Chapter -08

Concept of E-Commerce
Electronic Commerce (E-Commerce) refers to all forms of business transactions conducted
over an electronic network, primarily the Internet. It includes the exchange of goods,
services, information, and payments between different parties—whether businesses,
consumers, or government entities—through digital platforms.
It covers not only buying and selling but also marketing, customer service, supply chain
management, and electronic data interchange (EDI).
Evaluation of E-Commerce Growth
Initially, E-commerce was limited to simple online retailing and information exchange,
where companies used websites mainly to display products and contact details.
However, with the rapid development of information and communication technology (ICT),
especially after the widespread use of the Internet, smart phones, and digital payment
systems, E-commerce has evolved into a multi-dimensional ecosystem. It now includes
online marketplaces, mobile apps, digital banking, and even AI-based personalized
shopping experiences.

In Bangladesh, the E-commerce industry began in the early 2000s, but growth was slow
due to poor Internet access and lack of digital literacy. From 2010 onwards, the sector grew
rapidly with improvements in mobile Internet connectivity and the rise of mobile financial
services (MFS) such as bKash, Nagad, and Rocket.
COVID-19 further accelerated online shopping behavior, leading to the expansion of
platforms like Daraz, Chaldal, and Foodpanda.

Advantages of E-Commerce
1. Convenience: Customers can shop from anywhere at any time without visiting a
physical store. It offers 24/7 accessibility.
2. Cost Reduction: Online businesses require less physical infrastructure and staff,
reducing overhead and operational costs.

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 3. Global Reach: A local business can reach international customers easily through
digital platforms and online marketing.
4. Faster Transactions: Orders, payments, and deliveries can be processed instantly
through secure online systems.
5. Customization and Personalization: Businesses can use data analytics to study
customer preferences and offer personalized recommendations.
6. Better Inventory Management: Automation and real-time data help track stock
levels, reducing overstocking or shortages.
7. Increased Market Efficiency: E-commerce eliminates middlemen, ensuring better
pricing and direct communication between sellers and buyers.
8. Enhanced Customer Feedback and Loyalty: Online reviews, social media
interaction, and digital support systems improve brand trust and loyalty.

Traditional vs. Electronic Business

Electronic Business (E-Business
Aspect Traditional Business
/ E-Commerce)
Global accessibility through the
Market Access Limited to local or regional area
Internet
Operation Hours Fixed (e.g., 9 AM–9 PM) 24/7 availability
Lower infrastructure and
Cost High fixed and operating costs
transaction costs
Customer Virtual/Online via chat, email, or
Face-to-face
Interaction social media
Digital payments, cards, mobile
Payment System Cash or cheque-based
banking, etc.
Automated and real-time
Inventory Manual tracking
monitoring
Speed of
Time-consuming Instant and efficient
Transactions
Traditional advertising (TV, Digital marketing, SEO, and social
Marketing
print) media campaigns

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IT Issues in Business
While Information Technology (IT) is the backbone of E-commerce, it also introduces
several technical and security challenges.
1. Cyber security Threats: E-commerce platforms are vulnerable to hacking,
phishing, and data breaches. Protecting sensitive information like credit card details
and passwords is critical.
2. Privacy Concerns: Businesses must ensure the protection of customers’ personal
and financial data in compliance with data protection laws.
3. System Reliability: Technical problems such as server downtime, website crashes,
or slow loading can lead to customer dissatisfaction and financial losses.
4. Digital Payment Risks: Online frauds, unauthorized transactions, and weak
payment gateways can harm business credibility.
5. Integration Challenges: Integrating various systems (e.g., website, inventory
management, ERP, and CRM software) can be complex and costly.
6. Legal and Ethical Issues: E-commerce must comply with IT laws, cybercrime
prevention laws, electronic contract laws, and consumer protection regulations.
7. Technology Obsolescence: Rapid changes in technology require continuous
upgrading of software, servers, and security systems.

Online Business Models

E-commerce operates through different business models depending on the parties
involved:
B2C (Business-to-Consumer): Direct selling of goods or services to consumers.
Example: Amazon, Daraz, Pickaboo, Chaldal.
B2B (Business-to-Business): Transactions between businesses such as wholesalers and
retailers. Example: [Link], Indiamart.
C2C (Consumer-to-Consumer): Online platforms that allow individuals to sell directly to
others. Example: eBay, [Link].

