Bangladesh's burgeoning e-commerce industry has been dogged by a lack of monitoring and transparency for years as the repeated calls for oversight seemingly fell on deaf ears until the recent allegations of embezzlement and financial fraud surfaced against a few platforms.
Although new guidelines have now been drafted, customers and sellers are still no closer to recovering the billions of takas they paid to digital commerce firms such as Evaly and Eorange, whose owners are currently languishing behind bars.
Government officials have blamed the 'greed' of customers, ensnared by abnormal discounts, for the debacle. But the e-Commerce Association of Bangladesh or e-CAB has pointed the finger at a lack of coordination among government agencies to monitor the sector.
The Coronavirus pandemic came as a blessing for the digital commerce sector, which was introduced in Bangladesh a decade ago, as housebound people resorted to shopping online for a variety of products, ranging from groceries to clothing and electronic devices.
Numerous e-commerce firms opened for business in the past one year, joining a handful of platforms that started operations after Bangladesh Bank launched National Payment Switch for online transactions in 2012.
Well before the recent scams were unearthed, bdnews24.com published a report in June 2019 on how e-commerce was booming beyond any regulatory oversight.
The report highlighted the difficulties in ensuring consumers' rights in cases of fraud as well as the receipt of low-quality or expired products in the absence of a regulatory authority to discipline the sector.
“We need a monitoring authority for e-commerce to bring discipline to the sector,” Consumers Association of Bangladesh President Ghulam Rahman had told bdnews24.com at the time.
Mohammad Rassel, managing director of Evaly, and his wife Shamima Nasrin are in jail, with the company owing its customers and sellers over Tk 5.4 billion.Mohammad Rassel, managing director of Evaly, and his wife Shamima Nasrin are in jail, with the company owing its customers and sellers over Tk 5.4 billion.“We don’t have such regulatory authority at the moment but we’re contemplating the issue. We’ll do something soon,” Commerce Minister Tipu Munshi had said.
In the face of the controversy sparked by Evaly’s business model, bdnews24.com ran another report three months later on the concerns surrounding consumer safety in digital spaces. Tipu Munshi and Shomi Kaiser, the then president of e-CAB, said they had been looking into the issue to ensure safe online shopping.
More than two years have since passed but many of the customers who ordered products worth hundreds of thousands of takas -- mostly to resell and make a profit from the huge discounts on offer -- by borrowing money or selling family land and gold ornaments have filed thousands of complaints with the Directorate of National Consumer Rights. And, the number is rising beyond the officials’ capacity to count.
Launched in 2018, Evaly gained popularity among customers by offering up to 50 percent discounts on costly products, such as motorcycles, air-conditioners and TV sets.
Mohammad Rassel, the managing director of the company, had said he had been implementing an 'unusual business model' to capture the market in the absence of any competition regulation in the sector. Now, he is in jail, with Evaly owing its customers and sellers over Tk 5.4 billion as its business became more aggressive and unconventional.
Eorange, Dhamaka, Qcoom, Dalal, Sirajganj Shop, Aladiner Prodip, Boom Boom, Adian Mart, Need, Alesha Mart and several others followed the Evaly model, luring a huge number of customers while at the same time, creating the scope for more scams. This forced the commerce ministry into action as it issued the digital commerce guidelines on Jul 4.
But the founders of many of these firms had already begun to go into hiding. A police official involved with Eorange was caught in India, reports bdnews24.com.
Recently, the High Court called into question the government's efforts to curb money laundering schemes operating in the name of e-commerce, multi-level marketing (MLM) and microcredit businesses in the wake of the Evaly scandal.
"Those [who are embezzling the money] will go to the police station and spend their nights in jail. But what about the money that they took?" a judge asked.
There is no official account of how much money customers and sellers lost to the e-commerce scams.
Police tussle with a protest march led by disgruntled Eorange customers in front of the Jatiya Press Club on Thursday, September 23, 2021. Photo: Asif Mahmud OvePolice tussle with a protest march led by disgruntled Eorange customers in front of the Jatiya Press Club on Thursday, September 23, 2021. Photo: Asif Mahmud OveAccording to e-CAB, the controversial firms made transactions worth Tk 67 billion from March to Jul 4 and Tk 4.9 billion over the following months. The Ponzi scheme-style businesses stopped once the authorities began to turn their gaze at the e-commerce sector. A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.
LACK OF COORDINATION?
An e-commerce policy was drawn up in 2018 as part of an initiative by the e-Commerce Association of Bangladesh or e-CAB, said General Secretary Abdul Wahed Tomal.
The policy provided specific directions to adopt immediate, mid-term and long-term plans. It included the formation of a central coordination cell, technical committee and risk management committee. But it never saw the light of day.
