E-commerce is one of the most potential and fastest growing sectors in Bangladesh, which got a further shot in the arm following several protracted lockdowns in the country on account of the Coronavirus pandemic since last year, which forced people to indulge in shopping for all their needs and requirements from the safety of the four walls of their homes rather than visiting the bricks-and-mortar store and exposing themselves to the risk of contracting the dreaded virus.
But as e-commerce soared high amidst the pandemic so did reports of various anomalies and malpractices, especially related to product delivery and payments.
Of late e-commerce has gained unprecedented popularity in Bangladesh but so also have corruption and malpractices. The Government is said to have received over 13,000 complaints against e-commerce firms even as the Directorate of National Consumers’ Right Protection is now led to conduct 70-80 drives every day across the country to sort out these complaints.
The issue reached such proportions that it forced several banks to cancel card transactions with many e-commerce entities. To start with, BRAC Bank first notified its customers of having cancelled card transactions with 10 e-commerce platforms, which included the likes of Evaly, Alesha Mart, Dhamaka, E-orange, Sirajganj Shop, Aladiner Prodip, Qcoom, BoomBoom Shopping, Adyan Mart and Needs.
BRAC Bank credit, debit and pre-paid card transactions for the listed merchants are cancelled with immediate effect, underlined the bank in a web link provided through SMS to its customers, a move that came amidst an increasing number of customers who made purchases at e-commerce sites raising allegations of not getting products on due time.
In some cases, the payments had been made months in advance through cards or mobile financial services (MFS).
“This is our strategic decision. We will initially implement the decision for the time being, but it may continue for a long time depending on the situation,” stated Selim RF Hussain, Managing Director of BRAC Bank adding this is not the first time BRAC Bank severed ties with such companies in the interest of both clients and banks.
According to reports, Evaly, one of the top e-commerce sites, has had its official Facebook page crowded with a slew of complaints of customers seeking either products or refunds after making payment months in advance even as Alesha Nahid Apu, the Executive Director for Marketing and Communication at Alesha Holdings, one of the concerns of which is Alesha Mart, then stated that it was a decision of the BRAC Bank management and a matter of their policy.
“So, we have nothing to say about their decision,” said Alesha while adding, “But at our end, we think if they check the matter for which they have taken this decision, then it will be resolved because there is no problem from our side.”
Soon followed three more banks, which cancelled the card transactions with some e-commerce platforms. Following BRAC Bank’s footsteps, Bank Asia, Dhaka Bank and The City Bank, took the same decision in this regard after many of their clients also alleged that they have not received their products on time despite having made advance payments to the e-commerce platforms.
The e-commerce platforms that faced the embargo from these three banks are namely Evaly, Alesha Mart, Dhamaka, E-orange, Sirajganj Shop, Aladiner Prodip, Qcoom, BoomBoom Shopping, Adyan Mart and Needs.
“Transactions at selected e-commerce merchants are temporarily suspended with immediate effect using any City Bank cards,” read a mobile phone message from City Bank to its customers urging them not to conduct transactions with some e-commerce merchants through cards even as Managing Director of Bank Asia, Md Arfan Ali, on his part said they had taken the decision in the interest of the customers while HM Mustafizur Rahman, Head of Retail Banking at Dhaka Bank, said the lender had discontinued their relationship with the e-commerce platforms for the time being.
With complaints pertaining to payments and products delivery snowballing into a major issue, a stakeholders meeting was convened at the Ministry of Commerce, participating in which, the e-Commerce Association of Bangladesh or e-CAB proposed introduction of digital commerce guidelines or SOP and escrow services on issues of online transactions.
e-CAB President Shami Kaiser and General Secretary Mohammad Abdul Waheed Tamal were present at the meeting on behalf of e-CAB while Secretary of the Ministry of Commerce Tapan Kanti Ghosh presided over the meeting.
It may be mentioned that the Ministry of Commerce had earlier convened an emergency meeting based on the report of the Bangladesh Bank on an advance collection of goods by some e-commerce companies and imbalance of liabilities and assets of the companies.