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C2B (Consumer-to-Business): Individuals offer products or services to companies.
Example: Freelancing on Fiverr, Upwork.
G2C (Government-to-Citizen): Government services provided online to citizens.
Example: Online utility bill payments, tax filing systems.
Application of E-Commerce in the Context of Bangladesh
E-commerce has become a key driver of digital transformation in Bangladesh across
multiple sectors:

a) Retail Sector: Platforms like Daraz, AjkerDeal, and Pickaboo provide nationwide
product delivery. Chaldal specializes in online grocery shopping with same-day delivery in
major cities.

b) Food and Grocery Delivery: Foodpanda, HungryNaki, and Pathao Food revolutionized
food ordering and delivery services.
c) Banking and Finance: Widespread adoption of mobile financial services (MFS) such as
bKash, Nagad, Rocket, and Upay has enabled secure cashless transactions.

d) Education Sector: Platforms like 10 Minute School and Bohubrihi provide online
learning, exam preparation, and professional skill courses.
e) Government Services: E-Governance initiatives enable citizens to pay taxes, register
births, and apply for land documents online.

f) Rural Commerce: Thousands of entrepreneurs use Facebook pages and messenger

commerce to sell clothing, handicrafts, and homemade food across the country.
Challenges Facing E-Commerce in Bangladesh
1. Lack of trust due to past scams and frauds.
2. Poor logistics and delayed delivery services.
3. Limited Internet access in rural and remote areas.
4. Weak legal framework for online dispute resolution.
5. Cyber security concerns and lack of digital literacy.

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E-Commerce-Based Business Ideas (Bangladesh Context)
1. Online Grocery Delivery Platform: An app-based service offering fresh produce,
dairy, and essentials with same-day delivery in urban areas.
2. Digital Handicraft Marketplace: An online platform connecting rural artisans to
domestic and global buyers to promote local products and cultural crafts.
3. Online Pharmacy: Provides doorstep delivery of medicines, health products, and
doctor consultation services through verified prescriptions.
4. Freelance Service Portal: A local version of Upwork, connecting Bangladeshi
freelancers to local businesses for short-term projects.
5. E-Learning Platform: Offers affordable academic and professional training courses
in Bengali, focusing on skill development and exam preparation.
6. Online Bookstore: Specializes in academic textbooks, research materials, and e-
books for university and college students.
7. Fashion and Boutique Store: Sells locally made clothing, jewelry, and accessories,
integrating virtual fitting and home delivery.
8. Event Management Platform: Provides booking for event planners, decorators,
and catering services through a digital platform.
9. Used Electronics Marketplace: A secure digital marketplace for buying and selling
used phones, laptops, and gadgets with verified sellers.
10. Online Agriculture Supply Chain: Connects farmers directly with consumers or
wholesalers, ensuring fair pricing, transparency, and reduced middlemen.

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 Chapter-9
Corporate Social Responsibility (CSR)
Corporate Social Responsibility (CSR) refers to a business’s voluntary (or increasingly,
required) commitment to behave ethically and contribute to economic development while
improving the quality of life of its workforce, the local community and society at large, and
safeguarding the environment. It moves the firm beyond a sole focus on profit
maximization to include social, environmental and governance responsibilities (often part
of the “triple bottom line” approach).

