E-commerce in hot water

The entire E-commerce sector is hard pressed over the last three months in the wake of recent allegations of deceptions against some rogue E-commerce institutions.

The accusation has put the overall E-commerce in a rough patch which witnessed an optimum growth over the years.

Industry sources said customers’ confidence has ebbed out to a large extent as a few E-commerce platforms hit the headlines for fraudulent activities, and subsequent actions from regulators.

While lack of awareness-building campaign as well as lack of monitoring is also to blame at the same time, many well-known e-traders are bearing the brunt of recent contentions.

Ajkerdeal.com CEO AKM Fahim Masroor said some E-commerce companies have done business without paying any heed to the existing law. “As a result, E-commerce business has got a negative impact over the past three months, but buyers who buy products from good companies are still there,” he added.

It has been very difficult to bring in new buyers and many are terrified for which the online market has nosedived to some extent, observed Fahim.

The CEO stressed the need for government steps to in this regard to revive the sector.

Experts believe that the popularity of E-commerce companies in a very short period of time is due to millions of buyers and various attractive offers.

According to the Ministry of Commerce and related sources, more than 16 E-commerce companies have been accused of embezzling hundreds of crores of Taka and cheating buyers and suppliers. These companies were not able to deliver their products on time even after realising advance payment from buyers.

Advertising with cash back from 20 per cent to 150 per cent in the name of discount or cyclone offer drew buyers’ attention. Following this the National Consumer Rights Protection Department started receiving heaps of complaints from customers about not getting their products.

Sources said about five lakh people did not get back their massive discounts worth around Tk 8,000 to Tk 10,000 crore.

Of them, there are two and a half to three lakh buyers and one and a half to two lakh suppliers. Most customers’ money is stuck with eight to ten companies.

Evali itself admitted in a letter to the commerce ministry that it owes a total of Tk 543 crore. The suppliers of Dhamaka.com said in a letter to the ministry that they would get Tk 200 crore from the company.

E-Orange buyers blocked roads in the capital to demand their money and goods back. The company had been doing business with the temptation to double the money in 15 days and buy products from its website at a lower price. The online platform is accused of embezzling Tk 1,100 crore.

Besides, customers have also lodged complaints with the commerce ministry against Dalal Plus, Shrestha.com and Falguni Shop. There are several other companies that have been accused of withholding the dues of their buyers and suppliers.

The Ministry of Commerce on Tuesday sent a letter to the Bangladesh Bank seeking information on the latest financial situation of alleged E-commerce companies Alesha Mart, Dhamaka, E-Orange, Sirajganj Shop, Aladdin’s Pradeep, Qcom, Booboom, Adian Mart and Need.com.bd

The letter sought for information on the total amount of liabilities and the amount of current and fixed capital of the companies.

Hafizur Rahman, additional secretary, Ministry of Commerce, and also head of Digital Commerce Cell, said business has expanded in E-commerce sector while some organisations resorted to rogue business model that brought some risks. Attempts are being made to ensure the security of customers’ money.

In order to avoid a recurrence of such situation, a guideline has been issued to specify the advance payment, timely delivery of goods, transaction process, he pointed out.

According to the commerce ministry officials, there is no separate law for E-commerce in the country. In 2018, the National Digital Commerce Policy came into force. Earlier, there was no policy to manage this sector.

The new guidelines issued last month suggest delivering goods within five days within the same city and within 10 days for different cities or villages and refund within 10 days in case of failure to deliver on time.

The ministry has written to the Bangladesh Bank to give necessary instructions to the banks not to deposit any money directly from the customers in the own bank accounts of the E-commerce companies.

In view of this, the central bank has issued a circular stating that advance payment from customers cannot be deposited in the bank account of the E-commerce company against the purchase of goods or services.

It also issued directive to take appropriate steps to reduce the risk of transactions in the accounts of various E-commerce companies in the country’s scheduled banks.

In addition, e-Cab, an organisation of E-commerce traders, has taken various initiatives to promote E-commerce.

In the meantime, e-Cab has issued notices to 16 companies to show reasons for not being able to serve the buyers as promised. EQ Orange, 24 Ticket.com, Greenbangla Dotspace and ExcellentBigbazar.com have been accused of running multi-level marketing (MLM) businesses.

Meanwhile, the Bangladesh Bank has summoned the bank accounts of the 16 institutions.

According to e-Cab, about 2 per cent of the country’s population shop on E-commerce. More than 2000 small and big organisations are involved in it. Another 50,000 people are doing business by opening Facebook pages.

At present, more than two lakh orders are being delivered daily. Large conventional companies are also launching E-commerce site.

The pandemic brought a boon for this sector that has developed a lot in the last one and a half years when it witnessed 200 per cent growth.

Last year, the online sale of goods increased by about 60 per cent to around Tk 16,000 crore.

If this growth trend continues, there will be a Tk 22,000-crore market by the end of the year.

Entrepreneurs expect the market size to grow further to Tk 25,500 crore by 2023.

e-cab vice president Mohammad Sahab Uddin said e-Cab is monitoring member companies and some of these companies have been notified.

However, in many cases there is no alternative to E-commerce for safe shopping particularly during corona, he added, pinning hope that the ongoing crisis will be overcome and situation will improve.

It is learnt that from July 2018 to last June, customers lodged 13,317 complaints against 19 E-commerce companies.

Source said women entrepreneurs who supply products to big companies are not getting their payment, thereby dealing a heavy blow to such small entrepreneurs, while thousands of people are on the verge of loss or loss of capital.

According to experts, E-commerce is not a problem. The problem lies in the way the e-trade is being dealt with. It is important to implement the guidelines given by the Ministry of Commerce.