A PROJECT REPORT

ON

“E-Business Effect in Bangladesh.”

Supervised By:

Bushra Ferdousi

Assistant Professor

Department of Business Administration

Dhaka International University.

Submitted By:

Shubhra Dev Barai.

RMBA Program

Batch 26th, Roll No:27

Reg. No: 210117, Session: 2012-2013

Major in Finance & Banking

Department of Business Administration

Dhaka International University

Date of Submission: 28th January, 2013

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Dhaka International University (DIU)

Letter of Transmittal 28th January, 2013

To,Bushra Ferdousi

Assistant Professor

Department of Business Administration

Dhaka International University.

Subject: Submission of Project report.

Dear Madam,

It is my great pleasure to put forward this report that you assigned me on “E-Business

Effect in Bangladesh”. I have tried my best to bring about my report objective

effectively. Under your supervision I have completed my respective job. In my

observation I tried to find out the present situation of e-business policy and try to present

it in my report.

By doing this report I have learned many practical things that may help me one step

ahead in the future. This is my real life experience report so that I will always be

available for any additional that may require.

I again give you thanks for giving me a chance to present a report to you and hope it will

positively helpful for me.

Yours Sincerely,________________Shubhra Dev Barai.

RMBA Program

Batch 26th, Roll No:27

Reg. No: 210117, Session: 2012-2013

Major in Finance & Banking

Shubhradev Barai 5/14/20232

Department of Business Administration

Dhaka International University.

Shubhradev Barai 5/14/20233

Supervisor Approval

This is to certify that the concerned report entitled on “E-Business Effect in

Bangladesh” is an original worked by Shubhra Dev Barai, Batch 26th, Roll No: 27,

RMBA Program, Major in Finance And Banking, Department of Business

Administration, Dhaka International University, completed his project under my

supervision.

_________________

Bushra Ferdousi

Assistant Professor

Faculty of Business Administration

Dhaka International University.

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Acknowledgement

I would like to give a special thanks to The Almighty God for given me such patience

and power for completing this report smoothly at the time of writing the report I faced

some difficulties. The preparation of writing had been even harder and It certainly would

not have been possible without the help of many people and I would like to acknowledge

my appreciation to all those who had helped during the process.

First I must express my gratitude to my honorable supervisor Bushra Ferdousi who

helped me to choose this topic which is so much motivating and could be useful to my

practical sector. Her guidance is helping me to separate the important and necessary

details in my report. Without her guidance I never completed my report successfully for

preparing the report, she gave me the opportunity to contact with her at any time. She is

also so co-operative and friendly in nature.

I would also like to thanks all the members who helped me to make the report on “E-

Business Effect in Bangladesh”. They helped me to learn the various things about the

business sector during this period of making report. They had been very helpful and co-

operative and willing to help me at any times. Without their help and co-operation I

couldn’t learn anything from this period.

And, I would like to thanks my family, for inspiring me to doing report. with perfection.

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Executive summery

The Internet has opened up a new horizon for trade and Business, namely electronic

Business (E-Business). E- Business entails the use of the Internet in the marketing,

Identification, payment and delivery of goods and services. This paper highlights the

status, statutes, potential and constraints to E- Business development in Bangladesh. Both

the statutory laws as well as the challenges in implementing them are discussed. Major

legal, regulatory and institutional constraints to e-commerce are identified. The paper

also lists specific policy changes aimed at bringing improvements to the legal and

regulatory environment affecting E- Business

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TABLE OF CONTENT

Subjects

Letter of Transmittal

Supervisor Approval

AcknowledgementExecutive summery

CHAPTER-ONEIntroductionMethodologySources of DataPrimary SourcesSecondary SourcesLimitations of the study

CHAPTER-TWOElectronic businessInternal business systemsModelsClassification by provider and consumerPotential concernsSecurityPrivacy and confidentialityAuthenticityData integrityNon-repudiationAccess controlAvailabilityPhysical securityData storageData transmission and application developmentSystem administrationSecurity solutionsEncryptionDigital certificatesDigital signaturesBenefits of E-Business

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Current State of E-Business in BangladeshUsage of ComputerOperating Sectors of E-Business in BangladeshOperating Sectors of E-Business in BangladeshThe Operating Sectors of E-Business in BangladeshThe Financial SectorBanking on the WebWhy e-Commerce for BangladeshFuture in Bangladesh:Bangladesh IT industry going globalImpact of E-Business in BangladeshImpact on costs related to logisticsImpact on organizationImpact on FinanceImpact on EducationImpact on Business:Impact on MarketingImpact on ManufacturingImpact on Transportation

CHAPTER-THREESWOT Analysis

CHAPTER-FOURFindingsRecommendationConclusion

CHAPTER-FIVEReferences

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IntroductionThe Internet has opened up a new horizon for commerce, namely electronic commerce

(ecommerce).The Internet, through advanced mechanisms of data transfer networks,

establishes global linkages between customers and suppliers regardless of geographic

location. E-commerce entails the use of the Internet in the marketing, identification,

payment and delivery of goods and services. It involves order processing at company

Websites and securing Electronic Fund Transfer (EFT) payment systems.

Globalization has brought in many changes in the business scenario with the whole world

inching towards one big market place. Communication between the buyers and sellers

has become critical as each can opt to explore a greater number of alternatives than ever

before. E-commerce through Internet, e-mails, websites, and other facilities, enables a

businessman to be linked with every corner of the world, and thus opens up greater

opportunities in the world market. Another important factor is the time required for

completing a business transaction. As markets are becoming competitive and information

is more readily available, a quick, reliable and replicable transaction implies availing of

prevailing opportunities. On the contrary, delays in processing a transaction might

become synonymous to wasting an opportunity. Therefore, a fast and alternative

mechanism of communication, contract, and payment is an integral part of a globally

competitive business organization. How important or relevant is e-commerce to the

economy of Bangladesh – a developing economy – in general and to the export market in

particular? The Information Technology (IT) revolution has been too phenomenal to

predict its future growth and its use in an economy like Bangladesh’s. In the light of the

recent spate of globalization and the initiation of the World Trade Organization (WTO),

assessing the immediate and short or medium term relevance of e-commerce to

Bangladesh becomes imperative.

