Bangladesh is emerging as a dynamic, fast-growing market. This growth is driven by a large domestic consumer market, a rapidly expanding middle and affluent class, and an impressive digital adoption rate. The country is now home to more than 2,500 startups, with about 200 more being added each year, focusing on a wide range of industries, including financial technology (fintech), logistics and mobility, and e-commerce. And there remains a thriving group of traditional companies and conglomerates that have for well over a decade played an important role in domestic and global supply chains for textile, apparel, light manufacturing, and aquaculture.

Despite this noteworthy commercial activity, Bangladesh is largely untapped, even as the country continues to show signs that it can be a powerful marketplace. To offer some insight about these economic prospects, we have assessed why Bangladesh is a robust opportunity for domestic companies and a potential investment benefit for venture capitalists and private equity players as well as a possible strategic foothold for expansion by multinationals—alone or in partnerships with local companies.

To provide some clues for how to succeed in Bangladesh, we have analyzed the reasons behind the blossoming of a set of growing mid- and large-sized businesses that we call emerging champions. These are companies with outsized total shareholder returns (TSR) driven by profitable growth and a willingness to forego dividends to fuel further expansion.

Economic Growth and Landscape

With an average annual GDP growth of 6.4% between 2016 and 2021, Bangladesh has outpaced Asian peers, such as India, Indonesia, and Philippines, and has performed significantly better than the global average of 2.9%. The country’s GDP per capita was ~$2,800 in 2022—already higher than India’s. And at its current growth rate, Bangladesh is on track to become an upper-middle-income country (at least ~$4,000 GDP per capita) by 2031.

Bangladesh has proven resilient to global economic shocks. In 2020, Bangladesh GDP rose 3.4%, making it one of the few Asian economies to have grown during the COVID-19 pandemic. Similarly, during the 2007–2009 worldwide financial crisis, the country’s annualized growth rate was 5.5%, compared to a global average of 0.4%.

Buttressing Bangladesh’s prospects is its extremely active domestic consumer market, which accounts for nearly 70 percent of GDP and is rapidly expanding due to a growing middle and affluent class. By 2030, this group of well-to-do consumers could encompass more than 34 million Bangladeshis, or about 15% of the population.

Fueling the gains in consumer spending is a digital economy that is expanding rapidly. Between 2008 and now, Bangladeshi mobile cellular subscriptions jumped to upward of 180 million—making it the ninth largest mobile market globally—while population covered by internet services grew from 1% to about 90% of the country’s population. Not surprisingly, digital financial services are clocking daily transactions worth $200 million. More than 120 million people have already used services from these online applications. In addition, a new digital banking and transactions platform, Binimoy, backed by the Bangladeshi government, is expected to increase cashless transactions from about 15% to nearly 60% over the next 20 years, and provide nearly 90 percent of the population with access to bank accounts, credit, and other fintech services, putting yet more money into circulation in the economy.

This startup landscape has attracted over $880 million in funding over the last decade, with about 90% of these investments coming from outside of the country, and has created more than 1.5 million jobs. In that time, Bangladeshi mobile financial services startup bKash became the nation’s first unicorn when SoftBank acquired a 20% stake in November 2021. Surging toward unicorn status is a wave of startups, including ShopUp, a B2B commerce platform for small businesses, online grocer ChalDal, and ridesharing firm Pathao. And the government is promoting startups through a flagship $100 million venture capital fund called Startup Bangladesh.

The combination of startup activity and expanding domestic VC streams has piqued the interest of large international VCs. According to the United Nations Conference on Trade and Development, FDI inflows to Bangladesh primarily from multinationals rose by nearly 13% in 2021 to $2.9 billion and held at around that level in 2022, even as slowing GDP gains and recession worries were being felt across the globe.

Bangladesh, like many other emerging economies, is facing ongoing challenges that include limits on capital liquidity, foreign exchange risks, and inflationary pressures. But the government and Central Bank are taking measures to stabilize the situation and regulatory reforms are being considered to improve the business environment.

Four Attributes of Emerging Champions

Perhaps the best way to assess which business characteristics and culture are necessary to thrive in Bangladesh is to examine its emerging champions. This exercise is valuable for virtually any type of company seeking a strong presence in Bangladesh—whether a domestic startup or an established and expanding business, a VC, or a multinational setting up shop or forging a partnership.

The emerging champions that we identified have an annual revenue range of $300 million to $3 billion and boast an impressive ten-year average TSR of 16%, better than the S&P Global 1200 (15%), the Asia 50 Index (14%) and MSCI Emerging Markets (10%). They include multigenerational enterprises, tech startups, purely domestic companies, globally diversified businesses, single-sector specialists, and conglomerates.

