The COVID-19 pandemic presented challenges and opportunities to retailing in 2020 and 2021. Consumer spending was focused on the daily essentials, while consumers increasingly favoured e-commerce and modern retailing.
The impact of the COVID-19 pandemic led to the emergence of new behaviours among both retailers and consumers in Bangladesh. Was largely positive in terms of sales, with impressive growth rate recorded across the retailing industry during both 2020 and 2021.
The vast majority of Bangladeshi consumers, a proportion estimated as high as 95% by some sources, remain heavily dependent on traditional retailers for their daily essentials. However, many consumers favoured modern grocery retailers and/or e-commerce during the quarantine lockdowns that were instigated in response to the COVID-19 pandemic during 2020 and 2021.
The COVID-19 pandemic interrupted commercial activity in key sectors of Bangladesh’s economy during 2020 and, to a lesser extent, 2021. This put pressure on consumer spending to some extent, resulting in spending increasing at a slower rate than what was seen earlier in the review period.
There were no major disruptions seen to the supply and delivery of grocery and non-grocery merchandise seen in Bangladesh’s retailing industry as a result of the COVID-19 pandemic during 2020 and 2021. Manufacturers and distributors acted quickly at the first sign of potential disruption due to rapid developments during the early stages of the pandemic, with sales and delivery plans enacted to avoid supply bottlenecks and stock shortages.
Informal retailing remains ubiquitous in Bangladesh and it has been estimated that some 50% of grocery retailers in major cities are unregistered, a figure that rises to around 80% in smaller cities and rural areas. Throughout the country, the popular image of retailing is intrinsically tied to individual entrepreneurs and family businesses and this contributes to the widespread participation in, and acceptance of, informal retailing.
With the retailing industry set to enter a new phase of development during the post-COVID-19 era, it is inevitable that informal retailing and traditional retailing will remain dominant. However, modern retailing is slowly gaining a higher profile, especially in urban areas, where many affluent professionals are leading increasingly busy lifestyles that lend themselves to shopping in modern retail outlets.
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Retailing
Sales of new and used goods to the general public for personal or household consumption. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts, fuel. Also excludes foodservice, rental and hire and wholesale industries (Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retailing is the aggregation of Store-based retailing and Non-store retailing. Retailing excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, ie retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer which is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retailing. In relation to click and collect purchases (i.e. where purchases are made over the internet but picked up at store) where the sales data is attributed depends on where the payment is made: If payment is made in store, then the sale is included in store-based sales. If payment is made over the internet, then the sale is included in internet retailing.
See All of Our DefinitionsThis report originates from Passport, our Retailing research and analysis database.
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