A review of the trade scenario of Bangladesh reveals that it has accepted the challenge of

globalization by pursuing the most liberalized trade regime in South Asia. As a signatory

of WTO, Bangladesh has accepted the Code of Good Practice of the WTO Agreement on

Technical Barriers to Trade. Consequently, it is expected to adhere to various standards

and technical regulations. To face the challenge posed by globalization, Bangladeshi

producers will not only have to offer goods and services at competitive prices, but also

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ensure timely delivery, quality control and an efficient and reliable payment mechanism.

However, the steps taken towards trade liberalization in Bangladesh become ineffective

as a result of poor governance and weak infrastructure. Even simple day-to-day

transactions with government bodies are characterized by unnecessary delays,

obstructionism by public sector officials and demands for illegal payments. In addition to

corruption, trade related regulations that are vague, contradictory and improperly

implemented aggravate the situation.

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MethodologyThe methodology followed to prepare this report was Qualitative.the data gathered here

are usually three-pronged:

1. Review of the available literature/ secondary material

3. Interviews with relevant stakeholders

As a primary step in the country study, a review of relevant literature on corporate

governance in Bangladesh was conducted. This review examined recent articles,

periodicals, books, and reports, both public and non-public. Sources included multilateral

development agencies, non-governmental organizations, government publications, and

periodicals. The literature reviewed was relevant to at least one aspect of corporate

governance. At times, the focus of the literature was not corporate governance, but

contained some analysis or information relevant to the topic.

Sources of DataBoth primary and secondary sources were used for the research purpose. The secondary

data sources were-journal, books, internet etc. Primary data was collected through

household survey by using appropriate research instrument.

1. Primary Source: Primary data have been collected from few executives of the

E-Business organizations. I asked them some questions by visiting a branch &

through mobile phone. Observation method has also been used.

2. Secondary Source: Beside primary data, necessary secondary data have been

collected from the websites, textbooks on E-Business practice. I also

used data from several e-based companies’ annual report.

Limitations of the studyAlthough the study will address numerous benefits, explores the state of perceptions of

different business organizational categories, it is still unanswered that which of the benefits

significantly affect, and in what extent, the intention of the adoption of e-Business, may be

considered as the limitation of the study.

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Electronic BusinessElectronic business, or e-business, is the application of information and communication

technologies (ICT) in support of all the activities of business. Business constitutes the

exchange of products and services between businesses, groups and individuals and can be

seen as one of the essential activities of any business. Electronic commerce focuses on

the use of ICT to enable the external activities and relationships of the business with

individuals, groups and other businesses. The term "e-business" was coined by IBM's

marketing and Internet teams in 1996.

Electronic business methods enable companies to link their internal and external data

processing systems more efficiently and flexibly, to work more closely with suppliers and

partners, and to better satisfy the needs and expectations of their customers. The internet

is a public through way. Firms use more private and hence more secure networks for

more effective and efficient management of their internal functions. In practice, e-

business is more than just e-commerce. While e-business refers to more strategic focus

with an emphasis on the functions that occur using electronic capabilities, e-commerce is

a subset of an overall e-business strategy. E-commerce seeks to add revenue streams

using the World Wide Web or the Internet to build and enhance relationships with clients

and partners and to improve efficiency using the Empty Vessel strategy. Often, e-

commerce involves the application of knowledge management systems.

E-business involves business processes spanning the entire value chain: electronic

purchasing and supply chain management, processing orders electronically, handling

customer service, and cooperating with business partners. Special technical standards for

e-business facilitate the exchange of data between companies. E-business software

solutions allow the integration of intra and inter firm business processes. E-business can

be conducted using the Web, the Internet, intranets, extranets, or some combination of

these.

Basically, electronic commerce (EC) is the process of buying, transferring, or exchanging

products, services, and/or information via computer networks, including the internet. EC

can also be beneficial from many perspectives including business process, service,

learning, collaborative, community. EC is often confused with e-business.

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Internal business systems: Customer Relationship Management (CRM)

Enterprise Resource Planning (ERP)

Document Management System (DMS)

Human Resources Management (HRM)

Enterprise communication and collaboration:

VoIP

Content Management System

E-mail

Voicemail

Web Conferencing

Digital work flows  (or business process management)

Electronic Commerce  - business-to-business e-business  (B2B) or business-to-

consumer e-business  (B2C):

Internet shop

Supply chain management

Online marketing

Offline marketing

ModelsWhen organizations go online, they have to decide which e-business models best suit

their goals. A business model is defined as the organization of product, service and

information flows, and the source of revenues and benefits for suppliers and customers.

The concept of e-business model is the same but used in the online presence. The

following is a list of the currently most adopted e-business models such as:

E-shops

E-commerce

E-procurement

E-malls

E-collaboration

E-auctions

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Virtual Communities

Classification by provider and consumer:Roughly dividing the world into providers/producers and consumers/clients one can

classify e-businesses into the following categories:

business-to-business (B2B)

business-to-consumer (B2C)

business-to-employee (B2E)

business-to-government (B2G)

government-to-business (G2B)

government-to-government (G2G)

government-to-citizen (G2C)

consumer-to-consumer (C2C)

consumer-to-business (C2B)

It is notable that there are comparably less connections pointing "upwards" than

"downwards" (few employee/consumer/citizen-to-X models).