Emerging champions have four crucial characteristics in common.

Optimism. First is their optimism about Bangladesh and the desire to thread themselves deeply into the fabric of the country’s economy and people. They are overall very bullish on its future and their ability to grow even if the economic volatility increases. Much of this resilience stems from relatively consistent success in recent years.

Their optimism has led emerging champions to combine the traditional focus on increasing TSR with strategies that support positive social results in the communities that they operate in. These approaches improve the companies’ reputations, which encourages customers to trust these outfits, and at the same time expand the potential customer base and organically grow the business. More than 50% of emerging champions in Bangladesh embed societal impact in their company’s vision or mission. Typical of this are bKash, which uses mobile technology to foster financial inclusion for more than 60 million underserved Bangladeshis, and BRAC Bank, which offers noncollateralized loans to more than 1 million small and midsized businesses.

Beyond social improvements, some emerging champions also want to advance the customer experience through personalization. Although deep digitization and data access are still relatively nascent in Bangladesh, a few ambitious efforts are pointing the way to a view of the not-too-distant future. For example, ShopUp enables small and medium-sized businesses to search for products through AI-based voice commands to provide services for business owners with varying levels of literacy. This offering has quadrupled ShopUp sales conversions.

Increased Labor Productivity. Second, Bangladeshi emerging champions have increased their labor productivity significantly. As recently as a decade ago, this was a significant challenge for Bangladeshi companies. In 2010, Bangladesh’s output per worker was just $8,000, about one-quarter that of the average among low- or middle-income countries (LMICs). Today, it stands at $12,000, a 56% increase in twelve years, compared to global average and LMIC improvements of 22% and 36%, respectively. Square Pharmaceuticals is emblematic of these types of productivity gains. The company has boosted productivity significantly through economies of scale driven by limiting the number of product offerings in order to simplify operations and adopting new automation and optimization programs. With these basic technological enhancements, Square’s new factories are three times as efficient as the older plants.

International Seal of Approval. Third, Bangladesh’s emerging champions generally have the international seal of approval. Since many of the most prominent companies in Bangladesh have already received modest capital injections from global banks or, in some cases, VCs, they have been vetted for their financial health and governance transparency. This has resulted in a group of Bangladeshi companies of international quality—already prepared to do business and form partnerships with companies around the globe.

One of the biggest advantages of international approval is the beneficial capital channels that it opens. This manifests in relatively low indebtedness and the ability to get funding at low rates—and opportunities for investors or MNC partners to help these companies develop strategic growth plans based on a disciplined used of debt. Listed companies in Bangladesh have leveraged debt funding at a far lower level than other nations. The median debt-to-capital ratio for the S&P 1200 stands at around 42%, compared to about 27% for Bangladeshi companies. This demonstrates the untapped capital Bangladeshi companies can leverage by raising more debt.

In terms of equity, Bangladeshi firms are using their positive global rankings to leverage equity capital from overseas investors and VCs. For example, bKash’s Softbank investment has been mirrored by capital influxes from Ant Group, the Bill & Melinda Gates Foundation, and the World Bank’s International Finance Corporation. And in some cases, positive standing among international companies have led to technology contributions for Bangladesh firms from overseas outfits. For instance, Summit Group recently completed construction of two heavy fuel oil plants in less than a year, both powered by engine technology from long-standing Finnish partner Wärtsilä.

Ecosystem Building. Fourth, support for ecosystem building. Like so many companies around the world, Bangladeshi companies have warmed to the idea that ecosystems—suppliers, customers, technology partners, bankers, among others—are necessary to continue fast-paced growth.

In Bangladesh, these ecosystems are emerging in varied ways. For instance, some companies are building vertically integrated end-to-end operations to eliminate potential disruptions from overreliance on traditional suppliers and distributors. A good example is PHP Family, a leading Bangladeshi steel conglomerate. The company has created an ecosystem of rolled iron suppliers and local welders, foundries, and distributors to handle everything from materials sourcing to producing finished products for customers. PHP gives credit and loans to ecosystem participants to ensure they can, without interruptions, provide PHP with sufficient inventory to meet demand.

The Path for Multinationals and Investors

These four dimensions of emerging champions provide a foundation for companies and investors eager to begin or fund ongoing operations in Bangladesh. Companies that have these attributes or have the potential to develop them are the best options for partnerships, new businesses or development money. Moreover, as we analyze Bangladesh’s prospects, we believe that multinational corporations (MNCs), asset management firms, and venture investors will play an increasingly significant role in the country’s economic and private sector growth and the emerging champions playbook should serve as an essential guide.

