Building a healthy e-commerce industry requires strong action

The e-commerce sector in Bangladesh has immense potential; it must be protected from unscrupulous business practices. Photo: Collected

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The e-commerce sector in Bangladesh has immense potential; it must be protected from unscrupulous business practices. Photo: Collected

The recent crisis that has been created in Bangladesh’s emerging e-commerce sector is another example of financial fraud in the country. There have been complaints, for some time, about bad practices by a number of e-commerce companies. But these complaints fell on deaf ears and the companies continued their activities under the noses of the competent authorities. However, the problem could not be ignored for long as it became too important and inevitable. The owners of the Evaly e-commerce platform have been arrested on charges of fraud and legal action has been taken against them under the country’s applicable law. If found guilty, they could have to stay behind bars for three to seven years, according to legal experts.

But will it help those who lost their money? This is the most important question in the entire Evaly episode right now. Judging from our previous experience, recovering stolen money from customers is a distant reality. Although the measures taken by the authorities are positive, they will not solve the problems faced by those affected. The recovery of the money by confiscating Evaly’s assets seems to give some hope. It has been reported that the value of Evaly’s assets appears to be far less than the amount customers paid the company to purchase products. The legal battle is a long process and the people involved may not get their money back. Indeed, there have already been similar cases where the customers concerned have not been fully compensated. We remember the misappropriation of customer deposits by the sponsor of the Oriental Bank Ltd in 2007, and the collapse of the bank. Until today, many of the bank’s customers have not got their money back. Not that long ago, people were also fooled by tiered marketing firms who seduced innocent people into promising them higher returns on their deposits. The deception of these companies was discovered a few years after the start of their operations and the culprits were put behind bars. But the deceived customers did not get their money back. Many low-income people have lost their lifelong savings.

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Will Evaly customers be reimbursed? When and how? As the discussion of solutions to the Evaly problem continues, the government has called for compensation. It is indeed a dangerous proposition. Government money is taxpayer money, and that money is intended for the development of the country and to support the poor. We are still in the midst of the Covid-19 pandemic; many of the people in the country – who lost their jobs during the pandemic – have yet to find their jobs and earn a living like before Covid reached the country. Public money is used to support people during these difficult times, to create jobs and to create opportunities for people. Why would our hard-earned taxpayers’ money be used to make up for a crime committed by two greedy individuals? This will only encourage malpractice in this industry as well as in others. The government’s goal should not be to encourage bad practices, but to root out the greed of deceptive companies like Evaly.

Electronic commerce is a new but potential sector for Bangladesh. It is a source of employment for young people. In Bangladesh, the capacity of the labor market to absorb the entire young aspiring population is limited. This sector creates opportunities for them. But this prospect is not reserved for unemployed young people; many bright and promising young citizens, who could easily find good jobs but don’t want to work for others, have started their own businesses with innovative ideas. They created jobs for others; they gave examples of ethical business. Several successful e-commerce companies also attract foreign investment due to their reputation. With a large population, Bangladesh is an attractive destination for the e-commerce industry. As our per capita income increases, so does consumerism. He will continue to do so because the country should do better in the coming days. But the unethical practices of a few e-commerce companies have tarnished customer confidence. If this is not corrected, it will not only have a negative impact on youth employment, but also on the economy in general. Thus, policy makers must respond to customer concerns without delay.

With the exposure of fraudulent practices by a few e-commerce companies, the role of regulators is being called into question. The Ministry of Commerce and the Bangladesh Bank have critical roles in overseeing and monitoring these businesses. These embezzlements have been going on for several months. Why these were not followed up and stopped by the responsible services are questions which must be answered. In the future, coordination is needed between these bodies and other relevant bodies, such as law enforcement agencies, e-commerce associations, financial organizations that facilitate payments, and a protection service. consumer rights, for a healthy e-commerce sector. Following the Evaly debacle, the Department of Commerce released Digital Commerce Operation Guidelines, 2021. It contains instructions on product delivery, payment, customer information, and more. He also mentions that if companies don’t comply with the guidelines, the government can shut them down. In addition, consumers can lodge complaints with the National Directorate for the Protection of Consumer Rights and the competent courts. Some groups are calling for these guidelines to be more comprehensive and stricter. There are also suggestions for new laws. However, e-commerce businesses don’t want a separate regulator. They want facilitation, not regulation. Legal experts suggest that existing laws can be changed to take action against fraudulent companies. But having good laws is not the solution to the problem – good law enforcement is the key.

Since the exposure of the Evaly scam and the dishonest practices of several other e-commerce companies, the issue has become the center of our attention. Affected and agitated customers are in the streets to demand their compensation; News and expert analysis are also pouring in. Many have tried to say that customers who recklessly ordered from the e-commerce company in question were also greedy. It is an inappropriate analogy. The owners of Evaly became involved in the crime of embezzling customers’ money through their uncontrolled greed. In the process of their financial accumulation by deceiving customers, they were also involved in other unethical practices, such as sponsoring various organizations, giving gifts to important people, etc. On the other hand, some customers wanted to make money by purchasing products at a reduced price. prices and resell them to others at higher prices. There are also small customers who ordered products for their own use, but never received their products and their money was not refunded. Both types of customers were naïve: they did not realize that such reduced rates were impossible, and businesses cannot survive with such irrational practices. It cannot be an economic model. It is a model of cheating.

Considering the importance of the problem, it may continue to be the topic of discussion for a while, perhaps before another more serious incident occurs! However, this issue is significant not only because customers have lost over Tk 1,000 crore to Evaly; the problem is much bigger than that. It is the whole practice of getting rich overnight through embezzlement and corruption while receiving acceptance and even praise from our society. They occupy the covers of magazines, they are presented as role models and are discussed in the media and elsewhere, and they take center stage in programs attended by powerful people. They would shamelessly show off their wealth, while others would admire them. Sometimes the power of their money is stronger than the power of decision makers. They therefore remain above the law. They get away with crimes. The Evaly scam is another test case for policymakers to prove its commitment to ordinary people in the country.

Dr Fahmida Khatun is Executive Director of the Center for Policy Dialogue (CPD).

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