‘Business is all about consumer trust. This growing sector may suffer in the long run for doing business unethically’
As many e-commerce platforms are being investigated, with some owners in jail, a big trust deficit is growing among people, opined experts and e-commerce consumers.
Talking to Dhaka Tribune, both groups said that a distrust has grown that will be hard to overcome.
Regarding shopping experience on e-commerce, Jannatul Faujia, a private university student said: “Because of the pandemic, shopping online offers flexibility and social distancing that traditional markets cannot offer.
“But shopping on Evaly and Alesha Mart was a horrific experience. I still haven’t received products ordered from Evaly and Alesha delivered 25 days after the estimated delivery period.
“I won’t be ordering online anytime soon.”
Zubayer Ahmed had a similar experience. “My shopping experience with e-commerce is awful. I don’t believe in their fancy offers anymore. Most of the time I ordered from online stores, they did not deliver the products on time.”
“Now I don’t recommend my friends to buy online,” he added.
Another consumer, seeking anonymity, told Dhaka Tribune: “I’m ashamed I trusted an online shop. I am still waiting for my bike. I attempted several times to contact that platform, but they were very rude.”
He also said that he does not share his experience with his relatives for fear of being bullied.
Consumers of troubled e-commerce platform Eorange have already lodged a case against its owners with the Gulshan Police Station in the capital on Monday night.
Fearing the owners of the company will flee the country, they sued the owners, while also continuing with their protests in front of the National Press Club in the capital on Tuesday.
As per the case statement, the previous owner Sonia Mehjabin, her husband Masukur Rahman, Amanullah, Bithi Akhter, and Kawser have been accused of embezzling Tk1,100 crore.
Among the five, Sonia Mehjabin and her husband Masukur Rahman surrendered before the court seeking bail in the case.
Later on Tuesday, a Dhaka court rejected their bail plea and sent them to jail.
Also Read - Two owners of E-orange sent to jail
According to the platform’s earlier posts, Bithi Akter was named the new owner of the company.
Helal Hossain, a television vendor from Old Dhaka said: “Never will I ever order from an online store again. No one from my family will. I ordered products worth Tk5 lakh from Evaly and Dhamaka Shopping in total. The e-commerce trap devastated my life. Now I realize that I won’t get my money back.”
According to the CID investigation, Dhamaka Shopping has allegedly transferred more than Tk50 crore — received from customers as advance payments — to bank accounts of its officials and laundered the money out of the country.
Additionally, Tk588 crore worth of transactions remains unexplained by the platform.
Dhaka Tribune was unable to reach Dhamaka for comments regarding these allegations.
According to CID, they have also found cognizable evidence against 14 e-commerce platforms at the primary stage of the investigation.
Most of these platforms offer high risk for high returns, a trend started by Evaly.
Speaking to Dhaka Tribune earlier, Barrister Tanjib Ul Alam said the business activities of Evaly in Bangladesh are deceptive.
He had called it a ponzi scheme. “All their activities should be brought under the law and stopped at this moment. Otherwise, consumers and merchants will not get back their money. It is not possible for Evaly to operate a sustainable business through the offer campaigns, so it can be said that since it is not sustainable, it is a Ponzi scheme.”
Alam noted that these types of companies know from the beginning that the business model will not be viable and at some point, they have to close shop.
At present, there are approximately 2,500 e-commerce sites in the country. Moreover, there are more than one and a half lakh Facebook-based business ventures. 80% of the online businesses are based in Dhaka, Chattogram and Gazipur.
However, during the coronavirus pandemic, the sector has spread to the districts and upazilas of the country.
According to the E-Commerce Association of Bangladesh (E-CAB), the annual growth of the e-commerce sector in the country is 75%. The size of the sector is 8,000 crore. It is estimated that by 2023, the size of this sector will exceed Tk25,000 crore.
Director-General of the WTO Cell of the Ministry of Commerce and the Head of the Central Digital Commerce Cell Hafizur Rahman said: “There is a scope to take legal action against the companies that are not delivering products to the consumers or paying the dues of the merchants.”
It is necessary to file a case under the Consumer Rights Act of the consumers and the customary law of the merchants, he added.
According to Bangladesh Bank sources, in the four months from January to April this year, Dhamaka has collected more than Tk350 crore in orders through such lucrative offers. According to CID sources, Dhamaka has swindled thousands of customers with tempting offers such as “Double Taka Vouchers', 'Signature Cards” and other unusually hefty discounts.
The officials also believe that it has laundered nearly Tk50-100 crore initially.
The National Directorate of Consumer Protection (DNCRP) has received complaints from a number of consumers against this online shop.
According to the DNCRP, customers claim settlement rate is less than 20%.
Also Read - Is Evaly a Ponzi scheme?
Talking about e-commerce trust deficit, Dr Muhammad Shahadat Hossain Siddiquee, professor at the Department of Economics at the University of Dhaka said: “These companies somehow entered into the market under a regulatory body. Now, if you stop their operation in the name of irregularities, it would be similar to cutting off a head to cure a headache.”
Prioritizing consumer rights protection, regulations and monitoring these businesses is vital, he added that weak mechanisms from the regulatory bodies led to these trust issues.
“Business is all about consumer trust. This growing sector may suffer in the long run for doing business unethically. It is high time to realize the potential and measures that must be taken considering the customers’ side,” he elaborated.
Looking at the whole e-commerce sector, the expert opined that scrutinizing the business model and analyzing sustainability is very important right now.