Figure 1: The Three Dimensions of E-Commerce

Potential concerns

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While much has been written of the economic advantages of Internet-enabled commerce,

there is also evidence that some aspects of the internet such as maps and location-aware

services may serve to reinforce economic inequality and the digital divide.[5] Electronic

commerce may be responsible for consolidation and the decline of mom-and-pop, brick

and mortar businesses resulting in increases in income inequality.

SecurityE-Business systems naturally have greater security risks than traditional business

systems, therefore it is important for e-business systems to be fully protected against

these risks. A far greater number of people have access to e-businesses through the

internet than would have access to a traditional business. Customers, suppliers,

employees, and numerous other people use any particular e-business system daily and

expect their confidential information to stay secure. Hackers are one of the great threats

to the security of e-businesses. Some common security concerns for e-Businesses include

keeping business and customer information private and confidential, authenticity of data,

and data integrity. Some of the methods of protecting e-business security and keeping

information secure include physical security measures as well as data storage, data

transmission, anti-virus software, firewalls, and encryption to list a few.

Privacy and confidentialityConfidentiality is the extent to which businesses makes personal information available to

other businesses and individuals. With any business, confidential information must

remain secure and only be accessible to the intended recipient. However, this becomes

even more difficult when dealing with e-businesses specifically. To keep such

information secure means protecting any electronic records and files from unauthorized

access, as well as ensuring safe transmission and data storage of such information. Tools

such as encryption and firewalls manage this specific concern within e-business.

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AuthenticityE-business transactions pose greater challenges for establishing authenticity due to the

ease with which electronic information may be altered and copied. Both parties in an e-

business transaction want to have the assurance that the other party is who they claim to

be, especially when a customer places an order and then submits a payment

electronically. One common way to ensure this is to limit access to a network or trusted

parties by using a virtual private network (VPN) technology. The establishment of

authenticity is even greater when a combination of techniques are used, and such

techniques involve checking "something you know" (i.e. password or PIN), "something

you need " (i.e. credit card), or "something you are" (i.e. digital signatures or voice

recognition methods). Many times in e-business, however, "something you are" is pretty

strongly verified by checking the purchaser's "something you have" (i.e. credit card) and

"something you know" (i.e. card number).

Data integrityData integrity answers the question "Can the information be changed or corrupted in any

way?" This leads to the assurance that the message received is identical to the message

sent. A business needs to be confident that data is not changed in transit, whether

deliberately or by accident. To help with data integrity, firewalls protect stored data

against unauthorized access, while simply backing up data allows recovery should the

data or equipment be damaged.

Non-repudiationThis concern deals with the existence of proof in a transaction. A business must have

assurance that the receiving party or purchaser cannot deny that a transaction has

occurred, and this means having sufficient evidence to prove the transaction. One way to

address non-repudiation is using digital signatures. A digital signature not only ensures

that a message or document has been electronically signed by the person, but since a

digital signature can only be created by one person, it also ensures that this person cannot

later deny that they provided their signature.

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Access controlWhen certain electronic resources and information is limited to only a few authorized

individuals, a business and its customers must have the assurance that no one else can

access the systems or information. Fortunately, there are a variety of techniques to

address this concern including firewalls, access privileges, user identification and

authentication techniques (such as passwords and digital certificates), Virtual Private

Networks (VPN), and much more.

AvailabilityThis concern is specifically pertinent to a business' customers as certain information must

be available when customers need it. Messages must be delivered in a reliable and timely

fashion, and information must be stored and retrieved as required. Because availability of

service is important for all e-business websites, steps must be taken to prevent disruption

of service by events such as power outages and damage to physical infrastructure.

Examples to address this include data backup, fire-suppression systems, Uninterrupted

Power Supply (UPS) systems, virus protection, as well as making sure that there is

sufficient capacity to handle the demands posed by heavy network traffic.

Common security measures

Many different forms of security exist for e-businesses. Some general security guidelines

include areas in physical security, data storage, data transmission, application

development, and system administration.

Physical securityDespite e-business being business done online, there are still physical security measures

that can be taken to protect the business as a whole. Even though business is done online,

the building that houses the servers and computers must be protected and have limited

access to employees and other persons. For example, this room should only allow

authorized users to enter, and should ensure that "windows, dropped ceilings, large air

ducts, and raised floors" do not allow easy access to unauthorized persons. Preferably

these important items would be kept in an air-conditioned room without any windows.

Protecting against the environment is equally important in physical security as protecting

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against unauthorized users. The room may protect the equipment against flooding by

keeping all equipment raised off of the floor. In addition, the room should contain a fire

extinguisher in case of fire. The organization should have a fire plan in case this situation

arises.

In addition to keeping the servers and computers safe, physical security of confidential

information is important. This includes client information such as credit card numbers,

checks, phone numbers, etc. It also includes any of the organization's private information.

Locking physical and electronic copies of this data in a drawer or cabinet is one

additional measure of security. Doors and windows leading into this area should also be

securely locked. Only employees that need to use this information as part of their job

should be given keys.

Important information can also be kept secure by keeping backups of files and updating

them on a regular basis. It is best to keep these backups in a separate secure location in

case there is a natural disaster or breach of security at the main location.

"Failover sites" can be built in case there is a problem with the main location. This site

should be just like the main location in terms of hardware, software, and security

features. This site can be used in case of fire or natural disaster at the original site. It is

also important to test the "failover site" to ensure it will actually work if the need arises.

