University of Dhaka
Faculty of Business Studies
Department of Marketing
Thesis report on
“The impact of the click only retailers on the brick and mortar
retail industry of Dhaka city”
Supervised by:
Prepared by:
Farhana Rahman
ID: 048, Batch: 21
Dr. Mubina Khondkar
st
Professor
Department of Marketing
Department of Marketing
Faculty of business studies
Faculty of business studies
University of Dhaka
University of Dhaka
Date of Submission:
1
Letter of Transmittal
……………………….
Dr. Mubina Khondkar
Professor
Department of Marketing
University of Dhaka
Subject: Submission of Thesis Paper
Dear Ma’am
It is a great pleasure for me to submit my thesis paper on “The impact of the click only retailers on the brick
and mortar retail industry of Dhaka city” that has been assigned to me as the fulfillment of the course of
Bachelor of Business administration.
While preparing this paper, I had to go through numerous hurdles such as the unwillingness of the online
retailers to cooperate, the inability of the households to understand the objectives of my report; but this
limitation has improved not only my concept about the retail industry of Dhaka city but also contributes to
my communication skill, academic skill, and the problem-solving skill too. The program has also
contributed with the opportunity to understand the growth of the online retail stores in Dhaka city and their
influence on the market share of the brick and mortar retailers. I have tried to invest my utmost effort to
ensure the credibility and meaningfulness of this report.
I have tried sincerely to comprehend and translate my knowledge to write this report will be rewarded on,
it adds value to the research literature. I enjoyed this project gladly attend any of your calls to attend to
clarify my points if it is required.
Sincerely
Farhana Rahman
ID: 048
Department of Marketing
Faculty of Business studies
University of Dhaka
2
Supervisor’s Certificates
This is to clarify that the thesis paper on “The impact of the click only retailers on the brick and mortar
retail industry of Dhaka City” in the bonafide record at the report is done by Farhana Rahman, ID no. 048,
as a partial fulfillment requirement of Bachelor of Business Administration degree from the Department of
Marketing, University of Dhaka.
The report has been prepared under my guidance and supervision; I have approved the draft before
submitting the final copy. I wish her every success in life.
………………………………
Dr. Mubina Khondkar
Professor
Department of Marketing
Faculty of Business Studies
University of Dhaka
3
Student’s Declaration
I do hereby solemnly declare that the work presented in this thesis paper has been carried out by mean has
not been previously submitted to any other University/College/Organization for an academic
qualification/certificate/diploma or degree. The interpretations put forth are based on my reading and
understanding of the original texts and they are not published anywhere in the form of books,
monographs or articles. The other books, articles, and websites, which I have made use of are
acknowledged at the respective place in the text.
The work I have presented does not breach any existing copyright and no portion of this report is copied
from any work done earlier for a degree or otherwise. I further undertake to indemnify the Department
against any loss or damage arising from breach of the foregoing obligations.
……………………………..
Farhana Rahman
ID: 048
Section: A
Session: 2014-2015
Department of Marketing
Faculty of Business Studies
University of Dhaka
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Acknowledgment
At the very beginning, I would like to express my deepest gratitude to the almighty ALLAH for giving me
the strength and the composure to finish the task within the scheduled time. I would like to pay my gratitude
to our course instructor Dr. Mubina Khondkar, Professor, Department of Marketing, University of Dhaka,
who has assigned me this task and instructed in the right way and given me proper guidelines for preparing
this report.
In particular, I would like to express my sincere gratitude to all of the course teachers in our BBA program.
I have learned many things from their lectures which also helped me to accomplish this thesis paper.
In addition to that, I would like to thank all respondents who participated in this research and helped me to
collect the primary data. I am grateful to my beloved Parents, friends, and well-wishers for their inspiration
that leads me to go ahead. Finally, I thank all the persons who have directly or indirectly contributed in
preparing this report. This Report is not free from limitation. There might still be some minor mistakes
including typing errors despite utmost care, we apologize for these.
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Abstract
With the technological development and the access of internet at a cheaper rate, the click only business is
enjoying a pace in their growth rate and expanding its scope of service in different sector of the retail
industry of Bangladesh that is now comprising .7% of the total market with 70% growth rate (in 2017) and
the market size is of BDT 900 crore. It is going to overtake the appeal of the offline retail stores and that is
going to be assessed in the discussion followed. However, to understand the current scenario of the click
only retailers, their acceptance to the consumers, and the concern of the giant retailers or the supermarket
chains of the city has been considered. the existing literature has reviewed the concern of the supermarkets
and the consumers about the growth of e-commerce for their grocery retailing especially as it I the most
challenging retail sector because of highly perishable nature of the products and the restriction over the
nutritious value. However, to understand the above factors, I have gone for the direct survey and conduct
an interview on four supermarkets to know their perception of this phenomenon. As the study is based on
Dhaka city, the households of this area have been selected as respondents and the supermarket chains are
the only controllable retail stores that follow structured retail management strategy, therefore, the study has
included them to assess the influence of the growth of e-commerce in this sector. However, collected data
has been analyzed using statistical tools and Microsoft Excel to test the hypotheses. Even if the growth of
the click only business has taken off in a satisfactory rate, it cannot leave a significant footmark on this
industry because of its limitation of introducing private label brands,the inability of bulk buying, improper
facilities to offer highly perishable goods, and the poor quality assurance policy. On the contrary, all the
retailers have uttered boldly that e-commerce is not going to cause anxiety to them as they are now heading
toward Omni-channel marketing strategy. On the contrary, the customers still prefer the brick and mortar
shops as they prefer the touch and feel the effect in case of their grocery item. However, at the end of the
report, some implications have been found out to avoid the risks of the offline stores emerged from the click
only stores and for the click only businesses to overcome the obstacles they are facing to grow.
Keywords: click-only retailers, brick and mortar retailers, retail management, grocery items, supermarket
chains, access to internet, customer preference, Onmi-channel, price penetration, quality assurance.
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Table of Contents
1.
Introduction:........................................................................................................................................ 10
1.1 Research background: ....................................................................................................................... 10
1.2 Problem statement:............................................................................................................................ 11
1.3 Research origin: ................................................................................................................................ 11
1.4
Objectives of the study................................................................................................................ 12
1.5 Thesis structure: ................................................................................................................................ 12
1.6 Description of the method followed.................................................................................................. 13
1.7 Scope of the research: ....................................................................................................................... 13
1.7 Research limitation ........................................................................................................................... 13
2.
Literature review ................................................................................................................................. 15
2.1 Competitive advantages and drawbacks of click-only retailers: ....................................................... 15
2.1.1 Competitive advantages of click only retailers: ......................................................................... 15
2.1.2 Drawbacks of online retailers: ................................................................................................... 17
2.2 Strength of the Big box retailers to overcome the threats posed by the click only retailers ............. 18
2.2.1 Bulk purchasing capacity ........................................................................................................... 19
2.2.2 Quality assurance ....................................................................................................................... 19
2.2.3 Chances of changing to click and mortar retailing..................................................................... 19
2.2.4 High brand equity of the private labels ...................................................................................... 19
2.2.5 Cost efficiency and the experience curve................................................................................... 20
2.2.6 Personal selling at the stores ...................................................................................................... 20
2.2.7 Service at the store and physical evidence of the store .............................................................. 20
2.3 Consideration of the customers while purchasing groceries from the retailers ................................ 20
2.3.1 Reasonable pricing ..................................................................................................................... 20
2.3.2 Product quality and feature ........................................................................................................ 20
2.3.3 Variety and assortment: ............................................................................................................. 21
2.3.4 Brand preference and private labels: .......................................................................................... 21
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2.3.5 Convenience of location............................................................................................................. 21
2.3.6 Lead time of order fulfillment .................................................................................................... 21
2.4 Gap identification.............................................................................................................................. 21
2.4.1 Conceptual framework ............................................................................................................... 22
3.
Methodology ....................................................................................................................................... 23
3.1 Research design: ............................................................................................................................... 23
3.2 Research method ............................................................................................................................... 23
3.3 Data collection method: .................................................................................................................... 24
3.3.1 Quantitative research and its data collection method ................................................................. 24
3.3.2 Qualitative research and its data collection method ................................................................... 25
3.4 Questionnaire design ......................................................................................................................... 25
3.5 Sampling method .............................................................................................................................. 26
3.5.1 Sampling frame .......................................................................................................................... 26
3.5.2 Sample size and sampling techniques ........................................................................................ 26
3.6 Data analysis and measurement scale ............................................................................................... 26
3.7 The research problems and hypothesis ............................................................................................. 26
4.