Key Areas of CSR

Environmental Protection
o Activities include: adoption of energy efficient technologies, waste reduction programs,
recycling initiatives, use of renewable energy, “green” buildings or manufacturing,
reducing carbon footprint, biodiversity conservation.
o Example: A company switching to solar panels for its operations or investing in
wastewater treatment plants.
o Issues: Many firms still treat environmental activities as philanthropic rather than
integrating into core operations; measurement of impact is weak; dependency on
voluntary disclosure.
Employee Welfare
o Activities include: fair wages, health and safety standards, training and development,
career progression, work life balance, inclusive workplaces (gender, minority groups),
participation and retention of employees.
o Example: A bank offering skill development programs and mental health support to its
staff.
o Issues: In many contexts, employee welfare gets less attention relative to external
community projects; also, the link between employee welfare and business outcomes
(e.g., productivity) is not always captured clearly in reports.
Community Development
o Activities include: education support (scholarships, schools, adult literacy), healthcare
services (clinics, health camps), infrastructure in local communities (roads, sanitation),
 livelihood programs (micro-finance, entrepreneurship support), disaster relief
programs.
o Example: A bank or conglomerate offering school scholarships for under-privileged
children; relief distribution after floods.
o Issues: Community projects often are one off or short term; may not build
sustainability or address root causes; some geographic or beneficiary bias (e.g., in
regions closer to business operations).
Consumer Protection
o Activities include: ensuring product/service safety and quality; honest advertising;
transparent information; responsible marketing; consumer education; after sales
service; complaint management mechanisms.
o Example: An e-commerce company ensuring return policies is clear and safe for
consumers.
o Issues: In many developing countries, this is weakly regulated; CSR disclosures often
focus less on consumer issues and more on philanthropy/community.
Ethical Governance
o Activities include: compliance with laws and regulations; anti-corruption policies;
independent oversight (board, audit); stakeholder engagement; transparency of
financial and non-financial disclosures; aligning corporate strategy with social values.
o Example: Publishing a detailed CSR report with quantifiable metrics, audited by third
party.
o Issues: In many firms, CSR is still treated as separate from governance; many
disclosures lack verification; “green washing” or “CSR washing” risks exist.
Benefits of CSR
 Builds and enhances corporate image and reputation, thereby improving brand
equity.
 Develops stronger customer loyalty and trust — customers increasingly favor
socially responsible companies.
 Attracts socially responsible investors (SRI/ESG funds) and may improve access to
finance.
  Improves employee morale and helps in attracting and retaining talent, as many
employees increasingly wish to work for socially responsible firms.
 Helps mitigate risks (reputation, regulatory, environmental) and can lead to long-
term value creation rather than short term profit focus.
 Contributes to sustainable development of society and environment, aligning
business with global goals such as the Sustainable Development Goals (SDGs).

CSR in Bangladesh —Opportunities & Challenges

Current Scenario
 The regulator for banks, the Bangladesh Bank (BB), issues guidelines for CSR by
scheduled banks and financial institutions. According to one source, banks between
July 2024 and June 2025 reported significantly reduced CSR spending.
 For example, during January-June 2025 banks spent around Tk 150.56 crore on
CSR activities, down from approximately Tk 309 crore in the same period in 2024.
 In 2024, spending by banks dropped around 33 % year-on-year, from a higher base
in 2022.
 Sector wise, in 2024 banks reduced their spending in education from Tk 64 crore in
H1 to Tk 44 crore in H2, while health and environment/climate change mitigation
increased slightly in the H2 period.
 The central bank’s guideline suggests banks may allocate up to 1 % of previous
year’s net profit to CSR, with at least 30% for education, 30% for health, 20% for
environment/climate, and remaining 20% for other areas (in certain cases).
Key Challenges
 Profitability pressure: As in the banking sector, many firms in Bangladesh are
experiencing financial stress (bad loans, cost pressures, competition). This impacts
CSR budgets.
 Regulatory & governance weaknesses: While guidelines exist (e.g., for banks to
allocate certain proportions of profits to CSR), enforcement and monitoring appear
weak. Many firms do not meet recommended allocations or direct them into
less‐monitored categories.
  Strategic linkage: CSR in many firms remains peripheral—treated as
“philanthropy” rather than integrated into the business model, value chain and
governance systems.
 Transparency and measurement: Many corporate CSR disclosures lack detail on
impact, depth, strategic alignment or sustainability of initiatives.
 Focus & distribution: CSR efforts may be concentrated in certain visible sectors
(e.g., education, health) and organizations, while others (environment, marginalized
communities, supply chain workers) receive less attention.
 Macro‐environmental risks: With Bangladesh being vulnerable to climate change,
supply chain disruptions, and global market pressures (especially for export
oriented firms), CSR and sustainability become more demanding—but many firms
may lack resources, skills or incentives to respond fully.