State of the art security systems, such as the one used at Tidepoint's headquarters, might

include access control, alarm systems, and closed-circuit television. One form of access

control is face (or another feature) recognition systems. This allows only authorized

personnel to enter, and also serves the purpose of convenience for employees who don't

have to carry keys or cards. Cameras can also be placed throughout the building and at all

points of entry. Alarm systems also serve as an added measure of protection against theft.

Data storageStoring data in a secure manner is very important to all businesses, but especially to e-

businesses where most of the data is stored in an electronic manner. Data that is

confidential should not be stored on the e-business' server, but instead moved to another

physical machine to be stored. If possible this machine should not be directly connected

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to the internet, and should also be stored in a safe location. The information should be

stored in an encrypted format.

Any highly sensitive information should not be stored if it is possible. If it does need to

be stored, it should be kept on only a few reliable machines to prevent easy access. Extra

security measures should be taken to protect this information (such as private keys) if

possible. Additionally, information should only be kept for a short period of time, and

once it is no longer necessary it should be deleted to prevent it from falling into the

wrong hands. Similarly, backups and copies of information should be kept secure with

the same security measures as the original information. Once a backup is no longer

needed, it should be carefully but thoroughly destroyed.

Data transmission and application developmentAll sensitive information being transmitted should be encrypted. Businesses can opt to

refuse clients who can't accept this level of encryption. Confidential and sensitive

information should also never be sent through e-mail. If it must be, then it should also be

encrypted.

Transferring and displaying secure information should be kept to a minimum. This can be

done by never displaying a full credit card number for example. Only a few of the

numbers may be shown, and changes to this information can be done without displaying

the full number. It should also be impossible to retrieve this information online.

Source code should also be kept in a secure location. It should not be visible to the

public.

Applications and changes should be tested before they are placed online for reliability

and compatibility.

System administrationSecurity on default operating systems should be increased immediately. Patches and

software updates should be applied in a timely manner. All system configuration changes

should be kept in a log and promptly updated.

System administrators should keep watch for suspicious activity within the business by

inspecting log files and researching repeated logon failures. They can also audit their e-

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business system and look for any holes in the security measures. It is important to make

sure plans for security are in place but also to test the security measures to make sure they

actually work. With the use of social engineering, the wrong people can get a hold of

confidential information. To protect against this, staff can be made aware of social

engineering and trained to properly deal with sensitive information.

E-businesses may use passwords for employee logons, accessing secure information, or

by customers. Passwords should be made impossible to guess. They should consist of

both letters and numbers, and be at least seven to eight digits long. They should not

contain any names, birth dates, etc. Passwords should be changed frequently and should

be unique each time. Only the password's user should know the password and it should

never be written down or stored anywhere. Users should also be locked out of the system

after a certain number of failed logon attempts to prevent guessing of passwords.

Security solutionsWhen it comes to security solutions, there are some main goals that are to be met. These

goals are data integrity, strong authentication, and privacy.

Access and data integrity

There are several different ways to prevent access to the data that is kept online. One way

is to use anti-virus software. This is something that most people use to protect their

networks regardless of the data they have. E-businesses should use this because they can

then be sure that the information sent and received to their system is clean. A second way

to protect the data is to use firewalls and network protection. A firewall is used to restrict

access to private networks, as well as public networks that a company may use. The

firewall also has the ability to log attempts into the network and provide warnings as it is

happening. They are very beneficial to keep third-parties out of the network. Businesses

that use Wi-Fi need to consider different forms of protection because these networks are

easier for someone to access. They should look into protected access, virtual private

networks, or internet protocol security. Another option they have is an intrusion detection

system. This system alerts when there are possible intrusions. Some companies set up

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traps or "hot spots" to attract people and are then able to know when someone is trying to

hack into that area.

EncryptionEncryption, which is actually a part of cryptography, involves transforming texts or

messages into a code which is unreadable. These messages have to be decrypted in order

to be understandable or usable for someone. There is a key that identifies the data to a

certain person or company. With public key encryption, there are actually two keys used.

One is public and one is private. The public one is used for encryption, and the private for

decryption. The level of the actual encryption can be adjusted and should be based on the

information. The key can be just a simple slide of letters or a completely random mix-up

of letters. This is relatively easy to implement because there is software that a company

can purchase. A company needs to be sure that their keys are registered with a certificate

authority.

Digital certificatesThe point of a digital certificate is to identify the owner of a document. This way the

receiver knows that it is an authentic document. Companies can use these certificates in

several different ways. They can be used as a replacement for user names and passwords.

Each employee can be given these to access the documents that they need from wherever

they are. These certificates also use encryption. They are a little more complicated than

normal encryption however. They actually used important information within the code.

They do this in order to assure authenticity of the documents as well as confidentiality

and data integrity which always accompany encryption. Digital certificates are not

commonly used because they are confusing for people to implement. There can be

complications when using different browsers, which means they need to use multiple

certificates. The process is being adjusted so that it is easier to use.

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Digital signaturesA final way to secure information online would be to use a digital signature. If a

document has a digital signature on it, no one else is able to edit the information without

being detected. That way if it is edited, it may be adjusted for reliability after the fact. In

order to use a digital signature, one must use a combination of cryptography and a

message digest. A message digest is used to give the document a unique value. That

value is then encrypted with the sender's private key. 

Benefits of E-Business:There is some significant benefit of e-business to some particular people or parties. They

are mentioned bellow:

E-Business provides benefits to organizations.

E-Business provides benefits to customers and

E-Business provides benefits to the society.

Current State of E-Business in Bangladesh: In Bangladesh there is a limited application and use of B2C e-business. This field is not

yet much developed in Bangladesh. There are many reasons behind it one simple reason

is this country is not so developed and most of its citizens are poor and uneducated. It is

quit natural that there are few customers who is willing and can shop in internet. It will

take year’s to be developed this sector in bd.