Discussion: .......................................................................................................................................... 28
4.1 Current E-commerce scenario of Bangladesh: .................................................................................. 28
4.2 Overview of the online retailers selected for the study ..................................................................... 29
4.2.1 Othoba ........................................................................................................................................ 29
4.2.2 Chaldal ....................................................................................................................................... 29
4.2.3 Meenaclick ................................................................................................................................. 30
4.2.4 Daraz .......................................................................................................................................... 30
4.2.5 Khaasfood .................................................................................................................................. 30
4.2.6 Shaksobji .................................................................................................................................... 31
4.2.7 Shwapno ..................................................................................................................................... 31
4.3 Overview of the supermarket chain .................................................................................................. 31
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4.3.1 Jamuna Hypermarket ................................................................................................................. 31
4.3.2 Shwapno ..................................................................................................................................... 32
4.3.3 Meenabazar ................................................................................................................................ 32
4.3.4 Aagora ........................................................................................................................................ 32
5.
Data analysis and interpretation .......................................................................................................... 34
5.1 Quantitative data analysis: ................................................................................................................ 34
5.1.1 Research question 1: Whether the customers are considering online retailers for their grocery
shopping .............................................................................................................................................. 34
5.1.1.1 Research result with cross tabulation and charts: preference of retail store on the basis of gender
to purchase groceries........................................................................................................................... 34
5.1.1.2 Research result with cross tabulation and charts: preference of retail store on the basis of the
income range to purchase groceries .................................................................................................... 37
5.1.1.3 Research result with cross tabulation and charts: preference of retail store on the basis of
purchase criteria .................................................................................................................................. 40
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1. Introduction:
With the surge of internet usage in Bangladesh, access to the customers using the online portals becomes
more convenient with the decreasing cost of the search. According to Btrc.gov.bd (2019), the internet
subscriber in Bangladesh has crossed 80 million subscribers in January 2018 and Daily Star has reported
that the amount has increased in 90.5 million in August 2018 with 18 lakh new subscribers in that respective
month (Report, 2019). E-commerce is emerging with the increasing use of internet and its coverage even
in the rural area of the country with the increasing per capita income ($1,751) and 7.83% GDP growth. Ecommerce market size in Bangladesh has reached to BDT17 billion 2017 that was only BDT4.0 billion in
2016 consisting .7% of the total retail market of the country. The number of direct and indirect job added
by e-commerce is approximately 50,000 per year. However, this significant success of the click only
retailers are threatening the market share of the traditional offline retailers. Therefore, the research followed
is going to be conducted focusing on the changes that are going to take place with the emergence of this
retailer and the possible defensive action of the offline retailers along with the reason of their current
indifference to the growth of e-commerce.
1.1 Research background:
E-commerce is booming around the world taking 10.2% of the global retail sales in 2017 with an
expectation of growing by 17.5% in 2021 and it is amounted $2.3 trillion yearly being recognized as the
fastest growing sector; China (1,003 million shoppers) is the highest shopper in this sector. In the UK, there
is 53 million users of e-commerce that is 259 million in the USA, in Brazil, there is 119 million and in
Germany, this number has crossed 64 million according to the statistics of statista, a commercial statistics
site. Amazon has earnt $232 bn in the year 2018 and expected to have 30% growth in 2019, though, in the
first quarter of this year, it has shown a prediction of getting only 10% to 20% growth that provides evidence
of their slow growth recently. However, Bangladesh is one of the faster-growing countries with the GDP
growth of 7.5% (expected) in 2019 with its per capita income of $1,751 (7.86% growth) in 2018 according
to daily star and the new finance minister A H M Mostafa Kamal has declared that it has grown by $1,900
in first quarter of 2019 with a record according to the news of BDnews24 that provides with a solvency of
the population and the increasing number of MAC (middle-income affluent consumers) people here. With
economic solvency and the access of the internet to the mass population, the click-only retailers have got a
lucrative platform in Dhaka city, especially that resulted in the establishment of 700 e-commerce site with
8,000 e-commerce pages after the declaration of Bangladesh Bank for online payment. However, this
immense growth is threatening the supermarkets of the country with their competitive edges like the option
to compare and choose the brand the consumers need, repeated discounts on the popular brands, home
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delivery service, the interactive communication system with the live chat facilities, and reducing the cost
of time spent in visiting the stores. On the contrary, the offline supermarkets especially have a large
assortment of product creating alliance with the brands that assure the highest possible quality of the
products, the private labels with continuous improvement of the market offerings with full service at the
store with the least lead time for the faster order fulfillment process, and the bulk purchase capacity that are
facilitating the retailers to avoid the threat emerged with the growth of the click only retailers. However,
Amazon wants to expand their market in this faster-developing country that can be a serious issue for the
supermarkets of the country as they have a large group of suppliers, efficient delivery process and the
products are mostly originated from the trusted sources that provide the evidence of their quality assurance
process. Therefore, the following research is going to evaluate the range of the effect of the entrance of this
giant retailer in the retail industry of Bangladesh and the overall impact of the existing online retailers on
the offline brick and mortar retailers.
1.2 Problem statement:
Problem statement shows the gap that is going to be fulfilled with the research conducted and for this
research paper the problem statement is “the impact of the click only retailers on the brick and mortar retail
industry of Dhaka city.” It is going to evaluate whether the click only retailers are going to overtake the
market appeal of the brick and mortar retailer and the examination regarding the preparation of the
traditional retailer to prevent the customer attrition because of the increasing acceptance of e-commerce in
Bangladesh keeping pace with its popularity worldwide.
Research question 1: Whether the click only business is overtaking the traditional retailers
Research question 2: Whether the brick and mortar retailers are concerned about the growth of ecommerce
Research question 3: Whether the customers are considering online retailers for their grocery shopping
1.3 Research origin:
As a mandatory part of BBA Program, all the students have to undergo an internship program of 2 or
3 months’ duration in any organization with a view to acquire practical knowledge or to conduct
research to apply the theoretical knowledge in the practical world improving the problem-solving skill.
Theoretical knowledge helps a student to understand the business implications partially and practical
knowledge helps a student to realize the real business world. Conducting research, I can apply my
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theoretical knowledge that I have acquired throughout my BBA program, on the identification of the
research gap, analysis of the findings making the report meaningful.
1.4 Objectives of the study
The acceptance of the online retail shops is increasing with the pace of the increasing number of internet
users in Dhaka City especially. In almost all spheres of the retail industry, it has knocked down from
clothing and apparels to daily necessary utensils. However, grocery shops are the newest addition to this
sector and it is also gaining popularity too. Therefore, it can be assumed that this retail industry is sure
going to consume a larger market share of the supermarkets soon. Therefore, the objectives of this study
will be

To understand the impact of the click only retailers on the traditional retail stores with he helps
of customer’s usage rate

To evaluate whether the online retailers are going to threaten the market share of the offline
retailers especially in case of the grocery retailing

To understand the impact of the multinational online retailer on both the online and offline
retailers

To assess whether the click and mortar can balance the trend of e-commerce as a competitive
edge for the physical stores

To recommend some implications for both the online retailers and the offline retailers to grow
and sustain with the market expansion strategy
1.5 Thesis structure:
The structure of this thesis paper consists of seven major parts and two additional parts that are going to
briefly introduce here in the following table.
Chapters
Description
Introduction
Introduce the research with a glimpse of the reason to select this topic to study and
to show the structure of the report is going to be
Literature review
It is going to show the findings of the previous research operated by different authors
to clarify my research topic creating an argumentative background
Methodology
How the research is going to be conducted will be elaborately discussed here
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Discussion
To understand the current condition of the retail industry with the new participation
of the online retail industry and the company overview of both the online retailers
and the offline supermarkets will be mentioned
Analysis
Here the collected data will be analysed
Findings
The findings will be assessed to this purpose
Implications and Here, according to the findings, some implications will be suggested for both the
conclusion
online and offline retailers and the overall conclusion will be drawn too.
1.6 Description of the method followed
To examine the information and data collected to understand the current conditions of the offline retailers
of the country and the customers’ response to the emergence online retailers’ offering, the mixed research
has been applied using both the quantitative research and the qualitative research. the quantitative research
will be on the preference of the customers in choosing the retailers to shop their groceries. On the other
hand, the qualitative research from the primary research conducted taking interview of four retail store
managers will show the opinion of the manager in response to the growth of the online retail trend. Lastly,
intensive secondary research will be performed to understand the click only retailers’ current performance
and possible growth here. Further explanation is going to be discussed in the methodology chapter.
1.7 Scope of the research:
The research will include the analysis of the growth of the online stores and the performance of the offline
stores that provides with the evidence of the threats and opportunities emerged with its growth and the new
trend in the retail industry. This study will cover all three areas related such as the customer’s preference
about the shops in case of purchasing groceries, the opinion of the offline retailers to the growth of ecommerce and their defensive strategies, and the current condition of the click only retailers. These all will
contribute to assessing whether the click only retailers of Dhaka city have the ability to overtake the appeal
of the traditional retail shop. This paper will include the assessment of the financial growth but not the
amount of the revenue generated will be compared as the e-commerce is still in an infant age in Bangladesh
and the traditional retail stores are already enjoying their maturity. However, this research will exclude the
assessment of the customers’ satisfaction in both the retail but it will play as a variable to prefer the shop.
