The Financial Express

Pandemic disrupting F-commerce businesses

| Updated: May 22, 2020 23:36:20

Pandemic disrupting  F-commerce businesses

Running businesses through Facebook is very popular in Bangladesh. The formal term used for such businesses is called F-commerce businesses. Facebook has been a source for thousands of micro entrepreneurs to run businesses from the comfort of their homes. According to the e-CAB (e-Commerce Association of Bangladesh), there were over 50,000 F-commerce pages in Bangladesh at the end of 2019. During this Covid-19 pandemic, the nation has been on general holidays since March 26, 2020 till date to ensure public safety. During this period, all businesses across various sectors have been massively affected due to fall in consumer demand, disruption in supply chain, adverse impacts on the economy, etc. As part of that, F-commerce businesses are facing a myriad of challenges. Below is an analysis of this situation.

Reduced consumer demand for non-essentials

The pandemic is causing a period of uncertainty and as a result, the purchasing pattern of consumers has changed. Consumers have shifted to purchasing essential items such as medicine, food, and grocery items. However, most F-commerce businesses in Bangladesh sell non-essential items including clothing, lifestyle items, bakery, arts and crafts, jewelry, etc. As a result, most of the F-commerce businesses selling non-essential items have taken a huge hit in terms of sales. On the other hand, businesses selling grocery items have experienced rapid growth in customer demand. Ahmed Mostafa, a regular customer of a popular F-commerce page shared, "I now look to order more online. This lockdown has made me aware of the shops that I didn't know existed. For the first time I am ordering items like raw fish and meat from Facebook pages. Many of the pages do not have a separate website for ordering, thus I simply message the page with my order details and wait for the admins to confirm my order."

Logistics and delivery issues

 The first month of the lockdown was very puzzling for online businesses as they were not sure whether the logistics delivery provider was safe. As a result, many of the F-commerce businesses halted their sales. Gradually logistics delivery providers such as E-courier and Pathao Parcel developed a new model of delivery that minimizes human contact and ensures that the delivery persons are equipped with masks while making the delivery.

Production issues

Factories were closed during the early periods of the lockdown which meant production for online clothing businesses and lifestyle items were completely halted. At the same time, many of these businesses import their raw materials but importing was restricted due to concerns of the pandemic. China is a popular source for many of our online businesses to import raw materials. Since Covid-19 originated from China, raw materials sourcing was a challenge for our businesses even before the national lockdown began.

Cancelled marketing campaigns

Pohela Baishakh and Eid-ul-Fitr are two of the most celebrated festivals in our nation. As these occasions are celebrated by the majority of our population, they are great opportunities for F-commerce businesses to launch new products and offer attractive discounts for the customers. In advance, many F-commerce businesses ordered raw materials and prepared product stock for Pohela Baishakh and Eid-ul-Fitr but are not launching any products and digital campaigns as it is not suitable due to the current state of the society.   

 How can F-commerce businesses move forward

Fahim Islam Shetab, the co-founder of the trendy clothing page, Gorur Ghaash, shares the experience of how he and his team reacted to the lockdown: "We didn't take any orders and halted all sales and marketing activities in the first month of the lockdown as we were concerned about the safety of our employees and our customers. We planned to launch some new clothing collections but due to the current situation, we had to postpone it. Fortunately, due to these preparations for this campaign, we have some stock for Eid. While we halted our operations, we thought of ways to engage our customers. We had a Photoshop Friday where we asked our customers to send in pictures of them and their friends and we would Photoshop them. This lockdown motivated us to change some of our business policies to adapt to the current context. This crisis also brought new facilities for our organisation as well. Previously we only accepted payment via bKash but now we integrated SSLCOMMERZ as well so now people can make cashless payments via their debit and credit cards as well. We slowly resumed our operations this month but are still not going for production as we've adapted our ways to take make no compromises with health and safety". Gorur Ghaash is a great example of how F-commerce businesses in Bangladesh can adapt their business policies to effectively conduct business in a changing business landscape.

Mehruk Hasan, the founder of Brownie Hut, an F-commerce business selling desserts such as cakes and brownies, changed her business policies by taking precautionary measures to ensure food safety delivery. Starting from extra packaging to sanitizing the parcels, contactless payments, and ensuring our delivery personnel are wearing the essentials to prevent the spread of the virus. She shared, "This virus outbreak didn't stop our operations. Our ordering time remained 11 am to 5 pm to ensure delivery before Iftar. Brownie Hut is striving to make the quarantined Ramadan sweeter".

To run business in this lockdown, firstly, F-commerce organisations must ensure the safety of their stakeholders such as employees, customers, logistics partners, etc. Secondly, these businesses must facilitate customers by accepting cashless payments via popular platforms such as bKash and SSLCOMMERZ. Thirdly, prepare contingency plans to survive the rest of the lockdown and develop a business continuity plan to resume business operations at full scale once the lockdown ends. 

One positive trend F-commerce businesses can look forward to is that the pandemic has encouraged more customers to shop online. As a result, many new customers were able to enjoy the convenience of online shopping for the first time. Online shopping is very habitual and even after the general holidays end, some of these customers can be expected to stick to it rather than going to physical stores. At the same time, many businesses have adopted cashless payment solutions. This takes the nation a step closer to becoming a cashless society.  

The writer graduated from IBA, University of Dhaka and is currently working at a reputed non-banking financial institution (NBFI).

He can be reached at nafisabrar@gmail.com


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