The telecommunication infrastructure any country affect the Internet services directly,

cause it is largely depended on it. Telecommunication sector in Bangladesh is

characterized by:

1. Poor level of penetration

2. High cost to access and

3. A lengthy waiting period

The Bangladesh Telegraph and Telephone Board (BTTB) Is the one and only provider

and enjoying monopoly in providing basic telephone connections. The private sectors are

now involving in cellular phones and also working as Internet Service Providers (ISP) .It

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is very essential although easy and affordable access to Internet services, BTTB’s pricing

and regulatory strategy on ISPs are restrictive.

Due to many reasons B2C e-business will not be able to be of much use in the near future

in Bangladesh. The reasons are:

1. Low per capita income

2. A weak infrastructural and legal environment

3. Lack of trust between business and consumers.

4. Non-availability of international credit cards

5. Foreign currency remittance restrictions

6. Delays and informal payments at customs clearance.

The above reasons contribute greatly for the non operation of B2C e-business in

Bangladesh.

On the other hand, In Bangladesh B2B e-business is already in operation for years.

Export sector has the great use of it. A major field of the use of e-business is ready made

garments (RMG) sector. They use internet for searching potential buyer and supplier.

There some local websites which provides facility of C2C e-business in Bangladesh. In

those websites both the customer or buyer and seller can interact directly with each other.

Usage of ComputerBusiness PC/ Employee Internet user/ PC LAN WAN WWW

Garments Industry (Woven) 0.168 0.51 22% 15% 31%

Garments Industry (Knitwear) 0.047 0.53 27% 18% 18%

Buying House 0.737 0.5 20% 10% 20%

Health 0.089 0.3 44% 6% 6%

Trading 0.04 0.83 10% 2% 8%

Real Estate 0.281 0.42 33% 0% 33%

Pharmaceuticals 0.047 0.09 100% 10% 30%

Courier 0.084 0.25 10% 10% 0%

Media 0.184 0.3 67% 0% 53%

Handicraft 0.059 0.79 11% 0% 22%

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Operating Sectors of E-Business in Bangladesh: Currently there is some field where e-business is running successfully in Bangladesh.

Although this sectors are operating in our country in very limited operations due to the

lacks of adequate customer still it has many potentials to be pervasive. Anyway the

sectors are:

Online banking

Hotel booking

Airline ticket booking

Ready made garment.

Oil and Gas Sector

Major Constraints to E-Business-

The Operating Sectors of E-Business in Bangladeshe are various constraints to e-commerce in particular in respect of Bangladesh. If we can

overcome this barrier there is possibility that we can successfully implement and operate

e-business. So in order to make the future of e-business in Bangladesh prosperous we

have to have careful watch on those. The constraints are:

1. Inadequate telephone connections in Bangladesh

2. There is no strong independent telecommunication sectors regulatory body

3. Lack of encryption law that precludes acceptance of digital signature.

4. There are no other options of Letter of Credit (L/C) to conduct international

transactions.

5. Bangladesh does not issue international credit cards for cross border transactions.

6. Interest rate ceiling on export loans.

The status and performance of the telecommunications sector holds the control of entry,

value, and the image of Internet services.

Bangladesh is characterized by poor level of penetration (0.4 telephone for every 100

persons, Graph 1), high cost to access, $341 connection fees each telephone, one of the

highest in the world, and a lengthy waiting period -- average waiting period for a new

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telephone connection varies from three months to ten years. It’s very difficult o

establishing a strong and independent regulatory body. Perfect framework can be of

immense whereby volume, efficiency and accessibility of the telecom services can be

enhanced.

The Financial SectorOnly 27 branches of the eight foreign banks are interconnected with their respective head

offices. They are also satisfactorily computerized. This represents only 0.47% of the

entire banking sector.

Some local banks have limited usage of LAN at the head quarters. None of them are

capable of providing real time inter branch transaction. As such, the customers of 5,770

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 in different cities

 

Banking on the WebThough there are 56 banks in Bangladesh, mostly head quartered in Dhaka .(, Only a

select few have web pages.  Listed below are the names of the few that do have sites. 

However, most of these banks do not offer online or electronic service such as Direct

Deposit.  There are some ATM machines, though not nearly as concentrated as in the

United States

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-business. 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 alternative products. Consequently, the

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

Shubhradev Barai 5/14/202325

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 have, over the last several years, put much emphasis on

the importance of e-business for developing countries. UNCTAD has special programs to

facilitate developing countries to transition into e-business. The WTO has also developed

rules and guidelines for global e-business transactions..

Bangladesh IT industry going globalThe information technology industry in Bangladesh has gradually come of age and today

accounts for more than Taka 25 billion or USD350 million in annual revenues.

It is still a tiny blip compared to a GDP nearing USD100 billion but it's a noticeable blip

that is growing markedly every year.

Twenty years ago the IT industry was predominantly a hardware vendors market with

little or no value addition locally. Today there are more than 320 software and IT services

firms registered as members of the Bangladesh Association of Software and Information

Services (BASIS) that adds in excess of USD100 million in value through a full spectrum

software and IT services for both domestic as well as overseas clientele.

The growth in BASIS membership is significant for the IT industry for a number of

reasons a) it indicates a deepening of the IT skills available locally, b) it manifests

growing confidence of global and local buyers on local IT talent and c) it marks a clear

departure from the traditional entrepreneurship model based on physical-labour-intensive

production industries.

