Confidence ebbs as shoppers smell a rat in e-commerce

The scam-hit e-commerce has dealt a heavy blow to consumer confidence that has affected the overall online sale.

The pandemic was a blessing in disguise for e-traders who had been witnessing a sharp rise in their business, but a few rogue e- platforms brought down the upward curve.

The government, however, has taken several steps to steer the e-commerce sector, which is expected to run in a disciplined manner in 2022.

According to the industry insiders, the year of 2021 marked a sharp rise in their business, but the growth came down towards the end of the year when financial scandal engulfed the e-commerce culture.

e-Commerce Association of Bangladesh (e-CAB) General Secretary Muhammad Abdul Wahed Tomal said there had been an optimum growth in sight; new entrepreneurs showed up. However, some corrupt players stained the sector performance.

Tomal, however, hopes that the government new guidelines will steer a course for the e-commerce sector and everything will be fine as before in the New Year.

AjkerDeal.com CEO AKM Fahim Mashroor told The Business Post that the dramatic decline in e-commerce is somewhat unexpected; the bad time is over, and now is the time to start anew and afresh for 2022.

“If the government and the private sector work together, a planned business will happen. However, new entrepreneurs will be under pressure due to additional rules and regulations,” he observed.

E-commerce companies, including Evaly, Alesha Mart, Dhamaka, E-orange, Sirajganj Shop, Aladiner Prodip, Qcoom, Boom Boom, Adyen Mart and some others had collected money in advance from their customers, luring them into heavy discounts, but failed to deliver products on time.

Its huge gap between assets and liabilities left a large number of clients and vendors not served and unpaid at some point of time.

Sources said the corrupt e-commerce outlets continued their dubious business practices because the sector had been left unregulated for long.

Only in last June, the Bangladesh Bank raised concern about high financial transaction through some unregulated e-commerce sites.

The banking regulator introduced Escrow service at the end of June to watch out the e-online transaction.

Last September, the commerce ministry found 11 e-commerce firms involved in fraudulent activities, embezzlement of fund, and money laundering. In the last month, the ministry sought bank details of 42 e-commerce companies accused of luring customers into deceptive offers.

The authorities are now set to introduce compulsory Unique Business Identification (UBID) from January for e-commerce trading on any online platforms including Facebook, and will form a central logistic tracking platform and a central complaint management system to streamline e-business.

“We are working on how to run e-commerce in a more transparent manner. The UBID registration will start in new year,” additional secretary to the commerce ministry AHM Safiquzzaman told The Business Post.

E-commerce sector had brought about changes to consumer behaviour and contributed to growth. It used to provide services during the pandemic-induced lockdown.

According to the e-CAB annual report published on October 16, Tk 3,000 had been transacted in six months while 50,000 new jobs created and service provided to 6 million customers.

The report also found an overall digital transaction of over Tk 16,000 core. At present, about 2 lakh deliveries of daily commodities alone are being made every day.

For the past few years, the sector has created opportunity for many and developed women entrepreneurs who account for 50 per cent of the businesses and run small and medium enterprises (SMEs) online.

Currently, Bangladesh has 2,500 e-commerce sites and a huge number of unofficial online shops run by women.

This sector is expected to reach a mature state within the next five years.

According to the German-based research institute Statista, the online fashion market in Bangladesh bears a huge prospect. In addition, electronic products, furniture and appliances, and toys see a growing online sale.

E-commerce proceeds in 2019 amounted to Tk 13,184 crore while it was Tk 560 crore in 2016.

About 30,000 products are being delivered per day in Bangladesh through e-commerce, and Dhaka, Chattogram and Gazipur districts account for 80 percent of them, according to Bangladesh Competition Commission.

The total transactions on e-commerce platforms hit an all-time high of Tk 911 crore in April this year. Around 1,000 e-commerce firms are listed with the Ministry of Commerce.