Evaly cashback offer 'violates' Competition Law

Bangladesh Competition Commission (BCC) has asked the local e-commerce platform 'Evaly' for an explanation as it allegedly violated the Competition Law while offering different types of cashback to its clients ranging from 80-150 per cent on product sales. 

BCC on Tuesday sent a notice, signed by one of the members of BCC, to Evaly founder and CEO Mohammad Rassel about explanation on violation of local competition law within 15 days.

Local e-commerce company Evaly, which within two years into its business, has sold products worth 1,000 crore taka although the company’s paid-up capital is only 50,000 taka. As the business is growing, an increasing number of complaints have also been lodged against the e-commerce platform with various government agencies.

BCC letter reads: In the context of the appropriate subject, it is reported that the e-commerce platform Evaly had a campaign called 'Eid Dhamaka’ during the last Eid festival.

The offer came under limelight recently. This offer includes different types of cashback offers for Evaly on different products ranging from 80% up to 150%. Usually, such offers tempt the consumer to buy the product at a lower price. 

But Evaly violates its own condition of paying 60 per cent from cashback balance: “Partial payment is not allowed in Eid Dhamaka campaign, full payment has to be made,” reads the Dhamaka advertisement.

BCC letter also revealed “Cashback amount will be added to the balance three days after payment. This cashback amount will be adjusted later with any regular shopping in Evaly.”

“That cashback can be used in shopping on condition that 60% price of the product has to be paid from the balance and the remaining 40% of the price with new payment.”

BCC letter further said due to the 4th condition of Evaly offer, it is a competition without a rebate on conventional discount.

The concerned legal provision has been included in Section 15 of the Competition Act 2012. It is evident from the conditions provided that Evaly cashback offers are likely to have an adverse effect on market competition or cause expansion or create a monopoly situation in the market, it said.

Commission letter instructed the errant company to provide the information within 15 days of receipt of the letter.

BCC letter also asked for detail information about Evaly including its annual turnover, data on income and expenses since its inception, description of the products covered by Evaly, details on territorial boundaries of the products and list of businesses that have been conducting business activities through Evaly. The letter also asked for an explanation on the terms and conditions of business transactions on how to do business with 80% -150% discount on Evaly products. 

The commission also asked amongst other things to explain the difference between Evaly and Eid Dhamaka offer and other offers in details, during the offer with sales, income and profit 3 months before the Eid Dhamaka offer period. Comparative statement of sales, income and profit will also have to be mentioned in the reply in relation to the allegations against Evaly, it said.

Founder of Evaly, Mohammad Rassel holds an MBA degree from Dhaka University’s Institute of Business Administration (IBA). He began his career working at Dhaka Bank. After leaving the bank, he started the business by importing ‘Kids’ brand diapers. Then he set up Evaly.

In the beginning, a system called ‘Voucher’ was introduced offering 300 per cent and 200 per cent cashback. Now the cashback offers are 150 per cent, 100 per cent and 40 per cent return on product sales. Evaly created quite a sensation by selling pen drives for 10 taka and T-shirts for 15 taka at the outset of its business.

ask/wi