Arafat Bin Touhid
Assistant Director of Research & Publication | BIZ BEE

It is no secret that the market economy is highly volatile, and prehistorically, every global event significantly impacted the existing market. COVID-19 pandemic is no exception. Due to its global repercussions, we have experienced a dramatic rise in online activities. And its impact on e-commerce is impeccable. Although e-commerce was already a growing sector, the movement restrictions induced by the pandemic expanded global online retail sales’ share of total retail sales from 16% to 19% in 2020. However, in Bangladesh, e-commerce growth is significantly more prominent; it is growing by almost 75% every year and is projected to be worth $1 billion. Though e-commerce is growing, customer confidence in these e-commerce sites is a major concern that experts have delineated on multiple occasions. If e-commerce growth is not complemented by consumer confidence, then it is highly likely to turn into an abrupt bubble. The result of a bubble burst will not only be catastrophic for the consumers, but it will also cause a disturbing demise of an aspiring sector. Therefore, before we jump to any conclusions, it is crucial to explore why customer confidence is knee-high and how it affects e-commerce. First of all, we need to remember that most consumers are shifting from their choice of in-store shopping to online shopping. In-store shopping allowed consumers to compare, collate, touch, feel and try a product. However, this is extremely limited in e-commerce sites, even when 51% of consumers still want to compare their products. This limitation significantly lowers consumer confidence when it amalgamates with other drawbacks. For instance, almost 11% of customers are concerned about the possibility of damage to fragile items. On the other hand, nearly 5% of customers fear scams and fraud. Unfortunately, due to the unregulated market, online scams and frauds have become a significant threat to Bangladesh’s e-commerce industry which can have a long-lasting negative impact on consumer confidence. However, this lack of confidence can be boosted easily if the seller can develop trustworthy relations with the customer through public relations and quality assurance. Besides, the flexibility of returns and exchanges of goods is an essential factor that works behind consumer confidence. Almost 72% of consumers are likely to purchase from online platforms again if the return policy is relatively easy. At the same time, Fast and effective delivery systems can also be a vital asset for a brand since almost 4% of customers report that slower delivery significantly lowers their confidence. Moreover, to restrict market exploitation and scams, strong regulations must be implemented to provide consumers with a safety net in any problems that will help consumers establish their confidence. Given that online dependency is just at its beginning, the growth of e-commerce is not going to slow down anytime soon. However, consumer confidence in the online market must grow simultaneously. Otherwise, this sector will cease to exist. And all these effective services and regulations discussed above can play a pivotal role in building customer confidence and a healthy e-commerce sector that can attract aspiring entrepreneurs to introduce further innovations to the market.