Digital trade at this moment has become even more relevant because of the pandemic. Whatever opportunity of digital trade was there, it has just got some more wind towards it. And it is going to be more exciting in the coming days. If you are just talking about B2B digital trade, it's already a six trillion dollars market and definitely it's going to grow much faster from here. B2B has become such a big thing in comparison to the world economy as well. At this moment the world economy is about 98 trillion dollars, in perspective to that B2B shares more than 6% and the size will only grow.
So, what are the opportunities of digital trade? If we look at what digital trade has done in China’s economy it will be clearer to understand the opportunities. China has been known for being the factory of the world. A lot of small companies in China were making a lot of different items. But for the lack of communication, marketing and global promotion, these companies and their products were largely out of sight of the global audience. Suddenly all those issues were fixed by Alibaba and that's why they grew so fast. Right now, Alibaba is an 800-billion-dollar company. It just tells you what a specific platform can actually do in digital trade and economy.
In Bangladesh the opportunities are endless. But it requires a lot of technological support regarding financing and tax payment. If we are talking about a cross-border trade, then we talk about import-export issues such as tax, VAT, and also the foreign exchange regulations that we have.
How do we solve all these issues? We need to be proactive in identifying and addressing all those issues to give small to medium sized companies a global exposure. Also, we need big data, AI and machine learning platforms to make the service more customer experience-centric. In the long run Merchant Bay also can benefit from these technologies to provide improved experience to the buyer and supplier community. SME companies can take advantage of technology by doing drop shipping as well. They can also put all of their products online for the world to see.
Another important thing is trust. How do we know that the buyer will actually make the payment to the supplier and the seller will actually give good products to the buyer? It is going to be very important for a platform to do the initial screening before they would actually allow those trades. If we can address the trust factor and can build a trustworthy platform, the experience of both sides will be better. An updated and robust credit rating score and the credit rating system can be a solution to this problem.
In the coming days, a lot of those things will have to be integrated to make it a really smooth process. For example, custom and other agencies integration will be required. BEZA and BIDA are trying really hard right now to build a one stop service. They could automate some of them but integration of a lot other services is still underway and those are also getting done gradually.
I believe with the government's digital Bangladesh goal ahead of us and through the integration of different technologies we can make a smooth and fast digital trading platform. Now it may seem a long way to go, but when it all is done at one point, I think we will have much more digital trade than what we will see at present.
Tareq Rafi Bhuiyan is the managing director at New Vision Solutions Ltd. This piece is transcribed from his speech at ‘Digital Trade in Global Perspective’ webinar in Digital Trade Week 2020 organized by Merchant Bay. The full recording of the webinar session is available at facebook.com/merchantbaybd
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