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Bangladesh today is the third largest exporter of apparels and this industry will continue

to dominate our export basket for the foreseeable future. However, as our literacy rate,

secondary education rate and most importantly our tertiary education rate improves, our

capacity for knowledge-based industries also increases. This is evident from the fact that

Bangladesh has had more than 60 call centers set up with a combined capacity of over

2,000 seats in a span of only two years since 2007. Software and graphic design service

exporters raked in nearly USD33 million from July 2008 to June 2009 an increase of 32

percent from the previous year despite severe economic recession in most buying

countries. The growth trend is getting stronger with time as IT entrepreneurs scale up

their operations riding on increased overseas market penetrations and bigger investments.

The growth in software and IT services exports in 2008-09 fiscal year is specially

significant since growth was slightly negative in the previous two years. According to

some business climate surveys done in early 2008, the sluggish export performance in IT

services then was due in large part to the political uncertainty prevailing in the country in

that period. However, the return to robust growth points to the fundamentally strong base

of the industry that is hungry for bigger successes in the coming years.

What is however, more significant is that many of our IT companies are venturing off-

shore and garnering recognizable footprints in industries such as IP telephony solutions to

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high-end server maintenance services in many countries. This is certainly a welcome

trend in an industry where skills and competencies are mostly universal.

Bangladesh's education system has deeply entrenched links to the English language over

many centuries. This has made English the de facto second language. What's more

important though, English is the primary language of trade and commerce here, which

makes Bangladesh a very attractive destination for software and IT services off shoring.

The World Bank in a study conducted in 2008 concluded that as one of the largest

Anglophone countries in the world Bangladesh is poised for triple digit growth in its

export of software and IT services. The WB projects such exports to exceed USD500

million by 2014. In another development the Geneva-based International Trade Centre in

a study on the IT-enabled services industry concluded that this segment of the software

and IT services industry will reach USD150 million in export revenue by 2011. In a

related study conducted by the Japan International Cooperation Agency (JICA) in 2007-

08, they ranked Bangladesh ahead of all other off shoring countries in Asia except India

and China on software and IT services competencies. However, in terms of

competitiveness Bangladesh ranked at the top.

With such favorable assessments of the software and IT services industry here, it's no

wonder that many global software and IT services companies are setting up their captive

operations here and at the same time many local players are going global with their

offerings. It's time this industry took to the wings and reached ever greater heights for all

to see.

Impact of E-Business in BangladeshBecause electronic commerce is still at a very early stage in its development, much of this

thinking is based on speculation on sketchy evidence. These claims can be analyzed by

looking first at price declines in key technologies, which enables electronic commerce.

The price declines in these supporting technologies allow firms to reduce its production

costs. However, given the intangible nature of e-commerce, new transaction costs are

generated, many of which are associated with creating trust and managing some of the

risks. The Falling Cost of Information and Communication Technologies As electronic

commerce is an Internet application, it runs on an infrastructure composed of computers,

Shubhradev Barai 5/14/202328

software and communication systems and uses the Internet’s key infrastructure

applications (e.g. e-mail, world wide web, browser).This group of technologies has

supported the development of e-business and in turn is the source of much of electronic

commerce’s value.

Impact on costs related to logisticsA key feature of electronic commerce is the convenience of having purchases delivered

directly. In the case of tangibles, such as books, this incurs delivery costs. The delivery

agent plays an important role in assuring customers that purchases will arrive. Goldman

Sachs conducted a survey of prices for a market basket of 30 products sold by Wal-Mart

both online and offline, while the prices for the two market baskets did not differ by

much, the final price of products purchased online was higher by 9 percent owing to

shopping costs. Some portion of the reduction on in firms‟ cost can be attributed to the

shifting of costs formerly borne by the firm to the customer in the form of self-service.

For example, customers are now expected to learn about the product, answer their own

customer support questions, and pay for shipment of the product. It is difficult to

ascertain what portion of the firm’s lower costs is due to shifting and what portion to

actual reduction. As some customers will prefer not to pay these costs or to accept lower

quality of service, it may potentially limit reduction.

Impact on organizationTechnology and Organizational Learning Rapid progress in E-Commerce is forcing

companies of Bangladesh to adapt quickly to the new technology and offer them an

opportunity to experiment with new products, services, and processes. New technologies

require new organizational approaches. For instance, the structure of the organizational

unit dealing with E-Commerce might have to be different from the conventional sales and

marketing departments. The nature of work and employment is transformed in the Digital

Age. Driven by increased competition in the global marketplace, firms are reducing the

number of employees down to a core of essential staff and outsourcing whatever work

they can to countries where wages are significantly less expensive. The upheaval brought

Shubhradev Barai 5/14/202329

on by these changes is creating new opportunities and new risks and forcing us into new

ways of thinking about jobs, careers, and salaries.

Impact on FinanceE-Business has brought a great impact in our finance system of Bangladesh. Using ATM

machine, people now can banking at any time that changes the customers' financial lives

and shake the foundations of financial systems.

Impact on EducationOnline learning systems are now available in Bangladesh in which people can take higher

study. Online learning systems are taken to mean educational structures that include a

web-based technological infrastructure, online course material and online enrolment,

tutoring, communication, assessment and administration procedures.

Basic Learning(without ICT)

Basic Learning(with ICT)

ClassroomE-Learning

Fully FeaturedE-Learning

Technology Access

Minimum 25:1 (Students &Teachers)

Computers-on-wheels or shared desktops,Teachers PC Programs

Laptops (1:1) withTeacher PC Programs

Connectivity Dial-up Wired lap only Wireless inclassroom

Board, fast coverage(WiFi, WiMAX)

Digital Content

- Focus on learningPCs

Some digitalcurriculum integration

Complete digitalcurriculumintegration

Improved LearningMethods

- Group collaboration

Project-basedlearning

Student-centredlearning

ProfessionalDevelopment

- Lab instructor only

More people, deeperinstruction

Most people, throughinstruction

Impact on BusinessWith the increasing diffusion of ICTs, more specifically the Internet, the global business

community is rapidly moving towards Business-to-Business (B2B) e-business.

