Ek-Shop to rule them all?

Prepared for:
Mr. Md. Ridhwanul Haq, PhD
Professor
Services Marketing

Prepared by:
Md. Maruf Hasan MBA 59D Roll 22
Sarah Ahmed MBA 58D Roll 26
Shafqat Aurin MBA 59E Roll 46

Institute of Business Administration

University of Dhaka

Date of Submission: 30 April 2019

 Ek-Shop to rule them all? : A Services Marketing Case

Ek-Shop to rule them all?

A Case on Ek-Shop by Shafqat Aurin, Sarah Ahmed, Maruf Hassan

It was a warm day in April and the core team of 10 individuals responsible for managing ek-Shop
were sitting around a round table in the a2i offices, debating.

“Service at Doorsteps. That’s our motto,” said one executive, looking to the others for agreement.
“We’re already bringing e-commerce to the grasp of the citizens by allowing them to shop for their
desired items through our platform!”

“Yes, but is that enough?” rebutted another executive. “Our name literally is ‘access to
information’. We need to open up our platform to all the citizens, allowing for anyone to order
from the comfort of their homes anytime!”

“Yes, but then our entrepreneurs would lose a chunk of their income,” interjected someone else.
“This would affect our entire business model. Are we ready for that change?”

Tension was flying high, but a resolution had to be reached. Would Ek-Shop stick to it’s current
business model of citizens ordering products and availing them via the Union Digital Centres
(UDCs)? Or should the platform be open for general public use from anywhere, anytime?

A brief overview of a2i

Ek-shop is an initiative housed under a2i. Access to information in Bangladesh, or a2i in short, is
a project supported by UNDP and the Prime Minister’s Office in Bangladesh, and ran under the
Ministry of Information of Bangladesh.

a2i was started in 2007, with the objectives of increasing transparency, improving
governance and public services and reducing inefficiencies in their delivery. It works as
an innovation intermediary through a whole-of-government approach – focusing
primarily on bringing information and services to citizens’ doorsteps and increasingly
within the palms of their hands. It does so by harnessing modern ICTs, local knowledge
and global best practices to establish both physical and virtual one -stop access points.

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 Ek-Shop to rule them all? : A Services Marketing Case

a2i has achieved major milestones in promoting government service decentralization

throughout Bangladesh, especially in the category of rural e-commerce popularization. Ek-
Shop is one of such initiatives.

What is ek-Shop?

Ekshop is an assisted rural e-commerce platform established under a2i. It brings together several
individual and established e-commerce entities of Bangladesh under one platform, from where
citizens can buy desired products.

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 Ek-Shop to rule them all? : A Services Marketing Case

The target customer segment of ek-Shop is the general population of Bangladesh, but especially
the citizens living in the rural and most remote locations of the country, as the residents living in
these regions have lower exposure to technological solutions.

To test the viability of the platform, ek-Shop was initially piloted in 50 UDCs in 2017, after which
it was officially launched in February, 2018. Ek-Shop has already reached over 3500 UDCs around
Bangladesh! Although ek-Shop is within reach of more than half of the population of Bangladesh,
currently the platform is only accessible with the help of the entrepreneurs in the digital centers,
and not anywhere else.

Currently, there is no system in place to track individual customers or individual purchase

preferences, as only the UDC entrepreneurs can access the platform. However, it is seen that order
volume wise, the most popular items purchased are clothing and electronic devices.

Of the people, for the people

But how do citizens actually avail ek-Shop?

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 Ek-Shop to rule them all? : A Services Marketing Case

Citizens travel to their nearest UDC, and enlist the entrepreneurs based there to browse the
platform and buy different items like clothing, medicines, gadgets, mobile phones, televisions,
jewelry, etc.

As the entrepreneurs search the product of the customer’s choice, results from top e-commerce
platforms in the country containing more than half a million products will appear in front of them.
To give the people the best shopping experience, ek-Shop has introduced an innovative
technology, NLP. The smart bot understands the constraints of their demand and budget, and helps
them find the exact product they are looking for.

Once decided, the citizen needs to provide their name and address and select a delivery option,
after which their order will be placed in the particular e-commerce site from where they are
purchasing. The product is then shipped by the logistical partners to the UDC. All these processes
can be tracked online and through SMS or call center.

Once the product arrives in the UDC, the citizen will get a phone notification. They can either pick
up their product from the UDC at their convenient time or the entrepreneur will deliver it at their
home at the end of the day.

Ek-Shop does not currently have their own warehouses. The logistical system relies on a network
of warehouses maintained by the e-commerce Partners (EPs). But a2i plans to test out the benefits
of managing district level warehouses in the upcoming months.

Ek-Shop has 10 e-commerce partners (EPs) and 7 logistic partners (LPs) at the moment who
provide different products for sale on the platform, and in just a little over a year, ek-Shop has
already generated revenues worth BDT 10.3 Million from its operations.