1.7 Research limitation
The research paper has to face numerous difficulties while conducting that has limited the success of the
study and the limitations are going to be revealed before starting the discussion on the main study topic13
 Online retailers are not structured and under the control of any special law, therefore, their
financial report was unavailable
 The number of popular retail stores serving with the groceries are very few (only 9 stores) that
hinders the intensive analysis of the situation
 The offline retail industry is as large as it can hardly be compared with this infant industry of
online retailers
 The research is conducted on Dhaka City only, the picture of the other may not be represented
with this research
 The study has high diversity because of the income range of the respondents and the results may
have an error as some of the respondents are not informed about the facilities of shopping online
 The online retail stores are not cooperative to share their opinion that hinders the efficiency of
the report to analyze the environment with the primary research
 The research has tried to cover all the variation of the opinion using the respondents from a
different area but still, it cannot cover the whole Dhaka city, therefore, it shows a partial picture.
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2. Literature review
The study has focused on the growth of e-commerce and its impact on the market share of the tradition
retailers along with the preference of the consumers for grocery shopping. As the report is going to be
focused on these three perspectives, the related journal is going to be assessed with three sections. Firstly,
the considerations of the consumers for the grocery shopping will be highlighted. Secondly, the competitive
edges and the drawbacks of the click only retailers will be discussed from different existing literature. And
lastly, the reason for the indifference of the brick and mortar retailers along with highlighting their strength
to overcome the threats posed by the online retailers will focus. A conceptual framework will be prepared
that is going to show the flow of the study and analysis.
2.1 Competitive advantages and drawbacks of click-only retailers:
As discussed before, the online retailers are growing faster worldwide with the help of their unique facilities
and augmented products contributing to reach the target market and sustain the growth. On the contrary,
because of the lacking of the lawful establishment, they are facing some hassles to grow further. Here are
some of the advantages of the online retailers mentioned by different scholars have been pointed in the
discussion followed2.1.1 Competitive advantages of click only retailers:
2.1.1.1 Accessibility to the market with the different channel:
Ralitza (2006) has opined that the increasing access of the target market in the virtual world has facilitated
the industry to grow with a new platform of serving the target market. The cross-national border access has
added to the access of the target market even to the other corner of the world with the blessing of the
communication technology as per the report of Thomas et al., (2006). According to Schubert, et al. (2011),
Online business is growing faster because of its accessibility to the target offering the most possible
convenience to visit without being present physically with the help of information technology.
Krishnamurthy (2018) has agreed with his statement and she further added that it is not only changing the
retail sector with the Omni-channel opportunity but also improving the tourism retailing too. Hannu et al.
(2018) has supported the above statements and added that the growth of e-commerce is actually the blessing
of the technological development in the communication sector that is connecting the people all over the
world facilitating the e-commerce retailers to serve the market enjoying the demand across the border.
2.1.1.2 Reduction of the cost of operation
According to Anna (2002), the online retailers do not need any physical outlets that contribute to them to
minimize the cost of operation and only the cost of inventory and the logistics cost are higher in such
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industry. Supporting her, Ralitza (2006) has stated that the cost efficiency in managing the physical
evidence only in their online presence that hardly needed to redesign, just updating them periodically, the
organizations in this sector can focus further on the customer service and ensuring the quality of the
products. Thomas et al., (2006) has opposed that the cost of managing the home delivery service and the
intensive promotional strategy costs higher that often become more aggravated with the inability to
persuade the consumers with the personal traits of the salesperson. However, Krishnamurthy (2018) and
Hannu et al. (2018) have provided consent that the cost efficiency in managing customer relationship
decreasing the cost of operation is penetrating the marginal revenue from the sales of e-commerce.
2.1.1.3 Borderless market
Ralitza (2006) has stated that offline retailers are enjoying in some region borderless market with the
process of globalization and the free trade agreements among the countries but the online retailers are
enjoying the borderless market all over the world with the access of internet in every nook and corner of
the world attending the customers all 24 hours a day. Thomas et al., (2006) has added to this statement that
with the blessing of information technology click-only retailers are enjoying a competitive edge over the
traditional retailer accessing and influencing the target market with the electronic word of mouth marketing
strategy and interactive connection with the target market making them live with their brand visiting the
store any time. Erinco and Paul (2012) have opined that the seamless marketing strategy has been penetrated
with the borderless market as well as the influence of less legal constraint in borderless marketing
contributes with a further pace to this sector. Hannu et al. (2018) concluded that this advantage is causing
the main hindrance for offline retailers to grow and utilize their highest productivity.
2.1.1.4 Interactive communication and living with the brand
The online retailers maintain uninterrupted communication with their customer group with regular contact
with them even after the sales and create a long term relationship with them, this is one of the key success
factors of e-commerce, as said by Jesse (2008). According to Xia et al. (2008), the performance of the
online retailer in maintaining the customer relationship is better than that of the offline retailers as they
maintain 24/7 communication facilities and the community of the customers in the social media helps to
increase the customer equity. Erinco and Paul (2012) has also supported them and told that with the
increasing engagement of the target market in the social media, it has become easier for the online retailers
to access the prospects, generate electronic word of mouth, and maintaining a sustainable relationship with
the consumers that are letting them live with the retail brand.
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2.1.2 Drawbacks of online retailers:
Along with the competitive edges above discussed, the scholars have identified the following drawbacks
too that causes the hindrance of the growth and as per evidence, Amazon is losing their growth rate in
different countries.
2.1.2.1 high cost of logistics, inventory, and communication
The first and the most significant encumbrance of the online retailers to ensure the lower cost is its cost of
inventory and the logistics; when the company goes for weighing the outbound logistics cost or the product
delivery cost to the consumer, it discourages them to purchase online because of the summation of the
product cost and the delivery cost becomes higher to consider as per the opinion of Jonathon (2000), Jesse
(2008), and Xia et al. (2008). The cost of communication with the increasing focus on the sales promotion
and the integrated marketing communication program generate more cost for this retailer where the offline
retailers enjoy the personal selling capabilities of the sales persona and the elegance of physical evidence
as the stimuli to persuade the consumers to purchase or select the product as agreed by Erinco and Paul
(2012) and Hannu et al. (2018).
2.1.2.2 High lead time
In case of less perishable items and the general merchandise, the online stores are enjoying a pace but the
high lead time is causing dissatisfaction for the consumers as opined by Juliet et al. (2007). As stated by
Monica et al. (2018) that as there is no physical presence of the retailer and the customers and the sellers
are not present at the same time at the same place, the lead time of the order fulfillment is very high often
crosses 3 to 5days that hinders the expansion of the market to the perishable goods. Hannu et al. (2018)
have further added to his discussion that the customers required grocery items refill their inventory in a
smaller quantity and they need the products on time; the delayed delivery can cause dissatisfaction as he
cannot fulfill his need on time.
2.1.2.3 High error rate in order delivery
Juliet et al. (2007) have shown in their report that the error rate in delivering the products to the customers
is higher in case of online retailers; in most cases, the ordered product and the delivered product doesn’t
match; thus it costs the organization with a high level of dissatisfaction. To elaborate the consequence of
such occurrence Erinco and Paul (2012) has stated in their journal that there is an extremely negative word
of mouth about this mismatch in the social media about the service of the online retailer that is contributing
to the customer attrition after the trial. Monica et al. (2018) have opined that the error rate has increased the
cost of logistics further when the consumers send the product back to the seller and obviously deny to pay
even the delivery charge; this hassle created a discouragement among the prospects to avail the offering of
the online retailers.
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2.1.2.4 Fraudulent pricing
In case of pricing, most of the retailers follow fraudulent pricing by charging the higher price of the products
and then offering high sales promotion to attract the attention of the customers; but ultimately the price of
the product is higher than that of the offline retailer as mentioned by Erinco and Paul (2012) and Monica et
al. (2018). Krishnamurthy (2018) has added that the hidden charge and the concealed delivery charge is
also contributing the fraudulent pricing of the retailer, and this deception results in the customer attrition
and negative WOM marketing hindering the brand image of the organization. Monica et al. (2018) has
further added that in case of competitive pricing, this problem hinders the success of the sales promotion
even when the company performs its clearance sales strategy; moreover, to avoid the fraudulent pricing,
some of the customers wait for the discount declaration and they only buy products only when the
organization announces high sales promotion that causes grey marketing hindering the revenue stream
extremely.
2.1.2.5 Focusing on lower cost products only
Anna (2002) and Ralitza (2006) have agreed that the price penetration strategy of the online stores has made
it concentrated to the medium income customers decreasing the marginal profit from the sales; it contributes
to the negative image of the brand and the company loses the premium customer even when they avail the
higher quality products. Moreover, because of the inverse relationship of the price and the products, the
customers who are concerned about the quality of the product hardly prefer online retailers, rather they
choose the supermarkets and other branded retail chain as per the opinion of by Erinco and Paul (2012),
Monica et al. (2018), and Krishnamurthy (2018).