Bangladesh is pursuing an economic policy of export-led growth. With the rising forces

Shubhradev Barai 5/14/202330

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.

Analysts say weak regulatory regimes cast a blight on the sector

Impact on MarketingIn Bangladesh, the cost of delivering information to customers over the Internet results in

substantial savings to senders when compared with non electronic delivery. Major

savings are also realized in delivering digitized products versus physical delivery.

Customer service can be greatly enhanced by enabling customers to find detailed

information online. Also, intelligent agents can answer standard e-mail questions in

seconds and human experts' services can be expedited using help-desk software.

Impact on ManufacturingE-business is changing manufacturing systems from mass production to demand-driven

and possibly customized, just-in-time manufacturing. Furthermore, the production

systems are integrated with finance, marketing, and other functional systems, as well as

with business partners and customers. Using Web-based ERP systems, orders that are

taken from customers can be directed to designers and to the production floor, within

seconds. Production cycle time is cut by 50 percent or more in many cases, especially

Shubhradev Barai 5/14/202331

when production is done in a different country from where the designers and engineers

are located.

Impact on TransportationThe use of the Internet to provide sell-side e-commerce has been widely adopted in the

transportation in Bangladesh. Almost every transportation company offers its customers

the ability to log onto its Web site to make bookings, and to track and trace shipments.

For example we are first time in Bangladesh to open the e-ticket booking option for the

bus transport passengers. Rather than rushing in the limited number of ticket counters and

waiting in the long queue for the tickets the passengers can easily buy from online using

local and international cards (Q-cash, VISA, Master, Nexus etc) of different banks. They

can also purchase the tickets through Mobile phones using M-Wallet balance without

having any internet connection. It will not only increase the market for those transports

that are getting the service but also help the passenger to save time and money.

Moreover, passengers can easily explore any information from the largest data bank for

the transport services of Bangladesh.

Shubhradev Barai 5/14/202332

Forecast of E-Business in BangladeshIncreasing internet penetration, consumers are readily turning to online shopping, which

has been fuelling the retail market in developed countries. The world B2C e-commerce

industry generated between $400 billion and $600 billion in 2010, according to

yStats.com, which estimates the market will generate somewhere from $700 billion and

$950 billion in 2015.

There were over 2 billion internet users worldwide in 2011, and it is forecast this number

will exceed 3 billion by 2015. Profit from B2C e-commerce represents less than 10% of

overall retail revenue in established markets like the UK and France, which are expected

to rise above the 10% mark in coming years. This figure falls to under 3% in less well-

established B2C e-commerce markets.

Social media continues to fuel the B2B e-commerce market, which aims to boost

electronic business process efficiency, reports T Systems. E-commerce is being

considered as a separate, profitable field of business, and intermediary actors are updating

their B2B business models, while embracing aspects of social media.

As today’s business activities are no longer confined within the boundary of its won

country, company should adopt new technology in order to cope up with current

situations. Now a day’s click only company is much more popular. It refers to company

who sales only its product on internet. The emerging popularity of such company has

encouraged other brick and mortar companies to adapt to the new technology to remain

competitive in the field. In the developed countries there is hardly any company which to

some extend does not use technology. In Bangladesh the situation is different.

Bangladeshi firms which operate locally do not use internet generally.

In Bangladesh most of the application of e-business is for export business. Export

oriented companies use this facility to contract customer. If the firm can not use this

facility it will fail to remain competitive in the industry.

Since Bangladesh is an underdeveloped country, there is a little possibility of prosperity

of e-business in Bangladesh. As the per capita income of our country is low, only few

customers can afford to use internet as well as order and purchase on internet. Our

infrastructure is so undeveloped and does not have the ability to support the whole

country with such facility. We all know that poverty is a curse. But no on can deny the

Shubhradev Barai 5/14/202333

fact that this curse is surrounding us from all sides. In our country the literacy rate is only

53% (UNICEF, 1999) and almost half the population lives below the poverty line. Most

people still remain unaware of consumer protection or consumer vigilance concept

The use of internet or e-commerce to be successful in Bangladesh largely depends up to

the philosophy of businessman. Its operation will be only successful when the business

man believes that it’s less costly, efficient, convenient, effective, faster and competitive.

In fact it’s not sufficient only believe of the businessman. In reality it must be profitable.

But in Bangladesh there are some conservative businessman who is not willing to change

their current venture style.

Some people believe that use of internet will reduce the employment rate, as result per

capita income will fall and national economy will on crisis. Some also think that using

internet or e-commerce is an expensive venture which can not be afforded.

The future of e-commerce in Bangladesh may be prosperous. Because day by day the

literacy rate of our country is increasing. Today’s young generation is being inclined to

technology more and more. They are very interested to discover any new technological

offering and advantages. Although ours is poor country majorities of our educated people

today has a personal computer and have access to the internet. Companies are also

becoming more and more technology oriented. To remain competitive in the industry, to

sustain in this competitive age of globalization it is must to use internet to get updated

information about market changes, opportunities and threats.

Now in Bangladesh there are many multinational companies operating with successful

operation. As they are multinational they have there own intranet service as well as

strong communication network of internet in the field of education will also notice that

the knowledge of computer is also a mandatory to know. In Bangladesh we can see now

that from the very beginning level of school the computer is being taught how to operate.

There are different types of compulsory subject on computer in different stages of

education. In our country most of the internet users are the students, teachers, employees,

employers, researchers and all classes of educated people. Almost all educated person has

access to the internet now a days. it is not at all a matter of being surprised that not only

the professional but also the housewives are also using computer and internet.