Strategic Opportunities & Way Forward

 Firms in the corporate sector can embed CSR into core strategy, linking it to
business strategy, reputation risk, supply‐chain resilience and long term value
creation.
 Improved reporting and governance: Adopting standardized CSR disclosure
frameworks, third party auditing, and stakeholder engagement.
 Broadening the scope of CSR: Move from short term philanthropy to long-term
community development, environmental sustainability, inclusive growth.
 Strengthening link with sustainability: Align CSR with environmental sustainability
(e.g., waste reduction, green technology), social sustainability (e.g., labor rights, local
engagement) and economic sustainability (business viability).
 Leveraging public private partnerships: Collaboration with government, NGOs,
communities to scale CSR initiatives and make them more effective.
 Recognize that CSR in the corporate sector is increasingly linked to ESG
(Environmental, Social, Governance) norms, global value chain demands, investor
expectations (e.g., multinational companies sourcing from Bangladesh increasingly
expect strong social and environmental practices).
Sustainability in Business
Business sustainability implies that companies make decisions and conduct operations in a
way such that they meet the current generation’s needs without compromising the ability
of future generations to meet theirs. It is not simply about “green” or “eco-friendly”
practices, but a holistic approach balancing economic viability, social responsibility and
environmental stewardship (sometimes described as the three pillars: economic, social,
environmental) — often referred to as the triple bottom line (Profit-People-Planet).
Three Pillars of Sustainability (with deeper elaboration)
 Economic Sustainability
o Ensuring long-term profitability, efficient use of resources, prudent risk
management, and the ability to reinvest for future growth.
o Implications: Firms must manage business cycles, technological change,
global competition, and shifting consumer preferences; must invest in
innovation, digitalization, and addictiveness.
 Social Sustainability
o Ensuring that business operations support social equity, fair labor practices,
community development, health and safety, inclusiveness and human rights.
o Implications: Firms must go beyond compliance to proactively foster positive
social outcomes, e.g., ensuring supply chain labours fairness, community
well-being, local employment, stakeholder participation.
 Environmental Sustainability
o Ensuring that operations do not degrade natural resources, ecosystems or
climate; that resource use (energy, water, materials) is efficient, circular
economy principles are adopted, and firms adapt to climate change risk.
o Implications: Firms must measure and minimize their environmental
footprint, adopt renewable energy, apply waste reduction, and incorporate
ecosystem resilience into business planning.
Strategies for Sustainable Business (Elaborated)
  Adopt renewable energy and energy efficiency: use solar, wind, energy efficient
machines, building management systems.
 Waste reductions, material reuse/recycling circular economy models: rethink
production processes, product lifecycle, and packaging.
 Sustainable supply chains: source ethically, engage suppliers on sustainability, and
ensure whole value chain meets standards.
 Innovation of eco friendly products/services: design for environment, green
products, low carbon services.
 Stakeholder engagement and reporting: engage employees, communities, investors;
publish sustainability reports; set targets (e.g., carbon reduction).
 Risk management for climate change and resource scarcity: assess and adapt
business to climate risks (floods, cyclone, sea level rise), regulatory changes (carbon
taxes), prepare business continuity.
 Integration of sustainability into corporate strategy: making sustainability part of
core strategy and governance.
Importance of Sustainability
 Improves brand reputation and competitive differentiation in markets where
consumers and investors care about sustainability.
 Reduces costs (long-term) through efficiency in energy, materials, reduced waste,
and improved operations.
 Opens new markets and innovation opportunities (green products, circular
economy services).
 Meets regulatory expectations and global standards (e.g., SDGs, Paris Agreement,
ISO standards).
 Supports long term viability of the firm and society: helps mitigate systemic risks
(climate change, social unrest, resource depletion) which impact business.
 Attracts “sustainability linked” finance, ESG investments, green bonds.
 Aligns with the global move toward sustainability and responsible business,
improving access to global value chains.
Sustainability in the Context of Bangladesh
 Bangladesh is highly vulnerable to climate change (sea level rise, floods, cyclone,
and river erosion) and thus environmental sustainability is especially critical.
 Some firms are beginning to adopt sustainable business practices, e.g., in the textile
sector, recycling of textile waste, adoption of sustainable supply chain practices.
 However, many firms in Bangladesh still face significant challenges: limited
technological infrastructure, high cost of renewable energy, weak
regulation/incentives for sustainable practices, low awareness in SMEs and informal
sectors.
 Supply chain pressures: Export oriented industries (especially ready-made
garments) face international buyer pressure to adopt sustainability standards
(labor, environment), which presents an opportunity for Bangladesh to upgrade.
 For sustainability to be fully embedded, firms in Bangladesh need to integrate their
business strategy with sustainable practices, invest in innovation, training, and
strengthen governance.