2.1.2.6 lack of trust of the consumers about the quality
Monica et al. (2018), and Krishnamurthy (2018) have opined that the quality assurance policy of the online
retail store is very poor and hard to make the consumers believed that the organization is maintaining the
quality of products; in such case, most of the retailers are leverage the secondary association of the
suppliers, therefore, in case of grocery shopping that is highly perishable, the online retailers have failed to
create this trustworthy image. Behnoosh et al. 2018 have stated that while purchasing the perishable
products, the quality gets superiority over the penetrated price, therefore, in case of purchasing the grocery
items that are highly perishable, the consumers cannot rely on the online stores.
2.2 Strength of the Big box retailers to overcome the threats posed by the click
only retailers
According to Marta and Maria (2015), brick and mortar retailers are actually dominating the retail industry
of Bangladesh in different format from very early ages with their strong competitive edges like bulk
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purchasing capacity, quality assurance, chances of changing to click and mortar retailing, high brand equity
of the private labels, cost efficiency and the experience curve, personal selling at the stores, promotion
through location, service at store and physical evidence of the store, lower pricing for the private labels,
membership and loyalty program, and Omni-channel marketing. However, in response to the threats posing
by the online retailers, the retail brands are considering these strengths to beat them in the competition of
attracting as mentioned by Sunil (2015). Now,further discussion in this sector is going to be analyzed with
the findings of different scholars.
2.2.1 Bulk purchasing capacity
Because of the lawful existence and the financial cooperation from the banks and shareholders, the big box
retailers can invest a huge capital in the expansion of their business activities in different region with deep
assortment with wider variety of the products availing the consumers to get all their necessary things at
hand with a number of choices to compare and select the most preferable one seeking related information
from the salesperson as described by Reyan et al. (2013). This also contributes in availing trade promotion
offers provided by the producers facilitating retailers to purchase the product below the average price; it
contributes to the revenue margin without cutting the cost of operation as opined by Soyoung and Christie
(2009).
2.2.2 Quality assurance
The most significant ability of the brick and mortar retailers is ensuring the quality of the products, though
they don’t grow or produce the products; the impressive logistics system, inventory replenishment strategy,
and selling at the physical evidence expertize assist them to manage the quality of the products according
to the standard set by the food and nutrition ministry of the region as opined by George and Leslie (2004).
Fabio et al. (2009) have opined that on the contrary, the online retailer needs longer lead time that hinders
them to ensure the quality of the highly perishable products like vegetables, fishes, meat, etc.; therefore,
they can never overtake the offline retailer from this sense.
2.2.3 Chances of changing to click and mortar retailing
Because of the lawful presence and the fewer cost of conversion or expansion to the e-commerce channel,
the offline retailers can expand their business activities in online stores too as it is adopted by Sainsbury’s
Wal-mart, Aldi, and other world-class giants as opined by Fabio et al. (2007)
2.2.4 High brand equity of the private labels
Brand trust has a significant impact on choosing the channel to purchase groceries and other products as
the brand name provides with the assurance of the product quality and reasonable pricing; moreover, the
loyal customers of a brand used to search for the particular brand along with influencing the prospects with
19
the WOM marketing strategy to prefer that brand that contributes to managing a community of loyal
customers offering the membership status as agreed by George and Leslie (2004) and by Soyoung and
Christie (2009).
2.2.5 Cost efficiency and the experience curve
With the help of economies of scale and experience curve in case of the private label brands, the offline
retailers have a unique capability that can hardly be mimicked by the click-only retailers as stated by Marta
and Javier (2012). Ryan et al. (2013) have added to this statement that the minimization of logistics cost
using the personal transportation to deliver products in case of home delivery service for the bulk amount
of products and the VMI system of replenishing the inventory contributes to the cost minimization policy
of the retailers.
2.2.6 Personal selling at the stores
In case of supermarket, there are salesperson who are always ready to provide the consumers with the
required information regarding to the products while making the decision of purchasing products and he
can also suggest product to the buyers as he has a deep knowledge about the product quality and brand
value as per the discussion of Soyoung and Christie (2009).
2.2.7 Service at the store and physical evidence of the store
Ryan et al. (2013)have described that message represented by the physical evidence shows the quality of
the products, level of service, its appearance, gesture, and empathy of the salesperson, and the technological
enrichment that has a significant impact on the customer satisfaction with a pleasing experience.
2.3 Consideration of the customers while purchasing groceries from the
retailers
2.3.1 Reasonable pricing
The first and foremost consideration of the customers regarding to purchase their daily necessities is the
pricing of the products; as price and quality have an inverse relationship, often the price penetration strategy
results in negative attitude of the consumers towards the retailers as delineated by Soyoung and Christie
(2009), and Erinco and Paul (2012).
2.3.2 Product quality and feature
Erinco and Paul (2012), Monica et al. (2018), and Krishnamurthy (2018) have opined that the quality of the
product includes the availability of the range of features expected by the consumers in the product; while
taking the purchase decision just after considering the pricing of the products, the consumers consider the
product quality and the features required.
20
2.3.3 Variety and assortment:
The consumers like variation of the products, they want similar products of a different brand to compare
them and select the one that they think is better even if all of them are the same feature ate the same cost as
stated by Erinco and Paul (2012). On the other hand, Monica et al. (2018) have opined that the consumers
seek variety and deep assortment because of the variation in the requirement according to their necessity
and purchasing power of the consumers.
2.3.4 Brand preference and private labels:
The brands promise with the assurance of the quality of the products as they offer but charges higher in
return of that promise, therefore in the USA and the UK, the consumers prefer the private label brands more
than that of the branded products and the offline retailers are taking this opportunity and introducing the
private label brands as stated by Mart and Maria (2015).
2.3.5 Convenience of location
Location is the most significant component of the marketing mix in the retail sector as the convenience of
the location gets the major priority for the traffic at the store, on the other hand, to fulfill the needs of the
grocery items, they used to choose the most convenient stores even if it charges comparatively higher than
the big box retailers situated in considerably away from home as opined by Monica et al. (2018).
2.3.6 Lead time of order fulfillment
While shopping for groceries, customer hardly takes much time to take a decision, therefore, the lead time
of the order fulfillment process must be quicker accordingly as stated by Krishnamurthy (2018). On another
hand Monica et al. (2018) have argued that the consumers know that the price and quality of the grocery
products vary slightly from retailers to retailers, therefore, they take a little time to choose the products
needed and purchase; therefore, the organization must be prompt in filling the order placed.
2.4 Gap identification
As per the discussion, there is a distinct argument that the online retailers are consuming the retail market
and the offline retailers are indifferent to them. Now, the study followed will focus on how this situation is
going to influence the business activities of the brick and mortar retailer along with considering the factors
considered by the consumers while purchasing the groceries from the retailers.
21
2.4.1 Conceptual framework
figure 1: a conceptual framework of the study
22
3. Methodology
Research methodology refers to the distinct procedures, techniques that have been used in identification,
selection, process, and analysis of a topic. The methodology is the process, technique, observation
method, survey and analysis which require a systematic procedure from topic selection to the
preparation of the final report. A systematic manner has been followed by the researcher to identify,
collect, classify, analyze, interpret and present the data.
3.1 Research design:
A variety of research design can be categorized into two divisions according to their objective of conducting
research, such as exploratory research and conclusive research. Exploratory research refers to one type of
research design, which has as its primary objective the provision of insights into and comparison of
the problem situation confronting the researcher; on the contrary, conclusive research refers to the
research designed to assist the decision-maker in determining, evaluating, and selecting the best course
of action to take in a given situation. However, to conduct the following research, the conclusive
research design is going to be used. The objective of conclusive research is to test a specific hypothesis
and examine specific relationships. This requires that the researcher clearly specify the information
needed. Conclusive research is typically more formal and structured than exploratory research. It is
based on large, representative samples, and the data obtained are subjected to quantitative analysis.
Conclusive research is also of two types, such as descriptive research and casual research. For the
assessment of the impact of online retailers, the descriptive research design is going to be used for
the following study as with the help of the descriptive research evidence regarding the effect of online
retailers is obtained as the major objective of the research.
3.2 Research method
The nature of data collection and also the selection and application of data analysis tools are driven by the
research method selection. The two main research methods are below:
Qualitative method: qualitative method indicates the collection of descriptive or no-quantifiable data by
conducting an interview and by observing a selected focus group with the changes of selected variables.
Quantitative research: quantitative research method is purely based on numerical facts and information
where mathematical and statistical data analysis tools are applied to draw conclusions.
23
Mixed research method has been selected considering both qualitative and quantitative data to draw more
valid and precise conclusion. By quantitative study numerical data has been collected by designing a closeended survey paper for the consumers to know which type of retail stress they prefer for their grocery
shopping to evaluate the prevalence of the online retail store in the consideration of the customers while
making a decision. A qualitative approach has been used as the researcher has opted to interview the
managers related to their concern about the growth of e-commerce in grocery retailing and their future
strategy to improve their current state. Mixed research approach has been selected mainly because by only
quantitative study the researcher wouldn’t be able to conduct in-depth analysis as a quantitative research
study is only capable of demonstrating mathematical reasoning and proof. One other hand by the only
qualitative approach, vagueness prevails and long-time is required. Hence to balance this and to delineate
the most effective result mixed research approach has been applied.
