This report was created by mobiledokan.com market analysts who have been active in the mobile phone industry of Bangladesh for over 10 years.
Mobile phone industry is one of the few sectors of Bangladesh which has been able to show constant growth and attract a lot of foreign investment in the country. A lot of hard working business owners, tech enthusiasts, fans and consumers of Bangladesh are to be thanked for the flourishing of the industry. But the government policies since the last few years are leading the industry into ruin. In this report, we are going to show you how.
A very unfair Import Tax Policy for mobile phones
Mobile phone brands and their authorized distributors in the country need to pay 58% import tax if they import their products from foreign countries [1,2]. This initiative was taken by the Ministry of Finance as an attempt to force foreign brands to establish phone assembly factories in Bangladesh. The idea was to create more jobs and skilled workers in the sector and to boost the local economy. But the question is why a developing country like Bangladesh will make such an unfair and forceful law for the foreign brands when we don’t see a policy like this in first world countries in Europe, America or even in developed Asian countries? This kind of law is definitely extremely inconvenient and unattractive to the brands.
The consequence of the Import Tax Policy
Brands like Apple did not open any phone assembly factory in Bangladesh, which is very obvious because the infrastructure of the country isn’t good enough to assemble prestigious Apple iPhones that aim to maintain a very high standard of quality. So, the authorized distributors of Apple in the country are selling iPhones at an unbelievably high price. Let us show you how it looks like:
Apple iPhone 15 Pro Max prices around the world
[Prices are collected from official Apple stores worldwide and Apple authorized dealers in Bangladesh as of 18.01.2024]
| Country | Local Price | Price in ৳BDT | Price in $USD |
| USA | $1,199 | ৳131,373 | $1,199 |
| UAE | AED 5099 | ৳152,113 | $1,388 |
| China | ¥9,999 | ৳153,932 | $1,404 |
| Singapore | S$2,017.50 | ৳164,585 | $1,502 |
| UK | £1,199 | ৳166,769 | $1,521 |
| Germany | €1,449 | ৳173,002 | $1,578 |
| India | ₹159,900 | ৳210,728 | $1,923 |
| Bangladesh | ৳239,999+VAT | ৳239,999+VAT | $2191+VAT |
As you can see from the above table, the US price is the lowest and that’s okay because Apple is an American company. Most countries are between BDT 150,000-160,000. Then the European prices (UK/Germany) are slightly higher than most other countries and this is also because of their tax policy [3a]. But it’s not too high and is tolerable. India’s price is relatively high because of a similar tax policy as Bangladesh [3b], but their price includes all taxes and still fairly lower than Bangladesh. Now come to Bangladesh and the price is BDT 239,000, the highest. And it doesn’t end there. There is also up to 7.5% VAT (Value Added Tax) [4] on top of that. That adds another BDT 17,925. So, the total price goes up to BDT 256,925 ($2,345).
How did it backfire?
(A) The Rise of Unofficial Phones
Since December 2018, every passenger can bring eight handsets in their luggage and two handsets can be brought fully duty-free into Bangladesh [5]. This is a whole different tax policy than the formal import of official handsets by brands or their authorized dealers. Local retail shops have been importing phones this way to sell them close to the international pricing. They can’t provide any official brand warranty this way, but they provide their own seller and service warranty, which works well with the buyers. But many of these sellers aren’t always very fair either and often push the price higher, especially for the latest demanding gadgets. But they do have some inconvenience and extra costs to bring and sell products this way and their prices are still much lower than the official prices. So, they are not the first ones to blame.
The more important point is that, as a result, official products started to lose business. Especially for those who do not have any phone assembly factory in Bangladesh and sell products via their authorized dealers only such as Apple, OnePlus and so on.
