Online shopping has gotten expensive as inflation and fuel price hike is making delivery costs go up.
With logistics companies increasing fare prices, end consumers are having to bear the cost.
Logistics companies such as SA Paribahan, Sundarban, eCourier, and Paperfly, among others, have increased their rates.
Among them, eCourier and Paperfly have already adjusted their service prices, increasing them by 20%.
“Fuel price hike has increased the costs of transportation for which we had to raise the price of our delivery services,” Shahriar Hasan, founder and CEO of Paperfly, told Dhaka Tribune.
“Almost all online and offline based logistics and delivery companies have also increased their charges in the current context,” he added.
According to the Paperfly’s top brass, sustainability of the business would be at high risk if delivery fees were not adjusted.
Industry insiders said that the move will impact demands in the lower-income segment as well as the demographic residing outside of Dhaka, as they will reduce their online purchases.
They also said that increased service prices will be levied on end consumers, which means that goods worth Tk100 previously including the delivery fee will now be priced at about Tk140, while document delivery previously costing Tk25 will cost around Tk35-40.
If prices were not adjusted, businesses in this sector would not be able to sustain operations after six months, insiders claimed.
Local ride-sharing platform Pathao also raised the fare for riding its registered two-wheelers by an average of 16-18%, while Uber is also resorting to increasing its prices.
According to an official of the e-commerce Association of Bangladesh (e-CAB), the added burden on consumers and businesses can have potential impact on the sector’s growth despite recovering remarkably from the scams of some rogue players of the sector that came to light last year.
“This will directly affect the online shopping industry with the added burden being pushed towards the consumers and businesses of the sector trying to sustain their livelihood,” he added.
The government recently revised up the prices of diesel and kerosene by 42.5% while the cost of petrol and octane rose 51.1% and 51.7% respectively.
A day later, the authorities increased bus fares by up to 22%.
However some businesses like Delivery Tiger, a digital SME parcel aggregator, reportedly told the media that they had not increased the price yet and were observing the situation for the next few months.
According to its CEO AKM Fahim Mashroor, since the aggregator made deliveries mainly for small and medium entrepreneurs, a sudden price hike would be a big burden for them.
On top of that the company does a significant portion of its deliveries using bicycles, he said.
He said the country’s e-commerce and f-commerce sector is still small and the government charges 15% VAT on parcel delivery and 5% VAT on online product sales, which needs to be suspended or cut to help e-commerce companies sustain their operations.