3.3 Data collection method:
To ensure the meaningfulness and credibility of the research followed and to conduct the quantitative and
qualitative research, information has been collected from both the primary and secondary sources.
However, quantitative research has been conducted using the primary data collection method only and
qualitative research has been conducted with the help of both the primary data and secondary data
collection. However, in the following section, the detailed data collection method has been elaborated.
3.3.1 Quantitative research and its data collection method
As stated before, the quantitative research has been conducted based on the primary data collected from the
consumers. To collect primary data, a survey with 8 set of close ended questionnaire has been given to the
respondents to choose the option they prefer. Only the consumer survey has been performed to collect
primary data for the quantitative research. The survey has been conducted with the direct interaction with
the households to know their consideration of purchasing groceries from the retailers.
preparing
the survey
qustionairre
conducting
survey from
the
households
assessing
them with
appropriate
statistics
tools
Figure 2: the process of conducting quantitative research
24
3.3.2 Qualitative research and its data collection method
The qualitative research has been conducted for the assessment of two aspects, such as the assessment of
the current situation of the online retailers and the other is to understand the defensive actions and responses
of the brick and mortar retailers to the growth of click only retailers. In case of assessing the responses of
the traditional retailers to the growth of the online retailers, the direct interview has been conducted with
the marketing and often the purchase manager of the offline retailers actually the supermarkets. However,
while conducting qualitative research on the current competitive advantages and drawbacks of the online
retailers supporting the expected growth, the secondary data collection method has been used. In this case,
the data collection tools were credible publishing in the renowned newspaper, government websites and
publishing, an annual report of the online retailers (only the available one). Because of the unwillingness
of the online retailer in responding to the email survey, the secondary research has been performed to mend
the gap about the current situation of the online retailers of Bangladesh.
Requesting for an appointement
through mail
Taking direct interview of the
managers
Assessing different retailers
opinion and finding their
defensive stratgey as a whole
figure 3: Process of conducting qualitative research collecting primary data with the direct
interview
3.4 Questionnaire design
Questionnaire denotes the structured technique of collecting data comprising of a series of questions written
or verbal and the selected respondents are going to answer them. As the direct interview and the direct
survey have been selected as the method of collecting the primary data required, both the structured and
unstructured questions have been used. In case of collecting data for the quantitative data, a set of 11
structured questions has been designed with the non-comparative scale using the semantic differential
method. In the case of collecting data for the analysis of the strength and defensive actions of the offline
retailers, the qualitative research has been conducted with a set of unstructured open-ended question.
25
3.5 Sampling method
Sampling method shows the way to select respondents from a larger population in order to collect data to
perform the study on their opinion and go for a conclusion assessing them. However, the sampling method
comprises the selection of the sampling frame, sample size, and sampling technique.
3.5.1 Sampling frame
As there is actually two population included in the data collection method, such as the consumers and the
offline retailers from all ages and all level of income, the sampling frame will include the households of
Dhaka city and the supermarket chains of Bangladesh that are operating in Dhaka city.
3.5.2 Sample size and sampling techniques
Because of the limitation of time, the unwillingness of the online and offline retailers, the sample size
remains smaller. For the quantitative research on the consumers of grocery retailers, the total sample size
consists of 200 respondents with a type of non-probability sampling that is the convenience sampling as it
is not possible to cover the whole Dhaka city. In the case of collecting primary data for the qualitative
research from the supermarkets, random sampling method has been used from the probability sampling
method with a sample size comprising 4 supermarket chains among 42 supermarkets of Bangladesh.
However, in the case of conducting secondary research, again the random sampling method has been used
selecting seven online grocery retailers among ten online grocery retailers of Dhaka City.
3.6 Data analysis and measurement scale
Data analysis aims at providing the meaning of the data collected from different sources and assessing their
liaison with the problem statement. However, for this research different statistical tools, cross tabulation
method, graphs, charts will be used to present the findings of the data collected presenting them in a
meaningful way.
3.7 The research problems and hypothesis
According to the research problems stated above in the introduction section, the following hypothesis has
been developed for the qualitative and quantitative research conducted with the help of primary data
collected.
There has been selected three research questionnaire and they are focusing on three types of the research
methods, therefore, the hypothesis testing will also be different.
Research question 1: Whether the click only business is overtaking the traditional retailers
26
In this research question, the dependent and the independent variables are going to be assessed with the
secondary research.
Dependent variables

Independent variables
The impact of online retailers on offline

Competitive edges of the online retailer
retailers

Drawbacks of the click-only retailers
Research question 2: Whether the brick and mortar retailers are concerned about the growth of ecommerce
Dependent variable
Independent variables
Offline retailers are concerned about the growth of Strengths of the offline retailers over online
e-commerce
retailers
Research question 3: Whether the customers are considering online retailers for their grocery shopping
Dependent variable
Independent variables
Customers are preferring online retailers for Consideration of the grocery shopping
grocery shopping
27
4. Discussion:
This section is going to provide the actual scenario of the online retailer in Bangladesh as well as the offline
retailers. Moreover, it will also highlight the overview of the respondents selected for the study along with
their financial performance and a brief history. As the respondent, nine online retailers and four offline
supermarket chain have been selected. After providing a theoretical background of the retail management
of Bangladesh, the above-mentioned discussion will be carried forward.
4.1 Current E-commerce scenario of Bangladesh:
E-commerce in Bangladesh has started its journey from 2006 and never look back in this decade and
enjoying an outstanding growth in the last couple of years because of the massive revolution in the internet
access to the mass population. A new horizon has been opened up for business, to be specific electronic
commerce (E-commerce) by none other than one and only internet. E-commerce business involves the
utilization of the Internet in the marketing, identification, payment, and delivery of product and services all
are finished by e-commerce utilizing the web. In Bangladesh a population of 165 million with 33% mobile
internet user, the E-commerce market is by all means considerably potential in up and coming days. Close
by, e-commerce is being largely aligned to the Mobile Financial Service (MFS) as it’s the mode of payment,
which complements each other and demonstrates incredible guarantee to develop. The E-commerce market
in Bangladesh, made a quantum jump in 2017; developing at an incredible 70% from 2016. In 2017, the
B2C E-commerce business market measure adds up to USD 110-115 million (around BDT 900
crore) against the 133,571 crores total retail market. On the contrary, the measure of the Indian mega ecommerce business market remains at USD 17 billion. As indicated by the specialists, Bangladesh Ecommerce business is at a phase where the Indian market was most likely 5-7 years prior. The extent of the
E-commerce business market crossed the Tk 17.0 billion-stamp in 2017 from Tk4.0 billion in 2016, as
indicated by the information accessible with the e-Commerce Association of Bangladesh (e-CAB). The
market measure is relied upon to reach Tk 70 billion (Tk 7,000 crore) by 2021.
E-commerce business in the Asia-Pacific overall is blasting with 71 percent of APAC buyers making an
online buy. Bangladesh is a noteworthy player in this region. Starting in 2016, a sum of $50 million was
invested in this sector. Of the total, $10 million came as Foreign Direct Investment. Be that as it may, the
sum would be a lot higher as Chinese e-commerce giant Alibaba had recently acquired leading online
marketplace Daraz. Retail E-commerce is developing at 72 percent a month in Bangladesh.
Currently, 35,000 individuals and25,000 little and medium enterprises (SMEs) are included with this
division. The quantities of e-commerce business sites and E-commerce pages are 2,500 and
150,000 respectively. The quantity of delivery is assessed at 15,000 to 20,000 at the retail level every day.
28
Daraz is considered as the market leader with 40% of the market share in this industry and Chaldal is
enjoying the highest growth after Daraz.
4.2 Overview of the online retailers selected for the study
4.2.1 Othoba
Othoba.com is an online marketplace founded in 2015, providing localized B2C products in
Bangladesh. The platform lets buyers and sellers meet to make deals on fashion, jewelry, mobile
phones, electronics, home appliances and food & grocery items. Othoba.com is an eCommerce pursuit of
PRAN-RFL Group. Othoba.com launched its operation on November 28, 2015. Initially, othoba.com
started with exclusively selling PRAN & RFL’s products online but gradually they started selling almost
every kind of products. Being a sister concern of PRAN-RFL Group, unlike other startups that are focusing
at the eCommerce as another distribution channel and solely opening it as an extension for selling their own
products, Othoba.com is treating it as an independent venture hosting products of other brands as well. The
platform accepts orders and provides delivery all over Bangladesh and it is regarded as the 5th largest online
shopping mall.
4.2.2 Chaldal
Chaldal.com is a Bangladeshi online grocery and food products provider, founded in 2013. It sells fresh
fruits and vegetables, meat and dairy, groceries, and personal care and household items via its website and
mobile apps. It is currently serving all of Dhaka City, except certain parts of Old Town. Chaldal was
founded by Waseem Alim (Founder and CEO), Zia Ashraf (Founder and COO), and Tejas Viswanath
(Founder and CTO). Now they deliver 1500+ orders per day and serve almost 20000+ household across
Dhaka city. Chaldal received financing from IFC (International Finance Corporation), World Bank. The
company received financing from other private, national and international venture capitalists.
