How to enter the Bangladeshi market

Market entry models for exporting goods and services

Choosing an appropriate market entry model is essential for businesses looking to export to Bangladesh. Any choice should be informed by factors such as the overarching business strategy, target sector, business size and maturity. It is important to note that market entry models frequently evolve over time.

A. Direct exporting

In direct exporting, businesses sell directly to a Bangladeshi customer from Australia. Exporting directly to Bangladesh requires a significant level of involvement in the export process, including market research, marketing, distribution, sales, product registration and approval, import-export licensing and receivables.

Direct exporting has some advantages, including:

• Greater control of commercial processes, including sales
• Better margins, as intermediaries are avoided
• More direct customer relationships.

While there are benefits, direct exporting can ultimately involve higher establishment costs. It may be necessary to employ dedicated in-house staff and other resources to manage the complexities of exporting and sales in Bangladesh. Businesses that use this model may need to consider ways to offset these costs, including employing an agent or distributor to handle local product registrations, while maintaining control over other aspects of the business such as marketing and supply chain management.

A direct export approach should be supported by references, brochures, catalogues and other product and business information. It also requires businesses to engage with customers regularly to build awareness and understanding of the products they are selling on an exporter’s behalf. In return, a retailer’s understanding of the Bangladesh market can help with product development, pricing and marketing. Selling directly to local retailers can generally cut commissions, reduce travel costs and create an effective conduit to market.

B. Agents and distributors 

Many Australian firms doing business internationally rely on agents or distributors. The roles of agents and distributors differ, and they can vary across industries. It is therefore critical that roles and responsibilities are clearly defined early in any agreement.

Agents: Agents act as representatives of suppliers and do not take ownership of the products they sell. They are usually paid on a commission basis, which provides an incentive for them to drive sales. Being based in Bangladesh, they will often represent several complementary products or services. They can be retained exclusively as the sole agent for a company’s goods or services or as one of several agents for the exporter.

Distributors: Unlike agents, distributors buy goods from exporters and resell them to local retailers or directly to consumers. In some cases, a distributor may sell to other wholesalers who then on-sell to retailers or consumers. Distributors may carry complementary and competing lines and usually offer after-sales service. They earn money by adding margins to product prices. Distributor margins are generally higher than agent fees because distributors have costs associated with carrying inventory, marketing and extending credit for customers.

Choosing an agent or distributor: This method of market entry is particularly suitable to ascertain local knowledge for doing business. Whether a business decides to use an agent or distributor, building a close working relationship is essential. Due diligence when selecting an agent or distributor is important and companies should ask for trade references and seek a credit check through a professional agency. It is best to meet any potential agents or distributors in Bangladesh. This will give them an opportunity to demonstrate knowledge of the market and to build a business relationship.

C. Online Sales

Although Bangladesh has low rates of internet usage relative to other Southeast and South Asian markets, its increasingly young and tech-savvy middle class is driving demand for e-commerce and new consumer products. The online sales market is projected to grow at a rate of 30 per cent each year to 2030. Bangladesh is forecast to become the world’s ninth largest consumer market by 2030. In 2020, the Government of Bangladesh began allowing 100 per cent foreignowned e-commerce businesses to operate. However, local consumers continue to face obstacles to purchasing imported products online including foreign payment restrictions, shipping costs, customs duties and uncertain delivery times.

Although digital payment systems are expanding in Bangladesh, the country’s online payment system lacks well-developed consumer privacy policies and incurs a high prevalence of fraud. Foreign investors have expressed concern about the security and reliability of the system. The majority of consumers prefer a cash-on-delivery model to pay for products and services purchased online.

Accessing digital consumers: In 2024, just over half of Bangladeshis had access to the internet. The vast majority of users accessed the internet via mobile devices. Internet access in urban areas of Bangladesh is growing at nearly 12 per cent per year, exceeding the regional average by three percentage points.

Business-to-consumer shopping platforms are popular in urban areas. Traffic congestion and poor road conditions have increased demand for home delivery services. Computers, apparel and consumer electronics lead e-commerce spending in Bangladesh (Figure 2). Sales of consumer products, particularly in the health and beauty categories, are growing quickly and represent a growing opportunity for Australian businesses.

