The profound journey of Bangladesh’s retail sector and its pivotal role in driving economic growth.
Retail is an age-old practice, tracing back to ancient civilisations where the invention of money facilitated commerce. Since those early days, the act of retailing has existed in various forms and scales. From street vendors carrying goods to their customers to small vendors in bustling bazaars and markets, to modern-day superstores, and even virtually on e-commerce platforms and social media sites, retail has continuously evolved.
Observing the retail landscape in Bangladesh is like witnessing the coexistence of all these historical instances simultaneously. Street vendors, hawkers, corner stores, department stores, super shops, outlets, showrooms, e-commerce, m-commerce, and f-commerce – all these forms of retail thrive in Bangladesh. What is fascinating is how these businesses, from micro retailers to large corporations, have continued to prosper alongside the growth of the economy, painting a comprehensive picture of Bangladesh’s economic advancement and the rise in its people’s purchasing power.
The growth of retail in Bangladesh has empowered consumers by offering an extensive range of products at various price points, ensuring accessibility to everything from daily necessities to luxury amenities. This sector has not only supported the flow of money within the economy but has also encouraged the import of goods, accelerating the integration of technology in business processes. Moreover, retail has been a significant source of employment for millions of people, contributing to the overall economic dynamism of the country.
RETAIL EVOLUTION
Mom-and-pop or corner store micro-retailers, more commonly known as mudi dokan, are the earliest forms of brick-and-mortar retail stores in Bangladesh. These small shops have existed since before the country’s independence and saw rapid growth as Bangladesh’s economy steadily expanded. In the late 1990s and early 2000s, department stores began to rise in popularity, offering consumers a wider selection of products.
Shopping centres, which serve as hubs for multiple retail stores, have also been a long-standing feature of Bangladesh’s retail landscape and have experienced similar growth. For instance, Dhaka’s New Market was established in 1954 to cater to residents of Ramna, Azimpur, and Dhanmondi. Similarly, the Gulistan market became a commercial hub for hawkers and retailers in the early 1960s, and Karwan Bazaar flourished throughout the 1980s and 1990s.
The introduction of large retailers marked a significant shift in the retail sector. Superstores first appeared in 2001 with the inauguration of Agora Super Store, followed by Meena Bazaar, Shwapno, and Unimart over the next decade. This period also saw the emergence of multi-storied shopping complexes, which became essential for sustaining seasonal commerce. Eastern Plaza, the first modern multi-storied fully air-conditioned shopping complex, opened in 1990. Fourteen years later, in 2004, Bashundhara City—then the largest mall in South Asia—transformed the retail landscape by fostering socio-economic activities under one roof. This transformation continued in 2013 with the opening of Jamuna Future Park, now the largest shopping complex in Bangladesh, housing the highest number of retail outlets for various Bangladeshi brands.
Around the same time, the rise of e-commerce, m-commerce, and f-commerce was facilitated by the nation’s expanding mobile and internet connectivity. This technological advancement brought retail to virtual platforms, empowering both businesses and consumers with unmatched utility and convenience.
RETAIL BY INDUSTRY
While shops selling Fast-Moving Consumer Goods (FMCG) have always been the most common type of retail business in Bangladesh, companies across various industries have established their own retail outlets to build brand identity and engage with consumers directly.
In 1978, Aarong opened its first outlet in Dhaka, marking a crucial milestone for Bangladesh’s clothing industry. Today, there are at least 40 clothing brands with their own outlets, a number that is expected to grow as the ready-made garment (RMG) industry continues to be the fastest-growing manufacturing sector in Bangladesh. Aarong not only paved the way for local RMG manufacturers to expand their customer base through retail outlets but also demonstrated the potential for other industries to utilise real estate to serve dedicated consumer bases.
For example, in the furniture industry, companies like Hatil, Navana, Regal, Akhtar, Brothers, and Hi-Tech have established showrooms where customers can experience the quality and design of their products firsthand. Similarly, in the footwear industry, Apex has retail outlets in all 64 districts, while Bata strategically locates its stores across the country, each boasting more than 260 outlets nationwide.
Some industries utilize business associates and flagship stores to showcase and sell their products. The ceramic industry is well-known for this approach, with Akij Ceramics having multiple business associates across Bangladesh and a flagship store in the capital, offering consumers a full brand experience.
Electronic retail is among the fastest-growing sectors in the nation. Stores like Star Tech and Ryans are popular destinations for consumers seeking laptops, computers, and accessories. Smartphones and gadgets are available in nearly every shopping mall, while home appliances are widely accessible in commercial areas through dedicated showrooms or messieurs (M/S).
RETAIL AND THE ECONOMY
The thriving retail sector in Bangladesh is a testament to the country’s robust economic growth. According to the latest Wholesale and Retail Trade Surveys conducted by the Bangladesh Bureau of Statistics for the years 2002-03, 2009-10, and 2019-20, the number of wholesale and retail establishments grew by 61% between 2002 and 2020. During the same period, the gross value added by the retail sector increased twenty-fourfold, and the annual GDP growth rate surged from 3.8% in 2002 to 7.1% in 2020.
Employment in the retail sector is substantial, supporting over 6 million jobs in Bangladesh. These jobs span various functions such as sourcing, manufacturing, packaging, logistics, distribution, branding, marketing, advertising, operations, management, and accounting. Additionally, the rise of online retail businesses, which often promise door-to-door delivery, has fueled the growth of the online delivery service industry, further linking the expansion of retail to broader economic benefits.
The growth of retail in Bangladesh has empowered consumers by offering an extensive range of products at various price points, ensuring accessibility to everything from daily necessities to luxury amenities.
The integration of digital checkout systems in retail stores has revolutionised the shopping experience, welcoming significant investments in technology, particularly in information management systems. These advancements have enabled businesses to maintain extensive databases of products sold and consumer demographics, facilitating data-driven decision-making. As a result, companies have been able to achieve record-breaking sales.
Moreover, the retail sector plays a crucial role in consumer empowerment. By offering products at various price points, retail stores ensure that consumers across all socio-economic levels can access goods that provide the best value for their money. This kind of healthy consumerism ensures a steady flow of money through the economy, directly contributing to its support and growth.
THE FUTURE OF RETAIL
The retail sector in Bangladesh is poised for continued growth in the coming years, driven by rising demand and a robust economy. Several foreign brands have already established outlets in the country, recognizing the strength of Bangladesh’s retail market and the increasing consumer appetite for diverse products. This influx of international brands is expected to persist, further fueling the sector’s expansion.
As the market evolves, advertising within the retail sector is also set for significant innovation. Augmented Reality (AR) and Virtual Reality (VR) campaigns, currently seen as novel, have the potential to become mainstream methods for engaging consumers. Additionally, the accessibility of Artificial Intelligence (AI) tools has allowed marketers and brand practitioners to execute campaigns with unprecedented speed and efficiency, revolutionising the way products are marketed and sold.
Employment trends in the retail sector are anticipated to shift, with a growing demand for data analysts due to the massive volumes of data accumulated by superstores over the past decade. This trend suggests increased collaboration between market research firms and retail outlets, as well as a potential surge in in-house data analyst positions. Consequently, this is likely to boost employment in Bangladesh’s Information and Communication Technology (ICT) sector, creating new opportunities for skilled professionals.
However, concerns about inflation driven by global factors remain, as rising prices of goods and commodities could limit consumer spending. Despite these challenges, the burgeoning middle-income population and strong consumerism in Bangladesh indicate that the retail sector will continue to play a vital role in the nation’s economic development.