To ensure 1-hour delivery, Chaldal maintains 7 different micro warehouses across Dhaka city. They have
warehouses in Hajaribag, Banani, Rajarbag, Mirpur, Uttara, Dhalibari and Kallyanpur. All the products are
stocked in those warehouses. The representatives prepare and maintain the stocks for delivery. Chaldal only
sells authentic household products sourcing from wholesalers, importers and manufacturers from different
brands like Unilever Bangladesh, Reckitt Benckiser, Square Group, Pran limited, etc. Chaldal has ranked
ninth in world's best 500 startups in 2015. The ranking was produced by Forbes Magazine's startup assister
‘Y Combinator’. It has also received The Daily Star E-Business of The Year 2017. Its name comes up in
the FT/IFC Transformation Business Award 2018.
29
4.2.3 Meenaclick
Meena Bazar is a reputed supermarket chain in Bangladesh with International Standards. It started its
operations in 2002. It has outlets in the capital Dhaka & the port city of Chittagong. It offers a unique
shopping experience by promising quality products and service, convenience, superior customer support
and value for money deals. Meena Bazar is a subsidiary of Gemcon Group. It also produces organic
products, dairy items, prepared food & herbal products.
Meena Bazar is the first recognized superstore in Bangladesh having a website that offers the customers the
opportunity to shop online. the website has been launched in April 2012 with 15 years of experience as the
new enhanced online platform of Meena Bazar. Through this platform, online shoppers can purchase from
a variety of product categories, such as groceries, consumer goods, personal care, and essential household
items. Doing shopping is now only a click away.
4.2.4 Daraz
Daraz is a South Asian online marketplace founded in 2012 by a German venture capital company, Rocket
Internet.
Daraz
Group
operates
e-commerce
platforms
and
logistics
services
in Pakistan, Bangladesh, Nepal, Sri Lanka, and Myanmar. In May 2018, Daraz Group was acquired by the
Chinese e-commerce company Alibaba Group.
Daraz was founded as a Fashion retailer in Pakistan in 2012 but changed to a general marketplace strategy
and business model in 2015 when it also launched operations in Bangladesh and Myanmar. In September
2015, Daraz secured EUR50 million in its Series B funding in order to expand operations in Pakistan,
Bangladesh, and Myanmar. CDC Group, a state-owned Development Finance Institution (DFI) in the UK[5],
invested €20 million alongside a €30 million investment from Daraz existing majority shareholder, Asia
Internet Holdings. In July 2016, Daraz Group acquired Kaymu, a consumer-to-consumer online
marketplace in South Asia, and with the acquisition began operations in Sri Lanka and Nepal. In May 2018,
Daraz Group announced that it had been acquired by Alibaba Group for an undisclosed amount. This move
comes about two years after Alibaba's acquisition of Lazada Group, which was also a startup by Rocket
Internet Group in South East Asian market. Alibaba Group also runs Singapore's Redmart and owns stakes
in India's Paytm and Indonesia's Tokopedia. Daraz Group's five markets (Pakistan, Bangladesh, Nepal,
Myanmar, & Sri Lanka) cover more than 460 million people of which 60% are under the age of 35.
4.2.5 Khaasfood
Khaas Food is an e-commerce platform coupled with a chain of brick-and-mortar stores for safe and pure
foods in Bangladesh. Khaas Food has started its journey in 2015. From the very beginning, Khaas Food has
invested its effort to ensure safe food at the doorstep of city dwellers through a rigorous process. Besides
30
this, it has created awareness among people regarding food adulteration, food safety & healthy food habit.
Since Khaas Food would like to ensure a healthy Bangladesh with sound body & mind and make people
smile. It is to mention that they provide with the private label brand in almost all groceries they are serving
with.
4.2.6 Shaksobji
Shaksobji.com is an online food and grocery store in Dhaka, Bangladesh offering completely hassle-free
shopping experience through secure and trusted gateways. Shaksobji.com strongly believes in Best product,
Best price, and Best quality. We offer you the best quality and reliable shopping with all foreign and local
brands. Now shopping is easier, faster and always joyous for you. Shaksobji.com is providing service 7
days a week and 365 days a year over the phone, email support for its customers. the company is backed
by Rohimafrooz group and Kazifarm’s kitchen. Like Khaasfood, they provide with the groceries only and
most of them are from their own firm.
4.2.7 Shwapno
It is the online platform of Shwapno supermarket that actually serves with the existing brand but in case of
highly perishable goods, they use their own supplier's group who can meet the level of standard
continuously set by them. Since 2008, Shwapno has been providing our customers with the very best fresh
produce, local and imported household needs, as well as an exquisite range of fashions, home accessories,
appliances, and more. In 2016, Shwapno was recognized as the Best Retail Brand in the country, as
awarded jointly by Kantar Millward Brown and Bangladesh Brand Forum. The organization is serving more
than 35,000 customers daily in a combination with their online and offline retail stores.
4.3 Overview of the supermarket chain
4.3.1 Jamuna Hypermarket
It is an upcoming giant in the retail industry of Bangladesh opening in 14th April 2019 with market
penetration policy offering the premium quality and authenticity of the original products keeping an alliance
with Wal-mart. They are going to start their operation on a 1lakh square feet mall with a large and extensive
variety of products from reliable brands. they will serve with both perishable and less-perishable groceries.
They believe that they are operating in a niche market and none of the supermarket or the online retailer
can compete with them as they have the most reliable supplier group consisting of the foreign large retail
brand like Wal-mart and Cosco, the number domestic grocery provider brands like ACI group, square
group, Rahimafrooz group, etc. However, they have large parking facilities where 3,000 cars can be parked
at a time. The company is offering special price penetration policy for their members and the membership
program will be availed after the consumer meet the terms and conditions like registering with an annual
31
charge and maintain the regular shopping from the store. The company is also planning to offer home
delivery service and build an online platform too.
4.3.2 Shwapno
Operated by ACI Logistics Limited, Shwapno is the top retail brand in Bangladesh. As the largest retail
chain in the country, Shwapno touches the lives of over 35,000 households each day. ACI Logistics made
its entry into retail in 2008 as “Fresh and Near” in order to fulfill the company’s “Seed to Shelf” vision of
connecting farmers directly with consumers. Shwapno operates 56 outlets across Dhaka, Chittagong, Sylhet
and Comilla, with a total retail space of 310,000 square feet and a workforce of over 2,500. Shwapno
operates multiple outlet formats from small convenience stores to large megamall layouts (ranging from
1,500 to 27,000 square feet), providing the ideal experience for customers in each location. The company
has been successful in reaching its position as market leader (with 45% market share) not only because of
the exceptional quality, value, convenience and service it offers customers, but because Shwapno has been
successful in developing a truly world class retail architecture and shopping experience for the first time in
the country.
To ensure nutrition and food safety carries only the freshest fruits, vegetables, fish and meat, ACI Logistics
has developed a sourcing network with growers across the country, and today 65% of Shwapno’s fresh
produce is procured directly from source. The company achieved a major milestone in 2016 by joining
Global G.A.P., the leading private sector body addressing the crucial objectives of ensuring safe, sustainable
agriculture worldwide. With 600,000 registered customers, 2500 colleagues, and thousands of suppliers
and growers, Shwapno has a large footprint across the country.
4.3.3 Meenabazar
Meena Bazar is one of the largest retail supermarket chains in Bangladesh with online shopping advantages,
opened in 2002 and operates in Dhaka, Chittagong & Khulna division. Meena Bazar outlets are carrying
almost 8,000-10,000 products for sale & providing convenient shopping experience, easy parking and
friendly customer service for its customers. Meena Bazar is a concern of Gemcon Group, producing organic
products, dairy items, prepared food & herbal products.
4.3.4 Aagora
Agora is the brand name given to Rahimafrooz Superstore, an exclusive venture of Rahimafrooz group.
The retail chain or Rahimafrooz Superstores Limited under the brand Agora had been started in the year
2001. This has been the most dramatic shift in Rahimafrooz’s interests as it represented a diversification
from its main competencies power and the industrial sector. Dhanmondi branch of Agora has total floor
space of minimum 7000 sqft offering 20,000 variety of products covering all essential commodities, edibles,
32
groceries, and other daily household requirements including fresh produce, fresh meat, poultry, fish, packed
and canned grocery, toiletries, and all daily necessities from 10 am till 10 pm. seven days a week throughout
the year. The first store which was Dhanmondi branch was opened on August 24, 2001, at Rifles Square,
Road 2, Dhanmondi.
33
5. Data analysis and interpretation
Data analysis process for this research will be performed in three phases because of the variation of the
purposes to evaluate and the difference between the primary and secondary data collection process. The
quantitative research is going to be performed with the help of primary data collected from the employees
using convenient sampling. The qualitative research is performed on the basis of primary data collected
from the managers of the supermarket on the telephone and on the direct interview. However, data collected
are going to be assessed according to the research question and hypothesis.