During the next few years, these trends involving outside companies and backers will likely take center stage:

• International private equity will become increasingly important to the Bangladesh business landscape, in part to meet Bangladeshi companies’ liquidity requirements but also to help emerging champions adopt global operational and governance practices. Private equity firms will also play a key role in linking emerging champions to international ecosystems.
• MNCs will be able to partner with local companies sufficiently sophisticated to undertake and invest in complex R&D efforts and capable of deep local consumer insights. These R&D programs can be a starting point for an MNC to test market products and services in partnership with emerging champions that fully understand the nuances of a homogenous population and have a strong commitment to ethical practices.
• We expect that with its current trajectory, augmented by regulatory reforms, Bangladesh will produce many more billion-dollar companies in the next 10 years. Hence, this is an opportune moment for MNCs and asset managers to test the market with the emerging champions.

Considering the growth leaps that Bangladesh and its private sector have enjoyed even during periods of stress and volatility in the last decade and a half, the country has bright prospects. With smart regulatory and economic support at home; positive geopolitical relationships; and funding, capability building, and strategic support from outside investors and MNCs, Bangladesh can continue to build on its gains.

Source: BCG

Prime Minister Sheikh Hasina today said her government has been turning Bangladesh Coast Guard (BCG) into a modern and three-dimensional force adding ultra-modern smart technologies, ships and helicopters to face the 21st century's challenges.

"None will lag behind. The coast guard will be made capable to face the 21st century's challenges with inclusion of modern technology based ships, helicopters and the force's communication system development," she said.

The premier said this while addressing a function marking 29th founding anniversary of the BCG and the BCG Day-2024 at the Coast Guard Headquarters in capital's Agargaon area.

She said her government is going to add high quality modern ship, maritime surveillance system-incorporated hovercraft and high speed boats to the coast guard fleet to make the force more modern and stronger.

At the same function, the premier also inaugurated Bangladesh Coast Guard Vsatnet Communication System and newly constructed six physical infrastructures at the BCG stations at Kutubdia, Maheshkhali, Mirsarai, Sandwip, Nidraskina and Shahpari Outpost.

The inclusion of the V-Satnet Communication System that will connect the coast guard with the Bangabandhu Satellite-1 will enhance the force's communication and operational abilities, Sheikh Hasina said.

She said, "We have already given approval to purchase two helicopters and formed an aviation wing for the coast guard to make it a three-dimensional force."

The premier said her government has also consented to buy 4 more OPVs, 2 maritime version helicopters for patrolling and ensuring safety and security at the deep sea area.

She stressed securing the vast maritime boarders saying nowadays 90 percent business are being done by the marine ways.

She said her government has also nodded to construct nine replacement ships for the force.

The head of the government said already 16 ships and 138 boats were inducted to the force's fleet to strengthen its capacity.

The prime minister said they will increase the existing manpower of the force to 15000 in phases with its modernisation to enhance capability to ensure security in the vast sea areas and protect its resources.

Sheikh Hasina said a dockyard is being built at Gazaria in Munshiganj aimed at constructing, repairing and maintaining the vessels and ships.

The prime minister said her government is working to enrich the tourism sector alongside taking initiative to turn Bangladesh into an attraction hub of both the east and west.

She highly praised the coast guard personnel for standing beside the innocent and helpless people in the coastal belts by warding off many criminal acts.

She asked the BCG personnel to perform duties and responsibilities as the friend of the people.

Sheikh Hasina reiterated her government's commitment to transform the country into developed, prosperous and smart Sonar Bangladesh by 2041.

"The coast guard will play a special role in building the smart Bangladesh," she hoped.

She said the coast guard had emerged as a force in 1994 in line with a bill brought in the Jatiya Sangsad by the then opposition party Awami League.

The prime minister said the AL government has always attached priorities to the development of the Bangladesh Coast Guard.

Coming to power for the first time in 1996, she said her government took massive initiative for the force's development providing required logistic supports including giving lands for building its zones, adding different types of vessels and making infrastructure development.

Then, after coming to power for the second time, she said various infrastructures including coastal crisis management centre, accommodation of the officers and sailors of bases, officers' mess, sailors' quarters and administrative buildings have been built at the coast guard stations and outposts in coastal and remote areas.