Figure 2: E-commerce spending on consumer goods (2025), AUD million

Search engines: Search engines are often the first step to online product discovery. Google dominates in Bangladesh, followed by Bing, DuckDuckGo and Yahoo. Artificial intelligence (AI) models are also increasingly driving search traffic. ChatGPT and Google’s AI search overview are the most popular AI search tools in Bangladesh.

Online sellers and marketplaces: Popular food and grocery delivery sites include FoodPanda and Pathao Food. Facebook-based e-commerce platforms such as Shoprbd and ShoptoBd allow Bangladeshis to purchase consumer products from foreign shopping sites. While the e-commerce market is fragmented in Bangladesh, popular websites include Daraz (operated by the Alibaba Group), Chaldal and Bikroy.

Social media: Facebook and TikTok are among the most popular platforms with 64 million and 56 million users respectively. User bases on Instagram and TikTok are growing rapidly. YouTube is also increasingly popular among Bangladeshis, particularly for news.

Investment environment

Over the past few decades, Bangladesh has taken steps to attract foreign investment. Yet, underdeveloped infrastructure, bureaucratic delays and corruption continue to pose challenges for offshore investors. Although Bangladesh’s economy is expected to continue growing at over four per cent annually through to 2028, foreign direct investment as a percent of GDP has fallen from 1.7 per cent in 2013 to 0.3 per cent in 2024. However, data from 2025 shows an increase in inward investment of 16.7 per cent, signalling growing confidence among foreign investors.

The Government of Bangladesh has proposed an ambitious reform agenda that signals some optimism about prospective improvements to the investment environment. These include empowering the Bangladesh Investment Development Authority (BIDA) to provide enhanced services to foreign investors, modernising visa and work permit application procedures and improving investor protection laws.

Foreign investment in Bangladesh is managed by BIDA. BIDA has identified several priority sectors for foreign investment including textiles, pharmaceuticals, medical devices, agrifood, renewable energy and critical technologies. See Section 1.2 for more information on specific opportunities for Australian businesses.

There are a range of incentives available to foreign businesses operating in Bangladesh

• Tax exemptions: In selected sectors and zones, foreign investments may be up to 100% exempt from income, dividend, capital gains and royalties taxes for up to the first 10 years of business operations, subject to approval.
• Export-oriented incentives: Investments in export-driven businesses are entitled to additional benefits including duty-free imports of capital machinery and materials, preferential access to bonded warehouses for import materials, cash incentives and export subsidies, as well as duty-free and quota-free access to major international markets, including the EU, the UK, Canada and Australia until 2029.
• Sector-specific incentives: The Government of Bangladesh offers additional incentives including extended tax and duty exemptions and preferential export subsidies for foreign investment in the following sectors:
  • Power and energy 
  • Agrifoods
  • Manufacturing and light engineering
  • Chemicals and pharmaceuticals
  • Logistics.

More information on these incentives can be found on the website of the Bangladesh Investment Development Authority.

Investment rules and regulations

Bangladesh is open to foreign investment in most sectors, although investing in some sectors requires government permission. Foreign investors can establish, own and operate most types of businesses, although additional permissions may be required. The government controls four ‘reserved sectors’ - defence, forestry, nuclear energy and currency printing. Investors can consult the BIDA for information on investment permissions in other sectors.

Bangladesh also offers a number of Special Economic Zones (SEZs), Export Processing Zones (EPZs) and high-tech parks with incentives for foreign investors. Businesses operating in SEZs and EPZs are entitled to a range of tax incentives as well as easy access to logistics networks and government services. EPZs in Bangladesh are responsible for 15-20 per cent of the country’s exports. See Section 5.1 for further information on SEZs and EPZs.

In addition to offering incentives, the Government’s reform agenda includes an expansion of services to streamline foreign investment. In 2026, the BIDA launched an online platform, BanglaBiz, linking together information from investment promotion agencies in a centralised application platform to reduce application times for new businesses. Plans are in place to continue expanding this service.

Market entry models for investing

Choosing an appropriate market entry model is essential for businesses looking to invest in Bangladesh. A business’ size, sector and growth strategy will help determine which market entry model fits best. Investment models frequently evolve over time as businesses enter and expand in a market. Seek professional advice on the best structure for your business.

