Less than 10% of internet users shop online in Bangladesh

UNCTAD report

This low rate highlights the challenges of e-commerce in Bangladesh.

FE REPORT
| Published: Jul 10, 2024 23:42:51

The percentage of internet users making online purchases in Bangladesh is among the lowest in the world. Last year, the figure was below 10 percent, reflecting the need for more significant progress in e-commerce.
The share in most least developed countries (LDCs) is below 10 percent, according to the Digital Economy Report 2024, released on Wednesday by the United Nations Conference on Trade and Development (UNCTAD) in Geneva.
The report found that the widespread use of the Internet has rapidly and radically changed business and trade practices.
“In 1991, the Internet had fewer than 3 million users worldwide, and e-commerce was nonexistent,” it says. “By 1999, some 250 million users were using the Internet, and about a quarter of them were making online purchases on e-commerce sites, which were valued at $110 billion.”
Just over two decades later, the number of people shopping online has grown dramatically, with an estimated 2.3 billion people shopping online in 2021, the report found.
“Since 2010, e-commerce has grown significantly in many countries, further boosted by the COVID-19 pandemic.”
However, the UNCTAD report indicated that the extent to which people engage in e-commerce still varies significantly.
“In countries with the highest Internet usage, more than 80 percent of the population shops online; in most of the least developed countries, the figure remains below 10 percent,” it added.
The report found that the percentage of internet users making online purchases in the Netherlands and the United Kingdom (UK) last year exceeded 80 percent. In Sweden, Denmark and China, the figure was 80 percent.
UNCTAD estimates also showed that e-commerce sales by businesses in 43 developed and developing economies, accounting for three-quarters of the world’s gross domestic product (GDP), would be worth close to $27 trillion in 2022, up from about $17 trillion in 2016.
“In China, sales nearly tripled from $1.6 trillion in 2016 to $4.5 trillion in 2022, and in the United States, e-commerce sales grew from $7 trillion in 2016 to an estimated $11 trillion in 2022,” it added.
The report also noted that e-commerce sales by businesses in developed economies far outweigh those in developing economies. While developing countries account for about 40 percent of global GDP, their share of e-commerce sales by businesses is a maximum of 25 percent, suggesting significant growth potential, according to the UN organization.
“Consumers can access e-commerce through a range of online channels,” the report says. “Sellers can use their own dedicated e-commerce sites and third-party online marketplaces (such as Alibaba, Amazon, eBay, and Jumia), as well as various social media platforms.”
Meanwhile, according to a UNCTAD press release, the Digital Economy Report 2024 sheds light on the significant environmental impact of the global digital sector and the disproportionate burden being borne by developing countries.
The report mentions that while digitalization is driving global economic growth and offering unique opportunities to developing countries, its environmental impacts are becoming increasingly severe.
It also noted that developing countries continue to suffer uneven impacts both economically and ecologically due to “existing digital and development divides” but have “the potential to leverage this digital shift to support development.”
In a statement, UNCTAD Secretary-General Rebeca Grynspan stressed the need for a balanced approach, saying: “We must harness the power of digitalization to promote inclusive and sustainable development while mitigating its negative impacts on the environment.”
“This requires a transition to a circular digital economy, characterized by responsible consumption and production, the use of renewable energy and comprehensive e-waste management,” she continued. “The growing environmental impact of the digital economy can be reversed.”
The report also mentioned that Bangladesh, Cameroon, Chile, China, Egypt, Ghana, India, Mexico, Pakistan, the Philippines, Thailand, Uruguay, Vietnam and the State of Palestine are some of the developing countries where a large number of informal electronic waste dismantling and recycling facilities operate.
The report highlights the urgent need to address the environmental costs of rapid digital transformation.

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