Are Backpack and Air Bringr still in the game?

Habiba Husna (pseudonym), a former lecturer at Daffodil International University, first discovered Backpack in 2018. Until 2019, she used the platform regularly to buy products from Amazon in the United States. 

"It was a very convenient platform, especially because I lived in Rajshahi back then and had no other way of buying products from Amazon," she said. 

Backpack is a peer-to-peer marketplace, based on cross-border shipping where international travellers make use of their unused luggage space to deliver local customers their desired products. Launched in 2014, it emerged as a popular platform for locals who wished to buy international products that weren't available in the country. 

The platform grew equally popular with frequent travellers who wanted to earn some money through their trips. A similar platform named Air Bringr also emerged in 2018 and earned wide reliability among the users. 

Husna, however, stopped using Backpack during the Covid-19 pandemic. By the time the lockdown was over, everything sort of changed. 

"Most people, including me and my friends, no longer found the need to order through Backpack. Most of the items that we looked for, especially gadgets like Kindle, laptop sleeves, kindle covers etc, were readily available on local platforms like Facebook Marketplace, or elsewhere," she said. 

During the pandemic, as the international borders were closed, both these platforms went through hardship and they had to make some temporary adjustments to their business models. Backpack started doing cargo shipping while Air Bringr quickly reinvented itself with a new venture named FreshBringr, which delivered necessary commodities like medicines and groceries.

But now that the pandemic is over and international flights are taking off in full swing, both companies are back to their original model. But, it seems like they have a new problem to work with - the rise of Facebook marketplace where vendors of different ilk offer to bring products to customers using various modalities. 

The Business Standard spoke to both platforms and their users, and some buyers and sellers from Facebook Marketplace, to understand the shift in the business model. 

Facebook marketplace and the changing dynamics

Nabiha Kabir, a student of North South University, wanted to buy an iPhone 14 last year. She was evaluating some local shops at Bashundhara City Shopping Mall, but then she found a seller on Facebook Marketplace who enlisted three iPhones from his seller profile.

The seller, Imtiaz Miah, is an immigrant worker based in Dubai. When he visited Bangladesh last year for a month, he brought three iPhones with him, which he wanted to sell through the Facebook marketplace.

"I had my doubts before purchasing the phone from the marketplace. The seller's profile seemed somewhat dubious at first glance. However, the price was quite tempting. The lowest price I found for a phone with my desired specifications at a shop was Tk1,38,000, whereas this seller was offering it for Tk1,30,000," said Nabiha.

The seller allowed Nabiha to inspect the phone before making the purchase. Nabiha, along with her brother, examined the phone and then made the purchase.

It was in 2016 when Facebook announced an extension to its business model named Facebook Marketplace. This feature allows you to discover, buy and sell items to the people in your area/community. The platform is similar to eBay but with an added touch of 'Social-ness'. You get to chat with the other party over Facebook Messenger and have access to their Facebook profile.

Apart from the marketplace, there are millions of Buy and Sell groups on Facebook that also serve the same purpose. Many of these groups/pages bring your desired international products too.

"If I need any makeup item that is not available in Bangladesh, I resort to the 'Kangaroo Town' group on Facebook. They bring authentic makeup items from Australia. It takes around 40 to 60 days to get my hands on the products, but the wait is always worth it," said Rafina Tabassum, a student at Dhaka University.

"Only a decade ago, I eagerly awaited visits from relatives living abroad, hoping they would bring me the items I longed for. Technology has truly simplified everything."

Kangaroo Town exclusively imports cosmetic items to the country. If you're in search of gadgets or other products, you'll need to explore different groups or pages. 

However, with Backpack or Air Bringr, you have the flexibility to purchase a wide range of products of your preference from one platform. This versatility stands as one of the key advantages offered by these platforms.

Which platform gives the best price?