The meeting also proposed to introduce digital commerce guidelines or SOP and escrow services as per the proposal of e-CAB even as in addition, keeping with the proposal of the central bank, it was decided that instructions will be sent to the banks that e-commerce companies will receive a payment after the product is delivered to the buyer, paying using the payment system.
In this regard, e-CAB President Shami Kaiser said, “We have been demanding for a long time to introduce e-commerce law and escrow services so that e-commerce companies can be brought under legal obligation and the financial transactions of buyers can be secured,” adding, “In the meeting, we raised the issue again. Hopefully, the SOP will be announced soon as the first step in the legal process and the Bangladesh Bank will add escrow service as soon as possible.”
Meanwhile, e-CAB Secretary General Mohammad Abdul Waheed Tamal said, “Two proposals regarding implementation of SOP and escrow services were adopted by e-CAB at the meeting. I believe if this decision is implemented, millions of entrepreneurs and buyers will be saved from financial uncertainty,” even as he presented the report of the review committee on Evaly constituted by e-CAB earlier.
In the said meeting, Hafizur Rahman, Deputy Secretary, Ministry of Commerce, Director General, WTO Cell, raised the issue of the formation of stakeholder consultation and investigation committee while Bablu Kumar Saha, Director General of the Consumer Rights Protection Council, highlighted various aspects of consumer rights supervision even as Md Mejbaul Haque, General Manager, Payment System Division, Bangladesh Bank, proposed how to monitor the matter through the banking system
Soon the Commerce Ministry released the e-commerce guidelines prepared after consulting various ministries, Governmental and non-Governmental organisations, and other stakeholders concerned, aimed at bringing accountability to the sale of goods and services online, which have been positively received by those engaged in online businesses even if they stressed on the need to properly implement the guidelines.
Pertaining to the same, Commerce Minister Tipu Munshi briefed reporters on various aspects of the guidelines over an online event, reading out the key points of the guidelines even as he added that for digital businesses to run smoothly, the Digital Commerce Management Guidelines were prepared.
“It gives detailed explanations about displaying product and services information in the marketplace, general rules, presentation of sale of goods or services in the marketplace, product delivery, advance payment price adjustment etc. We hope it will be helpful for customers,” maintained the Commerce Minister even as Commerce Secretary on his part stated, “I came to know about the expansion of this sector through mass media and social media. Customers were being lured by unlimited offers. Joining this Ministry, a month ago, I gave importance to creating consumer and business friendly guideline for e-commerce. Hopefully, both entrepreneurs and consumers will get positive results from this guideline.”
Meanwhile, terming the formulation of the guideline a milestone, Syed Almas Kabir, President of the Bangladesh Association of Software and Information Services, observed that if it is not implemented with the involvement of law enforcement agencies, the guidelines will fail to bear any fruit.
“For example, the copyright law which has been enacted, but due to lack of enforcement, it has become useless. We have to ensure that this guideline does not share the fate of the copyright act,” said Almas while underlining that it very is important to have coordination between concerned agencies, including Bangladesh Bank and City Corporations, in enforcing the law.
“The e-commerce business will exceed US $ 3 billion in the next two years. Those who are doing business have to be given some freedom. You cannot swim with your hands and feet tied. Opportunities have to be provided, so that they can come up with more and more innovative business solutions in compliance with the law,” he added further while Shomi Kaiser underlined that the guideline aims at bringing e-commerce greater accountability and transparency.
It protects the interests of consumers and provides opportunities for entrepreneurs at the same time; it also prevents entrepreneurs from making unrealistic offers, stated Shomi, adding, “Besides opening a new horizon, the rapid growth of the e-commerce sector has brought forth various problems also. If needed, the law can be changed to address those problems.”
In the meantime, in a separate development, e-CAB was said to be mulling suspending Evaly’s membership after it received lot of complaints of irregularities in the thriving e-commerce sector against Evaly from customers and merchants even as it sent a show-cause letter to Evaly’s Managing Director Mohammad Rassel, asking why his company’s membership should not be suspended following complaints from the Bangladesh Bank through an inspection report, the Commerce Ministry, the Directorate of National Consumer Rights Protection, and many buyers and merchants.