Shubhradev Barai 5/14/202334

This kind of inter users group are mainly the ultimate potential customers of all product

offered by e-commerce. As a result in spite of having poor and deprived population there

are lots of people who are blessed with all the resources, facilities and luxuries of the

society in order to enjoy superior facility provided by the new world. These classes of

people may make the future of e-business bright and a profitable venture in Bangladesh.

If we try to dream about making the future of e-business successful we have to increase

the use of internet and develop a favorable environment.

E-Business has great potential future in Bangladesh. So the govt. should be favorable

with their legal restriction and take necessary steps to make the country infrastructural

developed and eligible with favorable environment for all operation of e-business

successfully.

Without the help of govt. this is not possible o make the operation of it successful in

Bangladesh.

It is a matter of the very much delightment for us that our current govt. has taken a

project to make the country fully digital. If this dreams our Prime Minister Sheikh Hasina

comes true then it is not needed to say that there would be no alternative of implementing

e-business in all possible sector of business.

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SWOT AnalysisTo find out the viability of a particular product we must perform a SWOT Analysis of

the product. This will analyze the Strengths, Weaknesses, Opportunities, and Threats

of the particular product. For analyzing the performance of e-business in Bangladesh,

the following SWOT Analysis is considered.

Strengths E-business is new in our market. Only a few organizations are now offering

internet services in solving transaction problems. Most of the companies are

offering only accounting information online. Actual payment and delivery

procedure is not possible in all the organizations that are offering internet services.

So this product will enjoy the benefit of a first mover.

It is cheap both for the companies and the customers. The companies will be

able to lower down the overhead costs and make more profit out of it. E-business

will require less manual workers. Again the customers will be able to save time as

well as money for their transaction needs.

E-business is convenient as the service is available all the time at just a click

away.

Weaknesses Security breakdown: The system will have a problem with the identification of

the individual who is initiating the transaction. In Bangladesh, the identification of

an individual is not yet supported digitally. So there will be a problem in moving to

the Internet era for business purposes just now. First we will have to develop a

digital database of the users of the internet business services.

Transaction can be cancelled only via internet. The internet infrastructure of our

country is not that much supportive to provide all time access to the web. So there

will be a problem in executing the service with its full functionality.

Opportunities Non- branch business is becoming popular in our country. Many e-based

companies are now trying to offer non-branch business facilities. A person can

withdraw or deposit money in any branch of the organization he has a membership

Shubhradev Barai 5/14/202336

with them. So moving to internet business will allow the companies to offer non-

branch business facilities.

The internet services are becoming very common to us. So a service offered

through the internet will be widely accepted in the near future.

Threats People have concern about security and privacy. They like to feel their money

with their hand. They actually don’t believe in virtual money transfer.

In the field of IT new technology is coming every day. The one which is very

popular today might get obsolete tomorrow. So to have a competitive edge over the

competitors the banks must always update their services.

The movement towards online business might marginalized the customers who

do not have internet access or who are not technologically sound.

Despite the presence of online Internet service in Bangladesh, its scope is largely

underutilized. The reasons include high service charges, lack of awareness, poor

telecommunication systems, government policy, low buying power of potential

clients, and lack of institutional support.

Shubhradev Barai 5/14/202337

FindingsThe Findings prevailing as well as to be encountered in Bangladeshi perspective can be

analyzed under the following headings: —

1. Mass Illiteracy Level

2. Lack of ICT Knowledge and Skills

3. Infrastructure

4. Power Disruption

5. Establishment Expenses

6. Lack of Awareness and Understanding of the Value of E-Banking

7. Unavailability of E-Business Practices

8. Legal Framework

9. Socio-Cultural Aspects

10. Security

11. Standardization of Software

12. Lack of Initiative from Central Bank

13. Lack of Compliance

14. Lack of ATM

15. Employment Issue

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RecommendationsTo make e-business successful in our country we need the help of all aspect of people as

well as govt. and business industry to cope up or overcome the following limitations:

1. Access to computer of household should be increased

2. The cost of using internet should be affordable to general people

3. User of software should be more simple for the easier use

4. Its use should be made as easy as TV and newspaper so that it require

unsophisticated skill.

5. The e-business should be more attractive to user in order to offset the

limitation of lack of experience of meeting directly with merchant and

customer. 6. Voice over Internet Protocol (VoIP) and private international gateway for voice and

data should be allowed.

7.  The number of pre-shipment agents (PSI) should be increased. The size of fines

and penalties on PSIs should be increased for breach of rules and regulations.

8. Posting of government documents and publications including budgetary

information on the Web should be instructed.

9. Contracts and other alternates to Letter-of-Credit (L/C) should be allowed as legal

methods for international transactions.

10. Foreign exchange controls on travel and for business should be relaxed.

11. BTTB‟s monopoly in the nationwide long distance services should be ended.

12. The control of foreign exchange should be liberalized gradually, and issuance of

International Credit Cards should be allowed.

Government officials are to be oriented on the benefits of e-commerce. For instance short course

can be offered at training centers such as the Public Administration Training Center (PATC).

Shubhradev Barai 5/14/202339

ConclusionA key reason why e-business, especially the business-to-business segment, is growing so

quickly is its significant impact on costs associated with inventories, sales execution,

procurement, intangibles like banking, and distribution costs. If these reductions become

pervasive, e-business has the potential to be the application that ushers in the large

productivity gains. Achieving these gains is therefore contingent on a number of factors,

including access to e-business systems and the needed skills. However, what is unique

about e-business over the Internet and the efficiency gains is that it promises the premium

placed on openness. To reap the potential cost savings fully, firms must be willing to

open up their internal systems to suppliers and customers. This raises policy issues

concerning security and potential anti competitive effects as firms integrate their

operations more closely

Shubhradev Barai 5/14/202340

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