Future of Business in Bangladesh

Key Trends and Prospects
 Digital Transformation
o Rapid growth in e-commerce, fintech (mobile banking, digital payments), ICT
services, cloud computing. Bangladesh’s large young population, increasing
internet/mobile penetration, and supportive government policies create a
favorable environment.
o Example: Mobile wallet services, ride-sharing, e-commerce platforms
expanding in Bangladesh.
 Green and Inclusive Growth
o As global markets and regulators place more emphasis on sustainability and
ESG, Bangladeshi firms can leverage green business models (renewable,
recycling, circular economy) and pursue inclusive growth (creating jobs,
reducing poverty).
  Entrepreneurship and Startups
o Youth entrepreneurship is rising; start-up ecosystems are developing (tech
hubs, incubators, co working spaces). Firms focusing on digital, green, social
entrepreneurship present new growth avenues.
 Globalization and Trade Expansion
o Bangladesh can further integrate into global value chains, expand exports,
benefit from regional cooperation (BIMSTEC, SAARC), and benefit from trade
agreements.
 Industrial Diversification
o Beyond traditional sectors (textiles/garments), growth potential exists in
pharmaceuticals, ICT, agro processing, services (logistics, health, and
education), green industries (solar, recycling).
 Sustainability linked Finance and ESG Investing
o As global capital increasingly flows to sustainable businesses, Bangladeshi
firms that adopt ESG practices may gain better access to finance.
 Skill Development and Human Capital
o With changing technologies (AI, IoT, automation) and demands of the Fourth
Industrial Revolution, Bangladesh needs to up skill workforce, especially
youth and women, to stay competitive.
 Resilience to Climate Change and Environmental Risk
o Given Bangladesh’s vulnerability (flooding, coastal erosion, cyclones), firms
must incorporate resilience into business models and investments (for
example, sustainable construction, flood resilient infrastructure).
Challenges
Infrastructure bottlenecks: transport, power, logistics, internet connectivity still need
improvement.
 Governance and institutional weaknesses: regulatory delays, corruption, weak
enforcement impede business and sustainability efforts.
 Skill gaps and technological lag: many firms, especially SMEs, lack capital,
technological adoption, skilled workforce.
  Environmental degradation and climate risk: firms face physical risks (flood,
cyclone) and transitional risks (regulations, global supply chain pressures).
 Access to finance: although opportunities exist, many firms lack access to
affordable finance for digital/green investment.
 Market competition and global pressures: Bangladesh must upgrade
productivity, move up value chain, and maintain compliance (labor, environment) to
remain competitive.
 Regional disparities: Growth may concentrate in certain urban areas; remote and
rural regions may be left behind.
Way Forward
 Develop and implement integrated policies that support digital transformation,
green growth, entrepreneurship, skills development and sustainability.
 Strengthen frameworks for ESG/CSR reporting, encourage transparency, third‐party
verification, standardization of disclosures.
 Promote sustainable finance: green bonds, sustainability linked loans, incentives
for firms investing in green/digital technologies.
 Build partnerships between government, private sector, academia, NGOs: for
technology transfer, skills training, innovation hubs, research and development.
 Encourage firms to embed sustainability and responsibility into core strategy, not
just as peripheral CSR.
 Focus on inclusive growth: ensure that benefits of business expansion reach
women, rural populations, and marginalized groups.
 Strengthen infrastructure, especially digital infrastructure, renewable energy,
logistics, to support new business models.
 Enhance firm‐level capacity: training, technology adoption, supply chain
upgrading, certification (ISO, environmental, labor).
 Geographic and sector based diversification: encourage industrial clusters
outside Dhaka, development in smaller cities and rural regions.
 Build resilience to climate change: firms adapt their operations, invest in resilient
infrastructure, and factor in environmental risks in business planning.