(B) Brands like Samsung go all-in
Samsung is still the number one smartphone selling brand of Bangladesh [6] and in many other parts of the world. They are one of the first to establish a phone assembly factory in Bangladesh. However, apparently, they also didn’t like the forceful government policies, so their phone pricing is higher in Bangladesh than any other part of the world. Let us give you the examples of two of the most popular Samsung phone pricing:
[Prices are collected from official Samsung stores worldwide as of 18.01.2024]
Model Name: Samsung Galaxy A34 (6/128 GB)
| Country | Local Price | Price in ৳BDT | Price in $USD |
| USA | $349.99 | ৳38,413 | $349.99 |
| South Korea | ₩439,400 | ৳36,038 | $328 |
| China | Not available | – | – |
| UK | £349 | ৳48,570 | $443 |
| Germany | €359 | ৳42,880 | $391 |
| India | ₹25,499 | ৳33,661 | $307 |
| Bangladesh | ৳56,659+VAT | ৳56,659+VAT | $516+VAT |
Model Name: Samsung Galaxy S23 Ultra (12/256 GB)
[Some countries such as Germany, UK, do not have 12/256 GB model available, so we have shown the price of 8/256 GB model. For the USA and South Korea variants, only the 256 GB ROM is mentioned and the RAM size can be 8 GB or 12 GB. The price difference between 8 and 12 GB variants is less than BDT 10,000 (+about $90 USD maximum).]
| Country | Local Price | Price in ৳BDT | Price in $USD |
| USA | $874.99 | ৳96,035 | $874.99 |
| South Korea | ₩1,429,000 | ৳117,138 | $1,068 |
| China | ¥8,499 | ৳130,952 | $1,193 |
| UK | £1,249 | ৳173,768 | $1,584 |
| Germany | €1.189 | ৳141,849 | $1,293 |
| India | ₹124,999 | ৳164,961 | $1,503 |
| Bangladesh | ৳224,999+VAT | ৳224,999+VAT | $2,051+VAT |
[Samsung offers a discounted price to some of the countries, but Bangladesh is not among them.]
As you can see from the price of the popular Samsung Galaxy A34 model, the official Samsung phone price is the highest in Bangladesh compared to any country in the world despite having local phone assembly factories. Samsung has been importing their flagship models, such as Galaxy S23 Ultra as local factories lack infrastructure for their assembling. Samsung is a South Korean brand and if you add the 58% import tax to the South Korean price, the official Bangladesh price was supposed to be:
৳117,138 + 58% (৳67,940) = ৳185,278. But Samsung is asking for ৳224,999 + VAT (up to another 7.5% ৳16874) = ৳241,873. This is ৳56,595 more even after the 58% import tax and more than double the price than the South Korean price.
What does it tell us? It says that the greedy, unfair and forceful policy of the government is a big fail and foreign brands are ruling over them as a punishment and there is no other way to put this. Samsung even keeps changing the official prices every few days based on the little ups and downs of the currency rate, which shows that they are showing no mercy at all. And very frankly, we do not blame Samsung based on the principle that we hold dear, ”treat others like you want to be treated”. Samsung is only returning how the government policies treated them. Thank you Samsung.
(C) Xiaomi and Co. can’t just sit and watch
Xiaomi is in the second position in the mobile phone market share of Bangladesh at the moment and often they go at the top position. They have always been known as one of the most people’s friendly brands and also have phone assembly factories in Bangladesh. But they can’t remain behind and keep on providing fair official pricing if no other brands are doing it. So, they have also increased their prices, not as aggressively as Samsung, but still it’s more than other countries. Let us give you the examples of two of their most popular devices below:
[Prices are collected from official Xiaomi stores worldwide as of 18.01.2024]
Model Name: Xiaomi Redmi Note 12 4G (6/128 GB)
[Many countries do not have the 4G model of this device and have 5G model or do not have the specific 6/128 GB base model for Bangladesh. So, we couldn’t show their prices.]
