.53 crore on MFS platforms. This was a 58.7% growth from the previous month. Growing connectivity and better integration of payment platforms have made the industry more profitable and lucrative. But to make the perfect use of these positive externalities, the businesses have to do a better job of getting more consumers on board. This is a big challenge as it goes against the age-old norm of getting groceries after inspection from markets. In the post-pandemic world, more consumer trust has to be developed, and only then the full benefit of our growing income and internet penetration of Bangladesh can be enjoyed by the online grocery platforms.
Time for the Local Brands to Buckle Up
Understanding the market needs and consumer expectations, Bongo technology has brought cutting-edge solutions for the retailers. We have created an open space for all kind of retailers such as local shops and grocery shops to obtain an on-demand online marketplace with top-notch technology. Simultaneously, we have launched our own on-demand delivery solution for Person-to-Person (P2P) delivery, Ecommerce delivery, Corporate Logistics and what not to streamline smooth delivery services for the on-demand marketplace; and to digitize the overall logistics industry.
For marketplace solutions, you can learn more at Online Marketplace
To get us as your delivery partner, visit our platform at Bongo Xpress
If you want to automate your delivery system, see our delivery management solution at Delivery Management Solution/
It’s high time for adapting to the digital revolution for your local shop. Talk to us to know how we can help you on this.
