How to Buy a Parrot on Facebook (Dhaka, Bangladesh)

Once the pandemic began and school was cancelled or moved online, a management professor at a university in Dhaka suddenly had time to pursue his dream occupation: becoming a bird breeder. Kabir, who’s information could not be disclosed due to privacy concerns, took notice of the change in his schedule and searched through Facebook to find a marketplace for birds. He joined about a dozen groups that offered a foot in the door to avian retail. 

The first pair of birds Kabir bought happened on the “A.S. Cockatiel changes hands” page. The transaction was seamless. The birds were delivered to Kabir’s apartment doorstep where he paid in cash and celebrated the beginning of his dream venture. Shortly after his first purchase, Kabir then purchased 24 more pairs of birds from a variety of breeds on these Facebook exchanges.  Facebook shopping is quite easy, which explains why this story reflects e-commerce in Bangladesh. 

In the absence of giant marketplaces like Amazon, Facebook has taken over as the bespoke retailer of Bangladesh. The e-commerce market there is huge, valued at $1.6 billion and has low barriers to entry because of low start-up costs and a struggling economy. All an entrepreneur needs is $350 for equipment and internet connection to start their own marketplace. With the younger generation of workers enduring massive layoffs from the pandemic, aspiring entrepreneurs have taken advantage of the opportunity to start their own e-commerce exchange. The difference between these start-ups and how most people use Facebook is that the sellers don’t have to be licensed. In fact, most of them aren’t. Facebook hosts a cheap way for people to sell their products. This is a growing phenomenon throughout South Asia and even has a name: F-commerce. By helping a struggling economy fight through limited job growth, this new business model helps people make due with what’s available. 

F-commerce brings forth an innovative selling space, where people sell small-ticket items and use the marketplace for their hobbies to create a profitable business. The term F-commerce is a relatively new trend, primarily in response to high unemployment amongst younger generations. It blends the innovative thinking and social intuition of a new generation of workers. According to Forrester’s retail analyst, Sucharita Mulpuru, F-commerce is a platform where sellers and buyers socialize at any given place. With the ease of access via social profiles, consumers who participate in F-commerce can feel a personal connection with sellers because their biography is readily available. Consumers are also given a huge product catalogue, can read product ratings and fan reviews, as well as take suggestions from friends all on this ideal platform (Zabeen et, al. 2013). It’s the “all-in-one” site that makes it so enticing to a lost workforce eager to get back to working. 

Social commerce is unique in its model and can’t be in competition with big-named sites such as Amazon (since it’s not there) or the ones popular in Bangladesh (i.e. Evaly, Ajkerdeal, and Daraz). This type of business is purely individual in that transactions between the buyer, seller, and sometimes third party are unique. For example, a woman could be selling kits of yarn to a material exchange group on Facebook. She could purchase the yarn for $1.99 and sell for $4.99, making $3.00 in profit over a single roll of yarn without the third party (original yarn seller) knowing. This is called retail arbitrage and is allowed because of the lack of regulation on Facebook Marketplace. 

A spokeswoman from Facebook who works in the marketplace division commented on the lack of regulation saying they are trying to make the marketplace a safe and reliable place to buy and sell.  However, this model has been prone to fraudulent activity. In just this past year a woman in Toronto wanted to buy a Kylie Cosmetics skin care kit from another woman in Toronto for $30. The payment went through but the product didn’t. The chief fraud strategist at risk management company, PointPredictive, calls it “scammer’s haven,” infested with fraudulent Venmo accounts, fake bills, and bad checks. Despite this opinion, emerging economies like those in South Asia don’t seem to be complaining as much. 

In Bangladesh, the government holds grave concerns about money laundering, so they only issued 1.5 million credit cards to a 162 million-person market. “Almost all F-commerce payments are made via cash on delivery” (Chistopher, 2020). Types of fraudulent activities that you would typically see in developed economies with Venmo accounts and digital transaction payments are rare in these countries. It is also because there is no major e-commerce website that many Bangladeshis make a living off of being a seller on the Facebook marketplace. 

F-commerce is increasingly popular across a global scale with 550 million participants in 2018. About 34% of businesses in Vietnam run their operations on Facebook marketplace. At the same time, 1 in 3 people in the United States use the platform. This explains the surge in popularity, however, it doesn’t explain the dependence on the marketplace for a developed vs. emerging economy. In Bangladesh and other South Asian developing economies, Facebook marketplace is the most prominent channel for small businesses to reach their customers. 

“If Amazon were to enter, they could wipe out the entire market” (Christopher, 2020). It’s not quite at that point, though. Since Facebook is so popular, whole sections of Bangladeshi society consider “being on the internet” the same as being on Facebook. It will take a while for this South Asian economy to be taken over by a conglomerate, especially when teachers out of work like Kabir are so dependent on income from social commerce. 

Works Cited:

Christopher, N., Nilesh Christopher is a reporter based in Bangalore, Adeoye, A., Almendral, A., & Tobin, Z. (2020, July 28). If Zuckerberg ran your economy, it would look a lot like this. Retrieved August 06, 2020, from https://restofworld.org/2020/bangladesh-economy-runs-on-facebook/?utm_source=Benedict%27s+Newsletter

Safdar, K. (2019, August 16). Facebook Marketplace: The Wild West of E-Commerce. Retrieved August 06, 2020, from https://www.wsj.com/articles/facebook-marketplace-the-wild-west-of-e-commerce-11565947821

Zabeen, M., Ara, H., & Sarwar, N. (2013). F-Commerce in Bangladesh: “Venit, Vidit, Vicit”. Retrieved 2020, from https://www.researchgate.net/publication/316275091_F-Commerce_in_Bangladesh_Venit_Vidit_Vicit