5.1 Quantitative data analysis:
5.1.1 Research question 1: Whether the customers are considering online retailers for their grocery
shopping
Analyze the collected data, cross tabulation and the weighted mean average tools are going to be used. Also
known as contingency tables or cross tabs, cross tabulation groups variables to understand the correlation
between different variables. It also shows how correlations change from one variable grouping to another.
It is usually used in statistical analysis to find patterns, trends, and probabilities within raw data. However,
collected data is going to be analyzed and interpreted with cross tabulation and column chart using
Microsoft Excel.
5.1.1.1 Research result with cross tabulation and charts: preference of retail store on the basis of
gender to purchase groceries
On the basis of gender
Male
Female
30
15
5
50
100
Superstore
Temporary vendors
Online store
Bazaar
Total
Total
35
20
5
40
100
65
35
10
90
200
table 1: preference of retail store
The table above shows that the number of male and female prefers different types of a retail store to
purchase their groceries required daily. It shows that only 5% of both male and female consumers prefer to
buy their groceries online and 17.5% of them prefer temporary vendors who carry groceries on the cart and
goes door to door as they are more convenient to purchase the perishable goods. It is to note that irrespective
of gender, they prefer Bazaar (a gathering of vendors for at least half of a day to sell different perishable
goods every day) to purchase their product.
34
Male
superstore
30%
bazaar
50%
temporary
vendors
15%
online store
5%
figure 1: preference of retail store by male customers to buy groceries
The above figure shows that male consumers mostly prefer bazaar to shop groceries and their next
preference Is the superstores. with the increasing per capita income, the consumers become more conscious
about the quality of goods, therefore, the trend shows that super shops are enjoying traffic at their stores.
On the other hand, it is to note that, most of the consumers avoid to purchase groceries online as the “touch
and feel” trend is still strong now grocery retail and the inability of the online stores to ensure the quality
of goods and the least lead time are the drivers of their not being preferred.
female
bazaar
40%
superstore
35%
temporary
vendors
20%
online store
5%
figure 2: preference of retail store by female customers to buy groceries
35
This figure has shown that the acceptance of the superstore is higher among the women and 35% of them
prefer superstore after bazaar. The acceptance of the online store is the same as the male consumer but their
consumption from the temporary vendor 20% that is higher than that of the male shoppers. bazaar is
traditionally the most popular form of retail shop specialized in grocery retailing.
on the basis of gender
50
40
35
30
20
15
5
SUPERSTORE
TEMPORARY VENDORS
5
ONLINE STORE
male
BAZAAR
female
figure 2.2: the comparative scenario of preference on the basis of gender
irrespective of gender
superstore
32%
bazaar
45%
temporary vendors
18%
online store
5%
figure 3&4: preference of retail store by consumers irrespective of gender to purchase groceries
36
The bazaar is the most popular form of grocery retailing as 45% of the consumers on an average prefer
bazaar for grocery shopping, the next eminent form of retail is the superstore that is enjoying the growing
trend among the consumers that results in 32% preference of the consumers. Temporary vendors have a
larger portion in getting acceptance among the consumer by 18% but their growth has been threatened with
the increasing concern over the health and nutritious value of the products.
5.1.1.2 Research result with cross tabulation and charts: preference of retail store on the basis of the
income range to purchase groceries
5000 to
25000
superstore
temporary
vendors
online store
bazaar
total
On the basis of the income range
25001 to
45001 to
65,001 to
45000
65000
85,000
2
10
15
20
8
4
85001 Total
plus
15
23
65
2
1
35
1
30
53
2
12
31
1
22
41
2
18
39
4
8
36
10
90
200
table 2: the preference of different types of retail stores on the basis of the income range
The table shows the number of consumers on the basis of the income range prefer different types of retail
stores. It is to note that temporary shops are mostly preferred by lower-income consumers and the
superstores are mostly preferred by the higher income and the medium affluent consumers because of their
increasing concern over the quality and decreasing price sensitivity. Bazaar is the most popular form of
retail in all income range irrespective of how much they are earning.
5.1.1.2.1 Preference for superstore by income range
superstore
3%
15%
5000 to 25000
36%
25001 to 45000
23%
45001 to 65000
65,001 to 85,000
23%
85001 plus
37
figure 5: the preference of superstore according to the income range
36% of the consumers from the higher income range uses superstores to purchase their groceries; on the
other hand, the lower income consumers hardly go for shopping in the supers shops (3% consumers). 66%
of the middle-income consumers have opined that they are using superstores as they are more trustworthy
in case of buying the contamination-free goods maintaining the standard of the products. Only 18% of the
lower middle income consumers prefert obuy their grcoceries from the supermarkets.
5.1.1.2.2 Preference for temporary vendors by income range
temporary vendors
6% 3%
11%
5000 to 25000
57%
23%
25001 to 45000
45001 to 65000
65,001 to 85,000
85001 plus
figure 6: the preference of temporary stores
57% of the lower income people prefer temporary venmdors to collect groceries thay need daily. In case of
the middles income comsumer 34% of them prefers temporary vendors. Actually most of them avoid this
vendors because fradulant charging of the goods and their high variability. The affluent class actually do
not prefere to purchase from the superstores and they hardly consider the temporary stores to meet their
grcocery need.
38
5.1.1.2.3 Preference for online stores by income range
online store
10%
10%
40%
5000 to 25000
25001 to 45000
20%
45001 to 65000
65,001 to 85,000
20%
85001 plus
figure 7: preference of online store by income range
40% of the online consumers are from the affluent class nd the middles income consumers comprises 40%
of the demand of online store. With the increasing number of the people negaged in the workplace can
improve the demand of the online stores. However, it can be declared that the lower income people don’t
use the online stores and this types of stores do not have any place in the consideration ste of the consumers
usually.
5.1.1.2.4 Preference of Bazaar to purchase groceries:
BAZAAR
65,001 to
85,000
13%
85001 plus
9%
5000 to 25000
33%
45001 to 65000
20%
25001 to 45000
25%
figure 8: reference of bazaar to purchase groceries
39
Bazaar is the mostly preferred form of retail stores and the first choice of the consumers of Bangadesh
irrespective of gender and income range. However, comparing among them, the middle income consumers
are the most loyal customers of this kind of reatilers comprising 45% of the total sales. The lower income
consumers also prefer the bazaar most to purchase perishable and non-perishable goods.
5.1.1.2.5 Preference of different stores by income range:
BY INCOME RANGE
5000 to 25000
25001 to 45000
45001 to 65000
65,001 to 85,000
85001 plus
35
30
25
20
15
10
5
0
superstore
temporary vendors
online store
bazaar
figure 9: preference of different retail stores by income range
The graph above delineates that the bazaar is the mostly preferred stores among all four types of the retailers
and the online stores are the least preferred on the contrary. Superstores are getting popularity with the
economic development of Bangladesh. The demand of the temporary vendors are losing with the home
delivery services of the superstores. However, among the lower income population, this type of retaiers are
still enjoying the highest consideration.
5.1.1.3 Research result with cross tabulation and charts: preference of retail store on the basis of
purchase criteria
Criteria
Supersto Temporary
re
vendors
50
Price
80
Variety and assortment
90
Discount purchase
100
Service at store
100
Standard of product
40
Convenience in purchasing a perishable
product
80
Home delivery service
40
Online
store
60
20
10
40
40
80
30
10
70
20
20
5
Baza Tot
ar
al
60 200
90 200
30 200
40 200
40 200
75 200
80
30
10
200
120
70
80
810
Brand preference
Fresh goods
Nonperishable goods
Total
5
50
20
405
40
10
20
255
35
70
80
530
200
200
200
200
0
table 3: preference of different retailers on the basis of purchase criteria
The result shows that the superstores have been scored highest in case of serving well at store, standard of
products and in case of brand preferences. The bazaars are the next best performer in case of purchase
criteria as they have no quality assurance policy and as it is quite temporary, there is nothing like at store
service. The online stores are poorly performed retailers that are being preferred only when they offer a
huge discount. Temporary vendors are also the poor performer in case of quality of goods, brand preference,
and variety and assortment; on the contrary, in case of convenience to purchase and pricing, they perform
better. The result found in the pivot table above has been shown in the chart follows to improve data
presentation.
purchase criteria
140
120
100
80
60
40
20
0
superstore
temporary vendors
online store
bazaar
figure 10: the preference of different retailers on the basis of purchase consideration
41
5.1.1.3.1 By price:
by price
superstore
temporary vendors
online store
bazaar
70
60
60
60
50
50
40
30
30
20
10
0
price
figure 11: preference of retailers by price
The above figure highlights that the consumers have opined that they get reasonable price at temporary
vendors and bazaar as they can enjoy a strong bargaining power there. In the superstore, the prices are
maintained with a standard margin and the company tries to penetrate the market with the price penetration
policy but because of the cost of location and operation, they cannot beat the temporary vendors and the
bazaar in charging lower price. In the online store, the pricing system is very poor and they use decisive
pricing that discourages the customers to consider them according to pricing criteria. Therefore, 60% of the
customers supports the temporary vendors and the bazaar as the retail destination. And 25% of them prefers
superstores and only 15% of the consumers supports the online stores.