“Evaly has been asked to respond within seven working days upon receiving the letter. We have sent a show-cause letter to suspend its membership as per e-Cab’s policy framework,” reportedly maintained e-CAB’s Vice-President Mohammad Sahab Uddin.
According to the e-CAB evaluation committee’s report on Evaly’s business, the e-commerce site has not taken any initiative to improve its customer service quality; besides, there is also an allegation that Evaly was not abiding by the newly issued e-commerce operation guidelines, the letter said even as the e-CAB has also taken steps to suspend or cancel memberships of other companies that are allegedly involved in malpractices.
The association has also sent show-cause letters to Green Bangla E-Commerce Limited, Annex World Wide Limited, Amar Bazar Limited, Excellent World Agro-Food and Consumers Limited while preparations are underway to send show-cause letters to several other companies, maintained sources to the media.
e-CAB officials said the letters were issued as there is a provision of seeking an explanation before suspending or cancelling membership in the e-CAB’s policy even as e-CAB’s Vice-President said they are sending show-cause letters to all the 10 companies with which various banks suspended the use of their debit and credit cards for transactions.
To exploit the potentials of the booming e-commerce sector and increase customer confidence, they will suspend the memberships of the companies which are operating under the MLM system.
Seeking anonymity, a senior e-CAB official meanwhile said the way some e-commerce companies, were taking advance money from new customers and giving products and refunds to old ones is not an e-commerce business. Such anomalies of various e-commerce companies have led to customers losing confidence in the entire e-commerce sector. Thus, those which are doing businesses complying with rules and regulations are being affected even as many e-CAB members reportedly also lodged complaints against the companies.
It may be mentioned here that e-CAB has about 1,100 members, of which, 14 big companies are allegedly operating MLM businesses in the name of e-commerce. Criminal Investigation Department (CID) in the meanwhile has reportedly sent a letter to the Bangladesh Bank, requesting that it freeze Dhamaka Shop‘s bank accounts as well as according to industry people, like the popular e-commerce platform Evaly, there are allegations against Dhamaka that it is not providing products or refunds to customers on time despite taking advance payments.
Given the steps initiated by the various stakeholders, it is just a matter of time, before order and sanity returns to the e-commerce sector, which would only add to its prospects of future growth.
Some key instructions issued for e-commerce players:
- Multilevel marketing, betting and gambling cannot be organised online.
- To sell medicines, the companies will need licences from the Directorate General of Drug Administration. For the sale of explosives, they will need licences from the Department of Explosives.
- Conditions must be written in Banglabeside the products on websites or social media. Other languages can also be used along with Bangla. The conditions cannot be contradictory to the law of the land.
- The websites must inform the customers about special software or cookies if there is any.
- They need to get permission from the users before collecting their personal information.
- Government permission will be necessary for lottery or raffle draw.
- Bangladesh Bank’s approval will be necessary for a digital wallet, gift card, cash voucher or other means that can be used as an alternative to cash.
- No cash business can be conducted on the digital platform without the bank’s permission.
- Customers cannot be forced directly or indirectly to buy products or services.
- Individuals or companies operating digital business must get trade licence, VAT registration, Tax Identification Number or TIN, unique business identification number or personal retail account, and show them on the website or social media.
- Transaction details have to be stored for at least six years.
- The online marketplaces must store a seller’s name, photo, NID copy, mobile number, and address.
- Advance payments can be charged only for products that are in the country.
- All companies must appoint a compliance officer to handle the complaints filed by customers. He or she will coordinate with the DNCRP and settle the issues within 72 hours.
- A customer must be informed within 48 hours if a product or service cannot be delivered. The money must be refunded within 72 hours.
- If a company fails to deliver the product after taking advance payment, it must refund the customer within 10 days through the same mode of payment, and pay the charges for transactions. This rule will not be applicable if a customer fails to receive the product within the time.