Bangladesh’s e-commerce sector has seen significant growth since the Covid-19 outbreak in March 2020. This growth, however, did not last long. As of mid-2021, the industry has been mired in controversy surrounding scams from several players, including Evaly, Eorange, Alesha Mart and Dhamaka. These ecommerce players came up with unsustainable and unrealistic discounts and refund offers on prepayment to entice customers, and then failed to deliver the products or refund customers’ money, or even pay. traders.
As a result, customer confidence across the e-commerce industry has taken a hit, leading to a substantial drop in transactions. A local daily, citing a report on e-commerce transactions from the Bank of Bangladesh, revealed that transactions for October 2021 were down 41.53%, to Tk 743 crore, from the transaction of June 2021, when it stood at Tk 1,277.4 crore.
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In addition, the inability of the authorities to stop in time the misadventures of unscrupulous actors (although they have been reported on several occasions since the end of 2020), the absence of a concrete political framework to regulate the sector, and the inability of authorities to trace customers’ money and the assurance of reimbursement have also added to the fears of customers, many of whom now feel uncomfortable shopping online.
While these scams are still a major concern for the authorities, they must now also focus on taking preventive and curative measures to put the e-commerce sector back on the growth trajectory which, according to a forecast from November 2020, had to be worth it. $ 3 billion by 2023.
One of the first steps in this regard should be to follow the money trail so that you can reimburse the parties involved. Financial regulators, in particular the Bangladesh Financial Intelligence Unit (BFIU), should take a closer look at the money laundering aspect.
It was recently reported that Dhamaka’s general manager transferred Tk 84 crore to his personal account from the advance payments the platform received from customers.
SMD Jasim Uddin Chishti, Managing Director of Dhamaka, has also loaned Tk 25 crore to other companies he owns, in addition to embezzling Tk 20 crore, in the name of purchasing software. The company, now only having 45.28 lakh Tk in its account, had taken 736 crore Tk as an advance payment from its customers and only paid 557 crore Tk to merchants. The company now owes Tk 480 crore to its customers and traders. Evaly, Eorange and others have also duped their customers and merchants and owe them millions of taka.
Now the question is: where is the missing money? Is the money still in the country? Where are the flaws in the system, because these multiple cases could not have been the result of chance or chance? Why couldn’t regulators and law enforcement identify the problems sooner? Why haven’t the authorities taken preventive measures before?
More importantly, who are the primary and secondary beneficiaries of these scams? By beneficiaries I mean not only the SMD of Dhamaka Jasim Uddin Chishti, or the CEO of Evaly, Mohammad Rassel, and his wife and company president, Shamima Nasrin, but the brains that moved the pawns from behind the curtains. – if there are any – and each individual, organization or union who have benefited from these scams, whatever they are or whatever their political ties.
These are questions that must be carefully considered by competent impartial agencies, because in a corrupt system that allows such scams to go on for months, not a single page needs to be left unturned in order to identify the rotten elements that eat away at the heart of the system, making it dysfunctional and inefficient. Answering these questions would not only help chart the money trail, but also help formulate a comprehensive policy framework that would protect the interests of not only customers or e-commerce players, but the industry as a whole.
With the pandemic expected to last for a long time, e-commerce has become one of the preferred options for customers around the world. And with mobile financial services and banks facilitating online cashless payments, e-commerce has become a more convenient market. We must take advantage of these opportunities.
For now, the Ministry of Commerce has released the Digital Commerce Operations Guidelines, 2021, in accordance with the National Digital Commerce Policy, 2018 (as amended in 2020), to ensure transparency and accountability in the sector, among other objectives. And while the guidelines are comprehensive in nature, their effectiveness will only depend on the quality of their application. If regulators and law enforcement selectively enforce the guidelines, it will be a doomed act and will only hurt the growth of the e-commerce industry.
“While the 2021 Digital Commerce Operations Guidelines are a welcome step towards the crisis we have been through, we must keep in mind that this is only a stopgap measure. In order to truly create an enabling environment for the long-term growth and much-needed sustainability of the e-commerce industry, the government, in line with its high-profile aspiration to create a digital Bangladesh, must focus on formulating a comprehensive policy framework, which will also define the roles and responsibilities of each actor involved, in particular to ensure proper implementation, ”suggested Dr Iftekharuzzaman, Executive Director of Transparency International, Bangladesh (TIB) while speaking with this writer . He added that it is also important that relevant stakeholders are involved in the development of such a policy.
As we move forward into 2022, in an effort to create greater reach for the e-commerce industry, we need to learn from the setbacks of 2021 and reset the system to make the most of what this industry has to offer.
Tasneem Tayeb is a columnist for The Daily Star. His Twitter handle is @tasneem_tayeb