Industry insiders said that the Made-in-Bangladesh software products have become brand names locally and globally
After the Covid-19 outbreak in March last year, software companies in Bangladesh witnessed a shrink in revenues, losing around $1.2-1.3 billion, according to industry insiders.
Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services (BASIS), told Dhaka Tribune that business was not possible in the initial months of the pandemic and scores of international work orders were suspended.
But as the world adapts to the new normal, business has picked up again. And now, the local software industry is rekindling its ambition to capture global markets.
Accelerating Asia, an international venture capital firm, announced in its annual report that four Bangladeshi startups — Amar Lab, DoctorKoi, HandyMama and SWAP — were among the 11 high-growth startups from Southeast Asia and the South Asia region.
Business analyst of DataSoft Muntasir Rahman said: "We could not do anything last year. But this year we are starting to hold our positions in the international market and getting orders. But we are always afraid of order cancellations by the foreign buyers."
Another IT firm, Reve Systems, marketed its first antivirus software in 2017.
Now it is exporting its antivirus to India, and plans to reach Nepal, Tanzania, Kenya, Ukraine, Belarus and Moldova.
Other local companies like Tiger IT have developed a voter registration system for Nepal.
Pathao, a start-up, launched ride-sharing services in the Nepalese capital of Kathmandu.
Moreover, the government agencies are the major client of the local software followed by public and private universities.
Industry insiders said that the Made-in-Bangladesh software products have become brand names locally and globally, enabling local companies to open liaison offices in different countries, including the US and UK.
More than 25-30 Bangladeshi companies, including REVE Systems, Tiger IT, DataSoft, Dohatec, eGeneration, and Southtech have already set up offices in India, Nepal, Bhutan, Malaysia, Japan, the UK, the US and various African countries, according to data by BASIS.
These firms export to around 40 countries across the globe, making Bangladesh a major source of quality software products.
According to the ICT Industry White Paper of Bangladesh, 47% of the local market is shared by software development firms, 34% by multi functional and ITES (Information Technology Enabled Services) companies, while BPO (Business Process Outsourcing) and e-commerce firms hold the remaining 19% of the market share.
The country has nearly 3,000 IT and software firms catering to an estimated market size of Tk9,000 crore per annum, according to BASIS leaders.
Of them, 1,200 companies who are members of BASIS, cater to around two-thirds of the market.
Around 250-300 local top software companies are trying their best to grab the entire domestic market and to also put their footprints in foreign markets, like the US, Japan, India etc.
The government has already declared this sector as an emergency sector and exempted it from value-added tax (VAT).
“The government has revised its target of $5 billion export from IT services and software and also to create two million jobs in the sector by 2025. It was supposed to be attained by 2021. But the pandemic put the plan off course,” said Kabir.
No aid package for software industry
"We could not take a loan last year due to various banking inconsistencies. However, we managed to take a Tk1 crore loan from the banks on our own initiative, but only for those who were members of BASIS," Kabir said.
BASIS had sought, but did not get, over Tk650 crore in stimulus loans from the government last year for its 1,400 member companies. The stimulus would have been used to pay salaries and office rent, according to a BASIS business continuity plan.
"We need a credit guarantee to take loans from banks. Otherwise, we will be deprived," said the BASIS president.
The local market is now in tatters due to the economic fallout of the pandemic, with 70% of the market position lost by the companies, according to BASIS.
Sector people say that they need government support to return to their prior positions. Otherwise, some companies may shut down.
Before the pandemic, however, the domestic market was set for a robust growth due to rapid expansion of ICT-based citizen services and enhanced awareness for ICT-led productivity and efficiency growth in the private sector.
Monjurul Alam Mamun, CEO and managing director of Aplectrum Solutions, said that their business is now closed in the local market, and they are struggling to survive amid the pandemic.
The situation may further deteriorate if the pandemic continues. Companies will not be able to pay their employees for long, he added.