Why Bangladesh is a more expensive country than you think?

I am no expert in Economics, neither I have a vast knowledge of money and Finance. But I was lucky to be able to be outside of Bangladesh for a while and compare the pricing 1st hand over the last few years. Is it only me who feels Bangladesh is expensive when it comes to buying consumer products and goods? I’ll leave it to you guys to decide. But here, I’ve tried to depict few of my thoughts about why this is a true claim even if numerous research and papers will say Bangladesh is one of the 10 cheapest countries to live (even if you consider only Dhaka).

Thought 1: Discriminatory living standard

Bangladesh has one of the most discriminatory living standards in the world. The rich and their reach both lives far beyond the average person’s buying power. Most of the niche marketplaces are targeting the rich as their customer only because it’s going to be an easy sell. High priced brands are everywhere in the world. But these will stay within few industries like real estate, automotive and personal toiletries and few more. But in Bangladesh, there are even Deshi sweet-shop Brands targeted towards the affluent society! Most of the marketplace are divided into 2 when it comes to their target customers. It’s very rare that a rich and a poor guy would go into the same shopping mall for shopping, would go to the same cinema or would use the same medium as their primary transport. There will always be a tendency to avoid each other and the conspiracy to stop them accessing the same place is very much evident. I could give you hundreds of example but I feel only few will help you find out the rest. You’ll not generally find someone with high-income travelling in a public transport as the service doesn’t satisfy their demand at all. On the other hand, it will be quite unimaginable that a poor person will be visiting a super store every day for their household groceries.

In a developed world scenario, no matter what is someone’s income should find a public transport comfortable and should be able to visit a super store every now and then. This social discrimination is taking high toil from the middle-class society of Bangladesh. Foreign visitors are also a niche who are victims but not the usual expats though (They already know where they are supposed to do the shopping from). We being foreign residents find that you’ll have to pay an extra premium for every sort of day to day products or services because they are mostly targeted to be sold only to the rich customers. You can’t eat food from the street or rent a room in a cheap hostel because the hygiene rating would not match your expectation. ‘livable’ Youth hostel is still at its concept stage over here. You’ll be sold foods in the restaurants at a higher price just because they are ‘’safe to eat’’. In Bangladesh, Riding a public bus will be so risky that You are only limited to high priced car rentals even if you’re trying to go from Point A to point B because there is not enough Taxi when you need them. I have not yet found a taxi rank or universal taxi calling number that works. This way, your travelling cost for a single journey in Bangladesh will exceed the cost of travelling to cities like New York, London or Tokyo.

Thought 2: Lack of knowledge of International pricing

As a developing nation with relatively low knowledge of western pricing standard we tend to run after new stuff and without knowing their actual average price, we buy into them very easily. All the new people coming to food and hospitality business have been taking the advantage of this. I was checking the Price for a Latte in George’s Cafe which can be compared to any Costa in the UK or Starbucks available worldwide. But to be frank with you, I’d pop in a Subway any morning and get a better latte than George Cafe for even 20% cheaper price. On their TripAdvisor page, Few Bangladeshis have reviewed them as well priced but one New Yorker Bangladeshi found it to be overpriced which doesn’t surprise me at all.

A snapshot from Tripadvisor.com on the review page for George's Cafe, Uttara

I would love to do the big mac price test for Bangladesh. But as there’s still no McDonalds available in Bangladesh, I’ll do the Hot zinger Burger Meal price index. In the US the price is 4.44$, in the UK it’s about 5.5$, in India it’s about 2.52$ and in Bangladesh, the price in KFCBD listed at 5.55$ but if you order it through FOODbangla.com they will charge you a whopping 8.8$ for the delivery(service charge may be added). My personal experience says, both Pizza hut and Nandos Prices are almost same in both BD and UK. If you consider the property renting and employee salaries, these International brand Franchise owners are pocketing the highest share of profits compared to any country in the world.

Thought 3: No Economies of scale. NO real “SALE’’

OK, this is the only time I’ll be using a term found in economics books. As Bangladesh is a very densely populated country, any good or product has a very amount of demand. Because of high demands, a 2,500 sqft. apartment can cost roughly about 380,000$ in the upmarket areas of Dhaka city. For the same price, you can get the same size villa with pool in Larnaka city, Cyprus which happens to be an EU country. If the production cost is low and demands are good, the prices should also be low because there is not much risk involved. During the high demand months of the year like in summer and Christmas, most of the countries tend to offer ‘’sale’’ and compensate low profit with a high amount of sell. Even I’ve found ‘sale’ on dates in the month of Ramadan but the scenario will be totally different in Bangladesh. Price hikes are very common during Eid eves and other festivals. There is no history of price reduction for high demand goods in the Bangladesh ever.

A Bread reduced to clear for having nearly expired date.

Reduced price for low shelf life products are also a far cay in Bangladesh. Whereas, a UK household has reported 30% savings over a year just buying reduced priced items from Grocery store a few days ago. Low priced store branded products like Tesco cola or Walmart crisps are a concept yet to be introduced in Bangladesh. I’ve bought a 25£ pant/trouser from a renowned brand called Marks & Spencer which is ‘’Made in Bangladesh’’ just for 3£ during a Sale which I bet none would even be able to buy even if they go to BongoBazar.

Though 4: High number of Middle Man channels and distributors

Bangladesh is not considered as a very important market by most of the giant companies like Apple or Hp. All the electronics Item you will be buying in Bangladesh has been imported by various distributors in legal or Illegal ways. during this process an iPhone will cost you the production cost + Apples profit + local distributor Import cost + local distributor profit( to run their store in Bashundhara city). Where as if there was an apple store you would just pay the apple price and would get the world class after sales support as well. There is numerous online store who are importing cheap items like selfie sticks, USB thumb drives, phone covers form China and selling at 200% - 300% profit margin. There is no way you can go to an international marketplace like Aliexpress yet and get it delivered to your doorstep at the manufacturer price. The more remote place you’ll be living, the more there will be added distributors and hence the more markup on the actual price.

Final Thought:

I had no intention of attacking any individual or business during this write-up. As a Bangladeshi, I’ve felt being ripped off in various cases during my visits to Bangladesh and I’ve tried to abstain from buying consumer products as less as possible. I have high hopes that the day is not far away when:

1. More and more business will target both rich and poor at the same price bracket.
2. The business will be fair, highly efficient in logistics and distribution.
3. Consumers will have rights to return the product and get refunds if they are not satisfied.
4. Postage deliveries will gain more popularity to keep the eCommerce business alive.

Tags: #Bangladesh #business #visit #pricecompare #economics #bangladeshibusiness #truthaboutbangladesh