Online shopping

Online shopping becomes more expensive | The star of the day

Shopping online is becoming increasingly expensive as courier companies across the country have collectively increased their rates in response to the recent increase in fuel prices.

For example, the country’s two main courier and logistics service providers – eCourier and Paperfly – have already increased their rates by around 20% in the face of rising transport costs.

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The move could further hamper the growth of the e-commerce sector, which was already slow due to scams that surfaced last year and ongoing inflation.

“We have increased delivery charges by 20% for long distance and long distance deliveries in view of rising fuel prices,” said Biplob G Rahul, Founding CEO of eCourier.

As the increased fee will be levied on the end consumers, this means that an item that used to cost around 100 Tk, including delivery costs, will now cost around 140 Tk.

Similarly, document delivery charges are now 35 Tk to 40 Tk whereas previously they were 25 Tk.

“It will directly affect the online shopping industry,” he added.

He went on to say that if courier companies like his don’t raise their fees, they will have to spend huge amounts of money and ultimately suffer within six months for bearing the extra cost.

Rahath Ahmed, co-founder and chief marketing officer of Paperfly, said soaring fuel prices have driven up delivery costs and that’s why they had to increase delivery charges as well.

“In addition, other online and offline logistics and delivery companies have also increased their fees given the current situation,” he added.

Ahmed went on to say that it would not be possible to maintain the business without adjusting delivery charges. However, he fears the move will impact demand as people from low-income households and outside of Dhaka may reduce their online shopping given the extra charge.

The government recently revised up the prices of diesel and kerosene by 42.5%, while the cost of gasoline and octane increased by 51.1% and 51.7% respectively.

A day later, the authorities increased bus fares by up to 22%.

The local carpooling platform Pathao has also increased the price of its registered two-wheelers by 16 to 18% on average.

Now Uber is also considering raising the price.

Meanwhile, courier services SA Paribahan and Sundarban have also increased their rates.

AKM Fahim Mashroor, managing director of Delivery Tiger, a digital parcel aggregator for SMEs, said it had not raised the price yet and would watch the situation for another two months.

“As we make deliveries mainly for small and medium-sized entrepreneurs, a sudden price increase would be a big burden for them. Also, many of our deliveries are made by bicycle,” he added.

Mashroor then said that 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.

“The government must suspend or reduce these VATs to help e-commerce businesses stay in this situation,” he added.