The prime minister said Father of the Nation Bangabandhu Sheikh Mujibur Rahman enacted "The Territorial Waters and Maritime Zones Act" in 1974 to establish the legal rights of the countrymen over the sea and marine resources.

She said the United Nations (UN) formulated such a law in 1982.

She also said her government has established rights on a vast maritime area after winning legal battles with neighbouring India and Myanmar maintaining friendly relations following the path of Bangabandhu.

The prime minister conferred Bangladesh Coast Guard Medals, Bangladesh Coast Guard (Service) Medals, President Coast Guard Medals and President Coast Guard (Service) Medals on its former and current personnel for their contribution and bravery.

Home Minister Asaduzzaman Khan, Public Security Division Secretary of the ministry Md Mustafizur Rahman and BCG Director General Rear Admiral Mir Ershad Ali were present at the function.

At the outset of the programme, a smartly turned out contingent of the Bangladesh Coast Guard also gave a state-salute and guard of honour to the prime minister. A short video documentary on Coast Guard Vsatnet System was screened. Later, the prime minister enjoyed a cultural programme.

Prime Minister Sheikh Hasina today said the government has been equipping BGB with state-of-the-art technology to ensure foolproof security at the frontiers and tackle transnational crimes.
 
"Smart digital surveillance and technical response system have been installed at borders aimed at ensuring foolproof security and facing inter-country terrorism," she said.

The premier was addressing as the chief guest a function marking the Border Guard Bangladesh (BGB) Day-2024 at Bir Uttam Anwar Hossain Parade Ground at BGB headquarters in the city.

Sheikh Hasina said her government has set up a rudder at Shahparir Dweep in Teknaf of Cox's Bazar to enhance surveillance across the Bangladesh border with Myanmar.

"With installation of state-of-the-art, modern and time-befitting technologies, the operational capacities of the BGB to be enhanced while their eagerness for work and skill will be increased manifolds," she said.

Sheikh Hasina continued that they adopted the 'Border Guard Bangladesh Vision-2041' to turn it into a world standard and modern force.

"One day, the BGB will be built as world-class border protection force. And the BGB will always work at the frontiers being a symbol of trust of the people," she said.

The Prime Minister said her government has been pursuing the Vision 2041 to build Bangladesh as a developed, prosperous and Smart Bangladesh by 2041 as envisioned by the Father of the Nation.

"We will build BGB as a smart force," she assured.

Sheikh Hasina said her government had enacted Border Guard Bangladesh Act, 2010 to make the force more stronger.

"We have built the BGB as the three-dimensional force. The force now can conduct operation in air, road and water ways. We purchased two helicopters for the BGB," she said.

Apart from these, the BGB has divided into five regions and five additional director generals have been entrusted with those, the premier said.

She continued that new units, sectors and regions have been set up in the paramilitary force aimed at bringing balance to its organisational capacity.

The premier said her government has appointed 35,517 personnel in the BGB in the last 15 years and planned to recruit 15,000 more by 2041.

She said they have first recruited women in the BGB in 2015 while 996 women are now working in the force.

The Prime Minister said training is a must for any disciplined force to enhance their professional capacities.

So, she said that the government has already set up a Border Guard Training Centre and College at Satkania in Chattogram while a complete training centre is being set up at Chuadanga district.

Bangladesh has so far built 1036 kilometers of frontier roads with India while 317-km with Myanmar, Sheikh Hasina said.
 
The Premier went on saying that they have built 62 BOPs which have brought 402-km out of 539 unprotected frontiers under surveillance while 242 more BOPs will also be installed.

She said that four battalions with India and Myanmar borders were installed while two in Sundarbans.

"The BGB personnel have now been able to smoothly protect the frontiers, check crimes and ensure safety and security of the lives and properties of the frontier people due to the measures taken by the government," Sheikh Hasina said.

She said BGB have always been standing by the people to protect their lives and properties and tackle anarchies like arson violence alongside protecting the frontiers.

"BGB has achieved confidence and trust of the people by standing beside them in their need," Sheikh Hasina said.

The premier appreciated BGB performance in discharging their duties with dedication and professionalism in ensuring security on the borders.

She also praised the BGB personnel for their role in checking smuggling in contraband goods and drugs, women and children, cross-border crimes and ensuring security of life and property of the frontier people.

Sheikh Hasina noted as well BGB role in maintaining security and safety at Rohingya camps in Cox's Bazar alongside with the armed forces, police and RAB.

The Prime Minister said they have given shelter over 10 lakh Rohingyas in Bangladesh on humanitarian grounds and are now holding discussion with Myanmar to settle the problem by sending back their nationals.