42
5.1.1.3.1 By variety and assortment
BY VARIETY AND ASSORTMENT
temporary vendors
online store
bazaar
10
20
80
90
superstore
VARIETY AND ASSORTMENT
figure 12: preference of retail store considering variety and assortment of the products
Considering the variety and assortment, bazaar and the superstore are enjoying a unique selling proposition
managing deep assortment and high variety of products. The temporary vendors are the poorest performer
as they cannot manage variety rather carries item highest sold items only. Bazaar has the highest variety
and deepest assortment as per tradition and because of the gathering of different retailers together ‘
5.1.1.3.2 By services at store
service at store
120
100
100
80
60
40
40
40
20
20
0
service at store
superstore
temporary vendors
online store
bazaar
figure 13: preference of retailers by services at store
43
According to the responses shown in the above chart, it can be significantly noted that the superstores are
the leader in serving at store that actually increases their operational costs, Bazaar and the temporary
vendors can influence their consumers with the personal selling strategy, therefore, 40% of the respondents
has shown their support to these stores. On the contrary, there is a huge gap of service in the online stores
as they can hardly manage instant response to the query of the customer that has contributed to their
limitation of service.
5.1.1.3.3 By maintaining product standard
standard of product
120
100
80
60
40
20
0
standard of product
superstore
temporary vendors
online store
bazaar
figure 14: preference of retailers by product standard
The chart depicts that in case of standard of products 50% of the respondents supports the superstore and it
is one of the strongest competitive advantages of this type of retailers. None of the other types of retailer
assure the standard of the products offered to the market as much as they can. On the contrary, the temporary
vendors and the bazaar can show their products to the consumer while negotiating and the consumer can
check the product by themselves to ensure the product quality, therefore, 40% of the respondents has also
supported their product standard. However, because of the high perishability of the products has resulted
in such encumbrance for the online retailers to meet the standard especially in case of highly perishable
goods.
44
5.1.1.3.4 By convenience of purchasing
CONVENIENCE OF PURCHASING
temporary vendors
online store
bazaar
5
40
75
80
superstore
CONVENIENCE IN PURCHASING PERISHABLE PRODUCT
figure 15: preference of retailers in case of convenience of purchasing groceries
The figure above shows that the temporary vendors and bazaar performs better in this criteria as 40% of the
customers has supported temporary vendors as they carry product at the doorstep of the consumers. 32.5%
of the respondents has also opined that after temporary vendors, bazaar is the most convenient place to shop
groceries. 20% of the respondents has also supported superstores as they are trying to get closer to the
consumers establishing their shop closest to their consumer. Only 5% has supported the online store as they
can compare different sites at a time but this judgement goes wrong most of the time.
5.1.1.3.5 By home delivery service
home delivery service
90
80
80
80
70
60
50
40
30
30
20
10
10
0
home delivery service
superstore
temporary vendors
online store
bazaar
figure 16: preference of retailers in case of home delivery service
45
The above chart shows that the superstores and the temporary vendors has performed the best in this regard
as per the opinion of 80% respondents. Though the only product delivery and service encounter channel of
online store is home delivery service, the inconvenience of the company to reach the location of their
consumers. Usually, Bazaar does not provide any home delivery service but rarely, the delivery boy is sent
to the loyal customers to send the products they require.
5.1.1.3.6 By brand preference
brand preference
140
120
120
100
80
60
40
40
20
35
5
0
brand preference
superstore
temporary vendors
online store
bazaar
figure 17: preference of retail store with the availability of the branded product
While purchasing branded groceries, 60% of the respondents prefer superstore that is another strong
competitive edges of the superstores. They can ensure the originality of the products and can manage te
assortment of various brand. Online retailer has also performed well, thus 20% of the respondent has
supported them. Bazaar can manage the branded products but there is no policy to check the originality of
the products and brands.
46
5.1.1.3.7 By freshness of goods
fresh goods
superstore
80
temporary vendors
online store
70
bazaar
70
70
60
50
50
40
30
20
10
10
0
fresh goods
figure 18: preference of retailer regarding to freshness of goods
35% of the respondents believe that the superstore and bazaar can serve the best in providing with the fresh
vegetables and highly perishable goods. 25% of them has opined that as the temporary vendors purchase
their products daily from bazaar, they can also maintain freshness of the product. In case of online retailer,
they are performing almost at a zero level with only 5% support that delineates the indifference of the
consumer to these grocery retailers.
5.1.1.3.8 considering the convenience of purchasing of less perishable products
less perishable groceries
superstore
90
temporary vendors
online store
80
bazaar
80
80
70
60
50
40
30
20
20
20
10
0
non perishable goods
figure 19: preference of retailers in case of perishable goods
47
80% of the consumers have supported the bazaar and superstores in case of buying less-perishable goods
because of convenience and assurance of quality of the groceries. On the other hand, 10% of the respondents
have supported the online store and actually in case of grocery shopping the touch and fell effect works
better. Therefore, the online retailer is operating poorly to grab the market share here.
5.2 Qualitative research on offline stores:
To conduct the qualitative research on the online stores, I have interviewed four marketing managers of
four different superstores on the following questions and the findings are going to be assessed according to
the questions below5.2.1 What is your strategy to deal with the marketing strategy of online stores?
All the managers of the supermarket have insisted that the current growth of the online is not going to
threaten the supermarkets, therefore, they are not going to take any offensive action in response rather
Meenabazar, Shwapno, ACI, and Pran RFL have expanded their presence to the online retail store such as
Meenaclick, Shwapno.com, Othoba.com, and Ajkerdeal. Their bulk purchasing capacity, standard of
product, personal selling strategy, physical ambiance, reasonable pricing, and the least lead time facilities
are contributing to defend the online store. The manager believed that the online retailers can never
dominate the grocery market. The private label brands are also contributing to the strength but Khashfood
and Shaksobji have launched their private label brands that creates a competitive environment for them.
5.2.2 What do you think about Amazon and Ali-baba as they are entering into the retail industry of
Bangladesh?
The marketing manager of Jamuna Hypermarket has told me that if Ali Baba and Amazon entered in to the
retail market of Bangladesh, it will be threatening for not only the offline stores but also the online stores
of Dhaka City as they have large number of suppliers with a competitive edge of assuring reasonable price
balancing the quality of the products. The category manager of Aagora have also supported his statement
and added that the Amazon and Ali-Baba can capture a large share of their sales, in such case, they will
focus on prompt delivery and goes for defensive action taking part in the online retailing too with mobile
application and web presence. The purchase manager of Meenabazar and the marketing manager of
Shwapno have agreed with them. It is to note that Daraz has already been acquired by Ali-baba that means
this giant online retailer has entered into the retail industry of Bangladesh but initially they are including
the local suppliers only in the supply chain of this market expansion.
48
5.2.3 What are the challenges you are facing because of the growth of online stores?
The purchase manager of Meenabazar has noted that they are enjoying a potential growth of their online
presence Meenaclick and the sales growth of their online retail is lucrative and satisfactory. But he believes
that the secondary association of Meenabazar is the reason behind the success of their e-commerce presence.
The category manager of Aagora has said that they have expanded their market to online retail creating a
strategic alliance with Kiksha, but unfortunately that did’nt work well and they are going to withdraw the
deal. Therefore, he thinks that for the short run, they are not going to face any challenge from the online
retailers because of the indifference of their target market to the market offering of online retailer with
extensive discount. The purchase manager of Jamuna Hypermarket has mentioned that their online presence
will be the complementary channel to ensure the coverage of their prospects not to beat the online stores as
they have the confidence that it cannot overtake the offline stores.
5.2.4 What else challenges you are facing to grow in this industry?
In spite of the growth of the GDP by 7.3% and the growth of per capita income, most of the prospects are
still believing in the traditional shop like bazaar that actually hinders their growth. Besides, the consumers
expect the unique and highly standard products here like for personal care products, they prefer the global
brands, that often cannot be served and resulted in lost sales. Moreover, the convenience of shopping bazar
and the bargaining power of the consumers there are also hindering to grow the appeal of their marketing
mix. Besides, the consumers want mass customization and new product development meeting their
requirement that can hardly be traced by the retailers. For instance, the demand of Ready Meal Kit is
growing with the participation of women at work but none of the retailers of Dhaka City has focused this
demand. The unstable political situation of Bangladesh also hindering the growth of profit margin but in
spite of these drawback, the manager of Jamuna Hypermarket has told that if they can serve their consumer
at the wholesale price and maintaining the quality of product, they will soon capture a large share of this
industry after their opening on 14th April.
49
5.3: Secondary research on online stores:
50
6. Overall findings:
51
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