Rise of the Digital Consumer Class in Bangladesh
A young, consistently developing and increasingly digital economy - the country with world’s 8th largest population and an astounding 6% GDP growth rate also has a relatively young and quite the tech-savvy consumer base. Yes, this is how Bangladesh is rewriting its’ growth story as the country sprints through a digital era.
As an emerging economy, Bangladesh has embraced technology at a fascinating speed. After 3G services got launched in 2013, internet penetration in Bangladesh grew by 22% by the end of 2014. 2015 is not over yet the country has already added 10.5 Million additional internet subscribers (BTRC report, September 2015) with an average 3% growth rate per month.
Of the 54 million active internet subscribers (BTRC September 2015), nearly 96% are on mobile and 10 million use smartphones. With growing internet connectivity, proliferation of cheaper varieties of smartphones, rapid rise in social networking (10 million + Facebook users) and e-commerce firms in Bangladesh, the consumers are getting more and more digitally attuned which eventually ends up having a profound impact on their consumption pattern.
At present, 57% of the total population is aged between 15-54 years and this changes everything – including spending and saving behavior, technology adaptability and lifestyles including apparels, eating, travelling habits and e-commerce activities.
The catalysts behind this digital leapfrogging are threefold: • Fast-paced telecom penetration covering more than 80% of population and providing nearly 100% basic network coverage. • “Digital Bangladesh” – a vision being driven into action by the current Bangladesh govt. • Increasing per capita income coupled with a demographic youth bulge which is more likely to adopt a technology at its early stage and has the financial backing to do so.
Although internet penetration still stands at 34% of total population, in terms of growth Bangladesh stands second only to Nigeria in the world:
As this growing internet-enabled population is becoming more digitally attuned every day, this means businesses catering to their several needs also require a parallel transformation. Increasing investment in 3G network by telecom operators, positive economic outlook, prospect of 4G and LTE era enabling faster internet and proliferation of low-cost smartphones indicate a much bigger “online” population by 2021 than the 90% population coverage govt. is projecting currently.
To help businesses have a better understanding of this surging population base, LightCastle Partners conducted an online study with over 450 respondents in Dhaka, Chittagong and Sylhet- three developed markets in the country. Coming from emerging middle and the middle and affluent class (Monthly income within USD 251-650 range) households, around 64.4% of these respondents are aged 20-40 with 35% representation from 20-30 year age group.
And though 35.6% of these online respondents are from the 40-70 age groups, 67% of the base “always takes part in the family decision making process”. Majority of these participants are living in Dhaka while 17.3% are from Chittagong and roughly 5% of the base are from Sylhet. Their consumption pattern for around 10 categories, their media preferences as well as their aspirations were taken into consideration to understand the decision making process and identify opportunities for businesses to create an impact on this changing market scenario.