Lately, ek-Shop has started offering rural product selling too. Now, someone based in rural
Bangladesh can easily sell their products through ek-Shop. If someone wants to sell any of their
agricultural products or handicrafts, they’ll need to bring a sample of it to their nearby digital
center.

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 Ek-Shop to rule them all? : A Services Marketing Case

At the digital center, the entrepreneur checks the quality of the product, creates a profile of the
seller/entrepreneur, and uploads picture of the product to the ek-Shop platform for selling. Then,
the product can be available on the platform throughout the country.

Fig: Registration panel for ek-Shop reference??

Distribution reach

Bangladesh is certainly adopting to e-commerce rapidly with increasing internet penetration,

mobile first consumer behavior, advent of social commerce and improving digital payments
infrastructure. In 2016, the e-commerce industry recorded a 67% growth in the first three quarters,
and the country's e-commerce transaction reached 3.59 billion takas (50 million U.S. dollars)
(Xinhua, 2016).

As Bangladesh becomes digital, there is a next wave of internet users that are coming online; these
are the users in semi-urban and rural areas, whose aspirations are as large as urban users. In 2016,
the internet penetration rate was 13.2%, and the number of internet users was 21.39 million
(internetlivestats, 2016). In 2017, the number increased triplefold, the internet users raised to 80.43
million and the penetration rate was 48.4% (Internet w. s., 2018). Latest statistics show that the
number further increased to 87.79 million users and the penetration rate is 52.77% in June, 2018
(BTRC, www.btrc.gov.bd, 2018).

The statistics looks very promising and encouraging to the e-commerce traders and investors,
especially when you take into account that the semi-urban and rural customers were still

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 Ek-Shop to rule them all? : A Services Marketing Case

considered out of reach by most e-commerce platforms until recently. The challenges which were
hampering the e–commerce presence in rural Bangladesh are slowly vanishing. The ever–
decreasing prices of smartphones and internet accessibility, rising internet speed, push from
government and private players for digital literacy underline the hypothesis that e-commerce
industry will no longer be a foreign concept in rural Bangladesh in the next to three to four years.

As part of the digitalization process, all the upazillas in Bangladesh have at least one UDC, 5292
in total. However not all of them are currently connected through the logistic partners and hence
they cannot provide ek-Shop’s services.

Registered UDCs 3451

Connected UDCs 3389

Transacting UDCs 1460

Non-transacting UDCs 1931

UDCs out of reach 68

In text reference

Yet, the journey to rural market doesn’t come without challenges. Heterogeneity of the
requirements of a rural consumer, lack of trust of online transactions, cheaper products offline and
absence of platforms in local languages, digital illiteracy and a market that is highly-dependent on
touch-and-feel are still pretty big roadblocks in reaching and gaining the trust of a rural consumer.

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 Ek-Shop to rule them all? : A Services Marketing Case

In order to reach the rural customers, two main issues need to be addressed: spreading awareness
about online shopping and providing them an access to these online shopping platforms where
they can carry out online transactions.

The bulk of ek-Shop’s promotional activity takes place during the divisional conferences where
the ek-Shop team has to convince the various influencers in the local communities to use and then
recommend the service to others.

When local influencers guide them to buy things online, the rural people get convinced to try out
the service. Ek-Shop also places banners and signs in front of each UDC to raise interest in the
service.

Access and transport infrastructure is another challenge and hence supply chain efficiencies,
sourcing and logistic partner selections are significant strategic levers. Currently, most of the
logistic partners excepting for the Bangladesh postal service are concentrating their services in
urban and semi urban areas. It's hard to find logistic partners that can promise to deliver at the
remote locations. Although some e-commerce partners have agreed to provide their own logistical
support to these regions, but there are still a lot of UDCs that are not yet connected through the
logistical partners. This creates lags during the delivery phase of the sales. To mitigate this, a2i
plans to test out having divisional warehouses for faster deliveries.

Sustainable strategy and strategic alliances – partnerships, past and future, growth goals

Ek-Shop does not have a traditional revenue model. It is a funded project ran by a2i.

It only creates the platform for e-commerce partners and citizens to connect to each other, not
receiving any registration/signup fees from either end.

The core ek-Shop team at a2i has 10 members. They oversee the strategic alliances and growth,
focusing on service innovations and logistical partnerships. The entrepreneurs at the UDCs can be
considered an integral part of the project, but they are not employed by the a2i or the central
government of Bangladesh. They do not draw any salaries, rather they receive commissions from
the e-commerce partners on each sale they make.

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 Ek-Shop to rule them all? : A Services Marketing Case

For the project, sustainability is not as important a factor as is increasing presence across UDCs.

