Participants at a webinar titled 'Regulating the e-commerce industry: Prerequisite for ensuring sustainability', organised by The Financial Express, on Sunday
Speakers at a virtual discussion have said that the government must intervene in the Ponzi scheme, being run in the guise of e-commerce initiatives.
No business entity except banks can hold the money of clients for an uncertain period of time, but some e-commerce platforms were doing so in the name of business, they said.
The industry stakeholders and experts said holding Tk 40 to 50 billion by some eight e-commerce platforms was not only a crisis for the business but also a financial regulation crisis.
As e-commerce is at a nascent stage in Bangladesh, the sector requires special protection, they observed.
The experts said the government should formulate policies protecting local e-commerce platforms.
They also urged the government to be cautious about imposing too much regulation as strict measures would hamper the growth of a budding sector.
The speakers said this at a webinar organised by The Financial Express, titled 'Regulating the e-commerce industry: Prerequisite for ensuring sustainability', on Sunday.
The webinar is the sixth episode of a series of virtual dialogue organised by the FE.
FE Editor Shah Husain Imam delivered the opening speech at the webinar, while Dr Muhammad Shahadat Hossain Siddiquee, Professor, Department of Economics, University of Dhaka and Senior Research Fellow at BRAC Institute of Governance and Development (BIGD), moderated the discussion.
In his speech, FE Editor Shah Husain Imam said digital commerce had marked an exponential spike during the Covid pandemic.
Statistics show that the market size of e-commerce has expanded from worth Tk 5.6 billion in 2016 to Tk 166.16 billion in August 2020, he said.
But we are still at the nascent stage of e-commerce, he commented.
The country has a population of 165 million and 33 per cent mobile internet penetration, which is increasing, said the FE editor. This trend indicates the potential multiplier effect on e-commerce, he added.
According to a report of Cyber Crime Awareness Foundation, Mr Imam said, 11.48 per cent clients were deceived last year by various e-commerce and f-commerce platforms - the percentage was only 7.44 per cent in 2019.
He urged the government to find the reasons behind the increase in the number of deception cases in e-commerce.
Managing Director and CEO of Mutual Trust Bank Syed Mahbubur Rahman said there was a surge in e-commerce platforms in recent months.
At the same time, there are instances that show that the trust in e-commerce activities is fading away as well because of the financial issues involving some e-commerce platforms, he said.
He said banks could assist e-commerce platforms in two ways - facilitating payment and becoming a growth partner.
Mr Rahman stressed on the need for rating agencies to assess the strength of start-ups so that banks can invest in those companies.
Barrister Tanjib Ul Alam, head of chamber at Tanjib Alam & Associates, said different authorities had received hundreds of complaints against e-commerce platforms, but there was not enough manpower to resolve those complaints.
He said a government agency alone had received 6,000 complaints against Evaly.
Barrister Alam said though the law-enforcing agencies were responsible for dealing with Ponzi schemes, they were not aware of such illegal practices.
There is no specific regulator for the e-commerce sector; so, the government should intervene to stop financial scams in the sector, he added.
Zia Ashraf, director of the International Affairs of E-commerce Association of Bangladesh and co-founder of Chaldal, said it was good that different regulators, including Bangladesh Bank, appeared on the scene when trust in e-commerce was declining.
Cash on delivery method is the most trusted method among Bangladeshi e-commerce platforms and customers, he added.
Fahim Mashroor, founder of Bdjobs and ajkerdeal.com, said, "Many of us are not aware of the enormity of these financial scams."
It was almost a parallel financial system put in place by some e-commerce platforms and nobody was taking care of it, he added.
Fahim Ahmed, president of Pathao, said robust infrastructure for e-commerce was not available here - only primary infrastructure was in place.
"But we need quality internet at an affordable price for all for a robust e-commerce sector," he said.
Speaking as a panellist, Syed Yusuf Saadat, senior research associate of the Centre for Police Dialogue (CPD), said digital divide was a major challenge for the expansion of e-commerce.
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