Characteristics of Retailing in Bangladesh

The major characteristics of retail trade in Bangladesh can be explained under the following broad heads :

(1) Smallness of operation :

Unlike developed countries of the world, the retail trade in Bangladesh is carried on a small scale. The capital investment is also very small, which does not exceed Tk. 10,000/-in majority of the cases and the said fund is mostly financed by the owners themselves. No large-scale retail store exists in our country.

(2) Individual ownership:

About 4/5th owned by sole traders and approximately 1/6th are partnership organisations. Some private companies and co-operative stores are also to be found in the retail trade. The predominance of sole tradership is due to the fact that retailing is primarily done here on small scale, capital requirement is small and it can be mom easily formed.

(3) Little relationship with other industries :

Another feature of the retail trade is that the different industries and other enterprises are not connected with the retail trade. However in the towns like Dhaka and Khulna, the case is different. In about 19% cases the retailers have other kinds of enterprises under the same ownership. This is especially true in case of ready-made garments business units which have manufacturing line.

(4) Management of retail shops :

So far the man: Bement of the retail trade is concerned, most of the businesses are managed by the proprietor himself. Sometimes they take the help of the members of the family for the smooth running of the business. About one-third of the retail shops do not employ any salaried staff at all.

(5) Working hours in retail stores :

Retail stores show long working hours. The reason is that the shops are mostly attended by the owners themselves or perhaps the alternative use of the owner’s time is very little.

(6) Nature of obtaining supply:

Retailers in Bangladesh get their supply from two sources, such as wholesalers and manufacturers. In Dhaka, particularly, big retailers buy more from manufacturers than small retailers. Most of our retailers, however, go to the sources of supply to obtain their goods. Contacting by mail is seldom used due to inadequate facilities for communication and information by the wholesalers about the retailers. This personal contact by retailers increases the cost of retail marketing in Bangladesh.

(7) Financing of retail trade:

Retail business is financed mostly by the retailers’ own fund. About 68% of capital is provided by fund ; 32% by borrowing from banks and credit from suppliers. Many of the retailers are also to make advance payment to suppliers.

(8) Selling functions in retail trade :

(a) Cash not credit : Retail sales of manufactured goods is done overwhelmingly by cash (about 90 %) and not by credit.

(b) Seasonality : Seasonality in retail business in our country is common. The peak season starts from November and continues upto February and dull season starts from March and continues, upto June or July. This happens due to weather conditions, harvesting season and liquidity-capacity of public.

(c) Pattern of variation : There is also a pattern in variation of sales in a particular month. The sales increase considerably towards the begining of the month. The shopping time is either morning or evening, mostly evening.

(9) Price policy in retailing:

Price policies followed by the retailers are of four types:

(i) A mark-up on purchase price.

(ii) Following the price suggested by the manufacturers.

(iii) Fixing the price according to convenience.

(iv) Following the price fixed by his competitors.

There are some cases where the retailers fix the prices seeing the price of his competitors. But the number of retailers following this policy is insignificant,

Among these policiea, mark up On purchase price is widely followed by them. Ninety per cent of retailers follow it.

(10) Higgling:

This is another peculiar characteristics of retailing. The products whose prices are not fixed, are generally bought and sold in retail stores over higgling with buyers.

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