| Country | Local Price | Price in ৳BDT | Price in $USD |
| USA | $172.5 | ৳18,933 | $172.5 |
| South Korea | Not available | – | – |
| China | Not available | – | – |
| UK | Not available | – | – |
| Germany | Not available | – | – |
| India | ₹13,999 | ৳18,472 | $168 |
| Bangladesh | ৳21,499+VAT | ৳21,499+VAT | $196+VAT |
Model Name: Xiaomi Redmi Note 12 Pro 5G 8/256 GB
[South Korea has a model of this phone with different specifications and some countries do not have the 8/256 GB variant which is released in Bangladesh. So, we couldn’t show their prices.]
| Country | Local Price | Price in ৳BDT | Price in $USD |
| USA | $309.50 | ৳33,969 | $309.50 |
| South Korea | Not available | – | – |
| China | ¥1,599 | ৳24,600 | $224 |
| UK | Not available | – | – |
| Germany | Not available | – | – |
| India | ₹23,999 | ৳31,668 | $289 |
| Bangladesh | ৳37,999+VAT | ৳৳37,999+VAT | $346+VAT |
This is not just Xiaomi. Almost all other brands have been following this track of putting a higher price tag for Bangladesh, including Realme, Oppo, Vivo, Tecno and so on despite having local product assembly factories and without the VAT amount. Who are being wronged in all these? The consumers, who are the heartbeat of the industry and do not deserve to be treated in this manner, at all. And who is responsible? Yes, the corrupt government policies.
The tax is collected for the betterment of the life of people. But what betterment is it making when the people have to pay so much money to buy necessary goods in the first place? These policies are not for the betterment of people’s lives and the country. Of course, tax corruption in Bangladesh isn’t an unknown fact. So, it’s not hard to figure out that this is for the betterment of the life of the responsible government officials at the price of the general people and the ruining of the industry.
The government often shuts down any constructive criticism of their policies by any party. People are followed, tracked, arrested for criticizing government policies on social media or on their own channels. Their businesses are shut down. Their private space are invaded, and they are imprisoned, fined, punished, often brutally. So, you will barely ever find an honest and transparent report like ours.
The reaction of the Bangladesh Information and Communication Technology department to all these
On 17th January 2024, an announcement was made from the Ministry of Information and Communication Technology of Bangladesh that all unregistered phones must be deactivated and there should be no compromise in it [7]. This is to increase local production, phone sales and also to uphold law and order. Here to mention that, most of these “unofficial phones” that enter into the market as luggage products are not registered, and we have checked some of these phones and they are not registered. Why were they not registered, but businesses could still import and sell them? Is this the fault of the customs authority / government policy, or is this the fault of the business owners / consumers? What would you say? These phones were imported legally and were sold legally. Now what right does the government have to destroy the value of these products? The simple answer is they don’t, by the constitution of Bangladesh itself. And this announcement from the Ministry of Information and Communication Technology must be challenged by lawyers, lawmakers, business owners and consumers. They must be fined if necessary, and applicable.
Not just that, it is surprising how incompetent the ministry is for not being able to address that the brands are selling official products at a very unjust price. The government took no step at all against it or at least address this issue. We want to make it very clear that we are not blaming the brands. The infrastructure of the Bangladesh mobile industry is still not good enough for top-level foreign brands to operate well. So, the government had to take steps to improve the infrastructure and make policies that are favorable to foreign brands and investors. But they took a greedy step to introduce that ridiculous 58% import tax policy, inconveniently forcing the brands to build assembly factories, let the unofficial phones enter the market at the same time and now threatens to deactivate all unregistered phones, unlawfully so. Then also does nothing to stabilize the high official prices compared to any other part of the world. This is surely leading the industry to a bubble that will burst in due time, or have we already reached it?
[*All prices are valid as of 18.01.2024 at the approximate publishing time and are subject to change in the future by the manufacturer/s.]
The post In-depth: How incompetent and greedy government policies are ruining the mobile phone industry of Bangladesh appeared first on MobileDokan.com.
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