A. Representative office

Opening a representative office (RO) can be a useful and economical first step to explore business opportunities in Bangladesh. ROs are not incorporated as separate entities and operate as an extension of the parent company. ROs can help to promote the products or services of the parent company in a new geography and access the business environment without establishing permanent operations. ROs typically serve as communications channels for foreign companies to connect with local businesses or promote their products and services.

ROs can operate for a limited, renewable term of two to three years, but are prohibited from engaging in revenue-generating activities. General rules and regulations exist for foreign-owned ROs in Bangladesh, but their scope of business activities, location and employee profile require approval to be granted by the BIDA.

B. Branch office

Establishing a branch office (BO) in Bangladesh allows a company to engage in some commercial activities. BOs are not incorporated as separate entities and operate as an extension of the parent company. Branch offices are not permitted to engage in manufacturing unless the manufacturing activities are subcontracted to a Bangladeshi manufacturing company. BOs are permitted to operate for a limited, renewable term of two to three years.

C. Private company

Limited liability companies (LLCs), known locally as incorporated private limited companies, allow up to 100 per cent foreign ownership. Foreign investors will often establish an LLC as a subsidiary company, maintaining the parent company as its shareholder. Foreign-owned companies can conduct commercial activities in most industries in Bangladesh, offering the greatest flexibility for investors.

D. Public company

Forming joint ventures with Bangladeshi partners is a common way for businesses to enter the market. Joint ventures can allow foreign investors to benefit from local market knowledge, expertise and connections. Partnering with Bangladeshis also permits foreign investors to operate in industries where 100% foreign investment restrictions apply such as freight forwarding and manpower. Joint ventures are registered as incorporated companies in Bangladesh.

E. Public-private partnership (PPP)

A public-private partnership (PPP) is a contractual arrangement between the government and the private sector. PPPs can be solicited by the GOB or proposed by a private sector entity. Under its Vision 2041 policy, the GOB has identified PPPs as a central component of the country’s development. PPPs are overseen by the Public Private Partnership Authority.

Projects solicited by the government generally involve a multistage bidding process, although some may receive National Priority Project status, allowing the government to approach private partners directly. Unsolicited PPP proposals must show that the project is necessary for socioeconomic development in Bangladesh, that the company has the expertise to complete the project and that the proposal has not been drafted in response to any formal government request.

Australian businesses should be aware that PPPs in Bangladesh face significant challenges. The PPP Authority lacks sufficient capacity to oversee projects and does not have a defined strategy guiding project selection. Most projects undertaken by the PPP Authority since 2015 remain incomplete.

Guide to establishing a business in Bangladesh

Establishing a representative or branch office in Bangladesh

Incorporating a company in Bangladesh

Success in Bangladesh requires businesses to tailor their product or service to the market. This should be based on detailed analysis of consumer trends, price consciousness, branding, marketing, advertising and payment methods.

Bangladesh’s per capita disposable income is growing but still trails most regional peers (Figure 3). The country’s growing middle class is expected to raise household incomes further. While Bangladesh’s young, educated and tech-literate population is expected to drive growth, particularly in the e-commerce market.

Understanding the characteristics, aspirations and spending habits of Bangladeshi consumers is crucial for businesses looking to enter the domestic market. Businesses should adjust their value propositions to capitalise on emerging consumer trends. Bangladeshi consumers tend to shop more often around holidays and festivals, offering opportunities for businesses to launch targeted campaigns or seasonal promotions around key dates.

Consumer trends in 2025

Figure 3: Median disposable income per household (2020-2030f), AUD, current prices

Figure 4: Number of households by annual income level

Price consciousness

At AUD 6,969 (BDT 571,230) Bangladesh’s median household income is among the lowest in South Asia. Most consumers are extremely price conscious, although middle- and upper-middle class consumers are beginning to pay more attention to branding and the overall consumer experience. Bangladeshi consumers are generally very loyal to known brands. While the market for premium products is growing, consumers tend to be financially conservative and are wary of debt.