Excluding sales, discounts or other promotional offers, individual sellers like Imtiaz, who occasionally sell one or two items with a limited profit margin, likely provide the most competitive prices. However, their availability is sporadic, and concerns regarding security and trustworthiness can be significant factors in this context.

Conversely, when it comes to specific products, those Facebook groups/pages offer a wise alternative. They are often more dependable compared to the general marketplace and you have the opportunity to gain valuable insights about the products within these groups. The sense of community within these groups provides an additional advantage in this regard.

But, the wait time and price is tricky.

"Importing products into the country is a complex and time-consuming procedure. This encompasses challenges ranging from initiating a Letter of Credit (LC) to coordinating with a reliable overseas contact for shipping. Moreover, each step in the process, including product packaging, transportation to the airport, air shipping and customs clearance, demands financial resources," said Rafin Afroz Khan Oishee, owner of 'Get The Glam BD', a Facebook-based cosmetic group.

Rafin shares that because of all these added amounts, a product worth Tk1,000 becomes around Tk1,900 to Tk2,000 for retail.

On the other hand, cross-border shipping platforms do not go through these added layers. So they can offer a better price. Moreover, their price break up is very transparent. You get to know the exact amount you are paying for the product, the platform service and the traveller.

Is the market overlapping?

Upon asking this question, executives of both the platforms answered that they do not view Facebook-based business as a threat because the structure of their business model and the marketplace are entirely different. 

Also, the bucket sizes or the purchasing capacity of the customers are different.

"At Air Bringr, the bucket size of a single customer is $110 to $150 and by the number of recurring customers and travellers we get, we can say we are a very reliable platform. Reliability is a big concern in the marketplace. At the end of the day, there is a key difference between a well-structured business company and a business that is operated from home by individuals," opined Ashiq Noon, founder and CEO of AirBringr.

A similar answer was received from Saddam Hossain, manager of Backpack. 

"Through our platform, we connect a buyer with a traveller, and they maintain regular communication. This reassures the customers, and they tend to retain us," Saddam said.

While he did discuss retaining existing customers, the question of how many new customers they acquire regularly remains unclear. Moreover, the platform has turned off its comment section on social media, which evokes more questions.

Ashik believes that the rise of the marketplace has been nothing short of a blessing to his platform as it is activating and educating the market.

Ashik added, "At the beginning, one of our significant challenges was educating our customers and helping them grasp the intricacies of the cross-shipping process. We encountered some negative reactions, with customers becoming upset even over minor delays in product arrivals. However, over time, we've witnessed a notable improvement in their understanding and patience."

Moreover, Rafin shares that the Facebook marketplace has become overly saturated by groups and pages that sell similar products. Diversity in products is scarce there.

"Sometimes I feel like there are more sellers than buyers," said Rafin.

The current scene of cross-border e-commerce

According to Facts and Factors, the global cross-border B2C e-commerce market was valued at USD 785 billion in 2021 and is expected to expand to USD 7,938.01 billion by 2030 with a compound annual growth rate (CAGR) of 26.19%.

The value of the global domestic equity market increased from USD 65.04 trillion in 2013 to USD 98.5 trillion in 2022. As of July 2023, the total market capitalisation of domestic companies listed on stock exchanges worldwide was recorded as USD 112 trillion. 

"The domestic market has reached its cap. Cross-border e-commerce has to be the next big thing in the market. It would have already crossed the domestic market if cross-border shipping had a better structure," said Ashik Noon, founder and CEO of AirBringr.

In the realm of cross-border shipping, giants like FedEx and DHL dominate the field. However, Ashik believes that they continue to operate within outdated structures and policies.

"In my opinion, these platforms aren't particularly inclined to support e-commerce. We've held numerous meetings with them in an attempt to collaborate but without success. While shipping bulk products through them may be cost-effective, the charges for small quantity retail products are somewhat prohibitive. With Air Bringr, we are creating a platform that eliminates the need for these intermediary courier services," he further explained.