Convenience Conundrum: Why Bangladesh Doesn’t Have Amazon


B U S I N E S S – B A N G L A D E S H


Fairuz Shams


After nearly two years, Spotify is having a major expansion again, and this time it’s coming to 80+ countries, including Bangladesh. While Spotify has been steadily providing its services to more and more countries every year since its inception, it has shown a marked exception in expanding to Asian countries, more particularly, countries that provide an unstable platform for overseas business and entertainment brands.

However, Bangladesh fortunately does not fall under that specific category, having both a market demographic and a previous history of collaborating with overseas brands. But there must’ve been a reason for Spotify not to expand its services to Bangladesh, considering the fact that the number of people using it through convoluted underground means really isn’t in the best interests of either party.

And that reason is that while Bangladesh has all the spirit for a successful, profitable collaboration, it’s a tiny bit confused on the technical part.

You see, while Bangladesh has a healthy legal and legislative model for export and small-scale import, it doesn’t have the legislative provisions required for a major overseas company or business to enter the “local market”, especially when the company is proposing an online model for its services. More specifically, Bangladesh has foreign exchange regulations, currency exchange regulations, and customs policies that do not support business models that provide their services directly, and it definitely doesn’t have provisions that cover online platforms.

A proper example of this directly affecting collaborations would be the interaction between ministry officials and managers from Amazon looking to expand business to Bangladesh and source local products for overseas selling. For Amazon to act according to its internal business policy, it requires a special permit from the government of the country, which it is trying to access, due to the sheer amount of goods it will import and export and the number of local sources it will take from.

However, up until now, Bangladesh has been exporting and importing resources and goods by imparting permissions to personal parties with local origins, like Bangladeshi companies or businesses and such, without there being an actual provision that officialises and legalises the process. Rather, these permitted parties import and export goods and such following the usual regulations, and pay the set taxes and tariffs.

However, Amazon as a company simply cannot do that because they would import and export every kind of goods, ranging from furniture to electronics, and paying for every instance of import and export would be tedious, archaic, and harmful for profit.

Another example of how a lack of provisions and regulations directed towards international companies is actively sabotaging the business market would be the very few number of international food chains.

For a food chain like, let’s say, Nando’s to enter Bangladesh, they would have to get business permits, health certificates, and restaurant permits. Those are the standard fare, so that’s acceptable. Then they would have to get a space where they can establish the restaurant, by either buying a plot of space or renting it. This requires different permits of its own, but let’s assume that has been bypassed by local agents purchasing or renting the required space. Then, after the restaurant is established and customers start arriving, they would have to contend with local restaurants.

Now, keeping the currency value difference in mind, they would also have to consider getting enough sales to have sufficient amounts of profit that will, at the very least, keep the restaurant self-sufficient while aiming for actual profit for the main business as an end goal.

And as they’re doing all this, they would also have to pay the government the indiscriminate, non-specified tariff required for a large scale company to conduct business on foreign land. And then the global pandemic comes and now Nando’s is closing down due to lack of profit.

Aside from all these legislative disabilities, there are still more complications plaguing international companies in Bangladesh. And these complications arise from one simple fact: The government imposes negatively unique situational conditions on foreign businesses.

A prime example of this would be the case of Nike. Nike, as a company, outsourced production responsibilities to various factories in Bangladesh due to availability and cost effectiveness. As usual, there were massive import-export tariffs and factory taxes and such. But along with that, there was also a special prescription for Nike and other companies in similar trade deals. Officials from such companies could not interfere with how the factory was built or rebuilt.

Now, this might seem like a reasonable condition, considering they can still outfit the factory with any equipment or manpower they see fit. However, the catch here is that factories in Bangladesh have a more than shoddy track record. Example: Rana Plaza collapsing with thousands of people inside.

Now, all of these examples and instances all point to a simple fact: Bangladesh’s current foreign policy is simply not updated enough to keep up with the many many business opportunities available. And this deficiency is made worse by the stubborn reluctance shown by the government in having collaborations with international chains.

In this situation where massive companies have failed to defeat the bureaucratic nightmares and gain a threshold, Spotify has acquired a solid platform for its services, which is nothing short of a miracle for a company of its infrastructure. As Bangladeshi audiophiles are finally able to enjoy their favourite music the way they want, Spotify might even be the precursor to a policy overhaul that can give international businesses and Bangladesh the level business ground they need.

 


Fairuz Shams would rather solve non-existent crises in the middle of the night than get a good night’s sleep.

 

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