Branding

Branding is as critical in Bangladesh, as in any market, and companies benefit from researching and understanding consumers’ preferences. Although many Bangladeshi consumers are more comfortable with familiar local brands, the demand for premium and luxury foreign brands is growing. Australian products have a favourable reputation in Bangladesh. Businesses looking to enter the market can consult Austrade’s Nation Brand toolkit for a range of free branding assets. Businesses may wish to explore local language branding, particularly if operating beyond the capital, Dhaka.

Marketing

Trade marketing to distributors and retailers can be an effective way for businesses to promote new products or services in Bangladesh. A trade show can be a useful starting point. It is an effective way to reach new clients, gain insights into the competitive landscape and network with other businesses. Bangladesh hosts over 15 major trade shows annually focused on key markets such as fabric and textiles, agrifood, medical devices and equipment, packaging and power generation. Trade shows are organised by government bodies, industry associations and private organisers.

Sales promotions can also help establish new brands, especially among value conscious consumers. Offering special discounts can be an effective way to increase sales and gain customer loyalty, particularly in sectors crowded with well-known local brands. Many educated and urban consumers are comfortable with English. However, marketing and promotional efforts, whether at trade shows, in sales promotions or online, should also appear in Bengali to ensure accessibility for consumers.

Advertising and media

Bangladesh has many television and radio stations used by advertisers, although the importance of social media marketing is rapidly growing. Digital advertising is expected to account for 77 per cent of ad spend by 2029. Social media penetration rates exceed 60 per cent in Bangladesh and many consumers prefer to shop via social media platforms. Facebook, TikTok and YouTube have the highest potential ad reach, whilst LinkedIn, Instagram and TikTok offer the greatest potential growth (Figure 5).

Bangladesh’s Ministry of Information has legislated against certain advertising practices such as the publication of indecent ads or ads which make false claims to consumers. Making false claims is punishable by up to one year in prison and/or a fine up to BDT 200,000 (AUD 2,440). In general, advertising regulation in Bangladesh is fragmented and no unifying regulatory framework exists.

Figure 5: Digital advertising audiences in Bangladesh (2025)

Digital Payments

By traditional measures, financial inclusion in Bangladesh is low (Figure 6). However, the establishment of Mobile Financial Services (MFS) like bKash has significantly increased the popularity and accessibility of digital payments. In 2026 there were 239 million MFS accounts registered in a country of 173.5 million people. The government is actively supporting the transition away from cash through the “Cashless Bangladesh” campaign. Since 2025, all trade licences in Bangladesh require merchants to offer the country’s Bangla QR payments system. The centralised network is intended to improve transaction clearing times and financial inclusion. Additionally, the National Board of Revenue imposes an income tax penalty of 2.5 per cent for operators who do not offer a cashless payment method.

Australian businesses should be aware of these requirements and ensure they integrate digital payments into their operations. Businesses entering the market can also leverage the shift toward digital payments to offer streamlined transaction services.

Figure 6: Financial inclusion metrics (2025), %

A well-considered market entry strategy should take a systematic approach that supports long-term success. This section summarises the factors businesses should consider when formulating an approach to the Bangladesh market into a series of key questions.

Calibrating Ambition

• What is your company’s aspiration for the market?
• What are the challenges and risks you will need to mitigate?

Consumers

• What is the current or potential demand for your product or service in Bangladesh?
• Who are the primary customers / consumers for your product or service in the market?
• How will you tailor your product or service to local preferences?

Competitors

• Who are your competitors in the market and what is their offering?
• How does your product or service compare to competitors on price?

Sales, Brand and Marketing

• What is your unique value proposition for the market?
• What is the ideal mix of marketing and sales channels to reach your target customers?
• Is your marketing strategy aligned with your identified consumer base and value proposition?

Mode of Entry

• What is the right market entry model for your business?
• What are the specific geographies you should target?

Delivery Partners

• Does your team have the right mix of skills and expertise to support your market entry?
• What partnerships will contribute to your business’ success in the market?
• What external advice do you need to commission?

Operating Model

• What changes do you need to make to your business across areas such as operations, HR, finance and IT?

Asialink Business provides advisory services and capability training programs to help organisations understand and access opportunities in Asian markets. For questions about any aspect of a Bangladesh market entry strategy, please contact us. Austrade’s Bangladesh office also provides services and support to Australian businesses with an interest in Bangladesh (details can be found in Section 5.2).

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