The ek-Shop team is already working on making the platform accessible to the general public.
Agreements with Daraz and Evaly are underway. At this moment, only Cash on Delivery is
available but they are working on a project to add an e-wallet feature to the platform.

As more and more people of Bangladesh are getting access to Internet and Facebook and online
stores, it might seem that ek-Shop will soon become obsolete. But in reality, it is the first assisted
e-commerce platform in the country and it is backed by the Government of Bangladesh. So, ek-
Shop likely has an edge over other direct e-commerce sites or future private platforms in terms of
reliability and assurance.

Can assisted e-commerce go open?

E-commerce promised convenience, selection and price of e-commerce but it could only reach the
tier I towns- the metropolitan cities in Bangladesh. There were various factors that contributed but
the adoption in tier II and tier III towns or villages remains low or negligible.

Here is where the “assisted” e-commerce model helped. It took out many of the challenges faced
by the ordinary citizens and gave them access to a whole new marketplace. Even though the
concept is new in Bangladesh, it’s been enjoying a tide of popularity in our neighbouring country
for almost a decade now.

India has a number of assisted ecommerce platforms and it’s been using those to reach the yet
untapped market of rural customers. Individuals from remote villages are ordering consumer
durables and devices that could not be found anywhere near them, though these “assisted”
platforms. Some shining examples from India are:

· Connect India Mainly a provider of last mile delivery services , it also does assisted commerce
through its Connect India centers (CIC) – retail stores, pharmacy shops and mobile shops. Each
CIC has two or more delivery staff who deliver to citizens through bicycles. Connect India also
has introduced rural enterprise commerce concept wherein the reverse logistics network is used to
deliver the produce/products of rural entrepreneurs to the towns/cities.

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 Ek-Shop to rule them all? : A Services Marketing Case

· Inthree It provides an assisted commerce to the rural population. Associates from India Post,
NGOs and self–help groups and sales people act as agents, who sell through a platform named
Boonbox installed in phones/tabs and get a commission for the sales.

· IPay India It provides assisted commerce experience to customers by tying up with intermediate
retailers who offer these services to consumers; the retailers pay a one-time fee and get a
commission for the orders placed through them. These retailers also act as cash collection points
for IPay. Customers can place an order on the tablet or with the help of the IPay call center. The
goods are later delivered at the grocery store or to the customer directly. Orders placed on the
platform are prepaid and take five-seven days to be delivered to the customer. The platform serves
more than 20 categories which include goods such as mobile accessories, apparel, footwear and
fashion accessories as well.

Clearly, a huge difference exists between the Indian assisted e-commerce scene and ek-Shop.

The formers are for-profit businesses owned privately while the latter is a non-profit public-sector
service. Recently, ek-Shop has been thinking of opening up its platforms to the general public
instead of keeping it to the entrepreneurs only. Obviously, there are certain advantages such as
higher volume of sales, along with accessibility. People who are able to use their smart devices
and access the internet, can buy from the comforts of their home, without even needing to visit the
UDCs. These higher sales volumes can be significantly beneficial to the producers of the products,
especially if they sell through ek-Shop, as they may be able to grow, expand their operations, and
hire more people.

Currently, ek-Shop attributed all the orders to specific entrepreneurs’ accounts. They do not track
individual customer data. When customers will make purchases online through the platform, their
order histories, search histories can be tracked, among other things. This order history can then be
used by the retailer to market more products, e.g. the customer's home page can show
advertisements for products that are similar to products purchased. This is just one way in which
online shopping data can be used to personalize the marketing efforts towards consumers.

One other type of data that can be used for this purpose are search results, such as from Google. If
the same device (such as a mobile phone) is used to search queries online, as well as make online

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 Ek-Shop to rule them all? : A Services Marketing Case

purchases, online retailers can suggest items to consumers based on their search histories. This is
a benefit of self-driven e-commerce which would not be available through the assisted e-commerce
platform

What does the future hold?

Eventually ek-Shop wants to emerge as a market place that integrate all the large e-commerce
businesses for every citizen in the country. But a major obstacle in its’s way is how the existing
models is so heavily dependent on the entrepreneur. The entrepreneur assists everyone to search
for their desired product, make the purchase and arrange for its delivery and payment.

However, when the website or platform starts to allow public access and as internet becomes more
and more accessible to all citizens, and as the population becomes more and more tech-savvy,
there may come a time when assisted e-commerce is not necessary or highly impactful. What
would happen to the entrepreneurs who used to earn their livelihood from commissions earned
through transacting, and UDCs which enjoy a status as a hub for internet services for rural people?

There are no precedents for any solution to these problems as none of the assisted e-commerce has
ever allowed the general public to directly access its services and take the assistance out of the
equation.

Change is inevitable, but change can take many forms. What path will ek-Shop follow, depends
on a careful perusal of all the factors that has lead up to its successes so far.

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