E-commerce sales to reach $3b in 4 years

Bangladesh’s e-commerce market stands at $1.6 billion currently and will double to $3 billion by 2023 on the back of a digital foundation laid down by the government and a young and tech-savvy population, a German research firm said recently. In terms of e-commerce revenue, Bangladesh is ranked 46th in the global ranking, according to Statista, the online portal for statistics that makes available data collected by market and opinion research institutes and that derived from the economic sector and official statistics. Fahim Mashroor, chief executive officer of AjkerDeal.com, one of the popular e-commerce sites, contradicted the Statista figure, saying the market size would be a maximum $500 million. Industry players say the growing smartphone penetration with 4G network and rising purchasing power of consumers are propelling the e-commerce industry across the world, and Bangladesh is not out of the market. Ahmed, a community leader of Facebook in Bangladesh, said the industry should be thankful to the Information Communication Technology Division for its enormous support extended to the sector in the last five years. According to the Statista report, the online fashion market in Bangladesh is currently worth $598 million and it has the prospect to reach up to $1.24 billion by 2023. Electronic products amounting to $457 million and furniture and appliances worth about $196 million are sold online. The online sales of furniture and appliances will would go up to $352 million after four years. Online sales of toys and hobby products stand at $260 million and it can almost be double to $442 million by 2023. Ahmed, who heads the Women and e-Commerce Forum, a Facebook platform that promotes local products. e-CAB leaders say the e-commerce market is not more than Tk 3,000 crore, $350 million, with 50,000 deliveries daily. Bangladesh has laid down an exemplary digital foundation and is striving to prepare its citizens for the digital future, an UNCTAD assessment of the country’s readiness to engage in e-commerce shows.

Source: https://www.thedailystar.net/business/news/e-commerce-sales-reach-3b-4-years-1841428

New Investment Rules: Life insurers’ deposits with NBFI curtailed

The Insurance Development and Regulatory Authority (IDRA) has recently come up with a set of new investment rules for life insurance companies in a bid to minimise risks and ensure safety of policyholders’ money. The prime one is a reduction in the amount of asset a life insurance provider can keep in a non-bank financial institution (NBFI). It has been limited to 10 percent, which might deepen the ongoing liquidity crisis of the lenders. As per previous rules framed in 1958, the insurers were permitted to keep 50 percent of their assets in the form of fixed deposits in banks or the NBFIs. There was no specific mention. Insurance companies usually opted for the NBFIs as they offered higher returns than banks. As had been before, life insurance companies must invest at least 30 percent of their funds on government securities. Of the remaining 70 percent, 10 percent will be allowed to be kept with the NBFIs as fixed deposits. According to the new regulation, life insurers will be able to invest 15 percent of assets in bonds issued for development of physical infrastructure and other bonds with rating of “AA” or above. Around 10 percent of assets can be invested in debentures of companies or securities issued by city corporations. A company will also be able to invest 25 percent of its assets in ordinary shares or preferential shares of companies but not junk stocks. The amount of investment in mutual funds and unit funds will have to be within 20 percent of the assets. A life insurer will be able to invest 20 percent of its assets in undisputed immovable assets located within city corporations and municipalities. The companies will have to submit statements informing of the assets within 30 days of completion of audits on investment. They will have to file investment returns three times every year within 21 days from the last day of March, June and September. According to the IDRA, currently there are 32 life insurance companies in the country and their assets totalled Tk 38,710 crore in 2018.

Source: https://www.thedailystar.net/business/news/new-investment-rules-life-insurers-deposits-nbfi-curtailed-1841422

Middle Eastern suppliers eye Bangladesh

Middle East-based cement raw materials exporters are keen to expand their sales in Bangladesh as the country is increasingly scaling up its manufacturing capacity to produce the key construction material to feed the growing economy. Of the imports, clinker accounted for $900 million and the rest cost $450 million, according to Ikram Ahmed Khan, managing director of Shun Shing Group, Hong Kong. Cement industry grew at over 15 percent to reach $3 billion in 2018. This tremendous growth rate is enough to draw foreign raw material suppliers, market players said. The demand for raw materials is increasing in line with the expansion of the manufacturing capacity. The demand for the raw materials of the cement industry in Bangladesh will double within next four years. So, my company sees room for business expansion. In 2018, the company exported two million tonnes of gypsum to Bangladesh. Similarly, Al Jood Natural Resources has been exporting gypsum to Bangladesh for the last five years and supplied 50,000 tonnes of gypsum last year, said Ahmed Murshid, marketing manager (international) of the company. The local production of fly ash would save $130 million annually. Cement manufacturers import clinker, gypsum, fly ash, and iron slag from China, Hong Kong, India, Indonesia, Thailand, Japan, Korea, Malaysia, Oman, and the UAE. There are around 125 cement manufacturing companies in the country, out of which 37 are in operation. The total production capacity of the cement mills was 58 million tonnes in 2018.

Source: https://www.thedailystar.net/business/news/middle-eastern-suppliers-eye-bangladesh-1841425