"We're not going to engage in any altercation with them rather to hold talks to settle down the problem," she said.

To this end, the premier said they have set an example for the rest of the world to solve the land boundary problem with India by exchanging enclaves with each other in a peaceful manner following the Land Boundary Agreement enacted by the Father of the Nation.

She also said they also solved the marine boundary problems with neighboring India and Myanmar following the law enacted by the Father of the Nation in 1974 to pave the way of establishing rights on the marine resources.

The Prime Minister has asked the BGB personnel again to maintain discipline and chain of command of the force.

"Maintaining chain of command is crucial for any disciplined force. Keep it in mind, never breach the discipline and maintain the chain of command," she said.

Against the backdrop of the Russia-Ukraine war and attack in Gaza, the premier reiterated her call to bring every inch of fallow lands under cultivation to grow more food as Bangladesh doesn't need to seek help from anyone.

"Use every inch of your land at home and office premises for cultivation. Everyone has to contribute to this end," she said.

Sheikh Hasina described the 25-26 February, 2009 incident in the paramilitary force as very unfortunate in which 74 people including 57 personnel of the force were killed.

"They who committed the incident have already brought to the justice. So, no such incident will take place (in the force in the days to come)," she said.

The premier recalled those who were killed at that gruesome incident and prayed for eternal peace of the departed souls and conveyed deep sympathy to their bereaved families.

The premier also unveiled a sculpture of Bangabandhu titled "Prerona" at the BGB headquarters in Pilkhana.

On her arrival at the BGB headquarters, Home Minister Asaduzzaman Khan, Senior Secretary of the Public Security Division Md. Mustafizur Rahman and Director General of the BGB Major General Mohammad Ashrafuzzaman Siddiqui received the premier.

At the outset of the programme, the Prime Minister reviewed the parade riding on an open jeep accompanied by the BGB DG and escorted by the parade commander.

She, later, witnessed the spectacular parade of the four contingents along with the national flag bearing party of the paramilitary force and took a state salute from the welcome dais.

The prime minister later distributed the BGB Medal, President BGB Medal, BGB Medal-Service, and President BGB Medal-Service among 72 selected BGB personnel for their operational and non-operational outstanding contribution.

She later joined a traditional interactive "darbar" of the BGB.

Prime Minister Sheikh Hasina today asked the police force to serve the people and play an active role in containing militancy, terrorism and corruption.

"I ask the police force to serve the countrymen. The main motto of the police is to prevent bad people and to protect good ones. We always want the police to earn confidence and trust of the people through their works," she said.

The premier made the remarks while inaugurating the Police Week-2024 in the capital's Rajarbagh Police Lines this morning.

She reminded the police force that people first look for shelter to the police if they fall into any danger.

"So, we expect police to work with profound patriotism and they will have more affection for the people," she said.

The prime minister reiterated her commitment to continue drive against the militancy, terrorism, drug abuse and corruption.

"Police force will have to play active role in pursuing the government policy," she said.

She also said it is mandatory to maintain peace and stability for development and prosperity of the country.

The prime minister said the people of Bangladesh will not live by begging to any country rather to move around the globe keeping their heads high with due dignity.

"So, we have to increase our food production and make our economy more developed," she said, reiterating her call to the countrymen to grow more food by cultivating every inch of land.

The premier said they are committed to transforming Bangladesh into a developed, prosperous and smart one by 2041.

"The police force will have to play a special role in the journey of Bangladesh towards prosperity," she said.

Sheikh Hasina said her government has been working to make police a smart, time befitting force equipped with modern technologies due to the new dimension of crimes.

Prior to opening the police week, the prime minister reviewed the parade of the Bangladesh Police riding on an open jeep and took the salute.

Different police contingents staged a spectacular parade to mark the police week.

The theme of this year's Police Week is 'Smart police, smart country, Bangladesh is of peace and progress'.

The premier awarded thirty-five policemen Bangladesh Police Medal (BPM-bravery) and 60 others President Police Medal (PPM-bravery) in recognition of their courageous work.

In addition, 95 policemen got BPM service medal while 210 PPM service medal as well.

Earlier on her arrival at the venue, the prime minister was received by Home Minister Asaduzzaman Khan, Public Security Division Senior Secretary Md. Mustafizur Rahman and Inspector General of Police (IGP) Chowdhury Abdullah Al-Mamun. 

Cabinet members, parliament members and senior government officials were present. 

At the outset of the programme, the national anthem was played.

(BSS)