State of e-commerce: Con trick undercuts roaring rise

Fabulously growing e-commerce business in Bangladesh, which boasted a record growth of 300 per cent during the Covid-19 pandemic, now loses its shine for multiple factors that conspicuously include confidence trick on consumers.

Many people, especially new buyers, are getting hesitant on buying from e-commerce platforms after a row of scams robbed them of their hard-earned money.

Sources say consumers are also raising the question of violation of privacy of their personal data confided to the e-commerce businesses.

"Some corrupt businesses have ruined the prospect of tapping huge untapped potential of e-commerce business in Bangladesh," says many an insider in the e-commerce circles.

The industry people have observed a fall of 15 per cent in expected growth, year on year, of e-commerce business in the country.

They, however, list numerous external factors like a decline in import of commodities, global supply- chain disruption, and erosion of real wages for the bites of high inflation, alongside loss of confidence of a section of potential consumers, as the adversities facing the new-generation entrepreneurs.

Market sources say the e-commerce business had continued to grow by 50 to 60 per cent just after the pandemic until 2022. But its growth momentum has faced a setback since January 2023, in a change of fortune lately for both local and global financial crises.

Though the country witnessed a mushroom growth of online-shopping platforms using the facebook, consumer-data privacy remained a largely ignored area, eroding confidence of some conscious buyers.

Jahangir Alam Shovon, Executive Director of the e-commerce Association of Bangladesh, blames a section of staff members of e-commerce business for indulging in data-trading by supplying consumer information of a new venture.

"I have received an offer to purchase some 3.5 million of consumer data," he says about the insidious con trick.

Market rate of data of each consumer is 10 paisa to Tk 10 each in trading by a section of e-commerce businessmen, he adds.

He figures out that the number of cheated consumers should be much higher than reported as many refrain from lodging complaints.

"A section of black-money holders uses e-commerce platform to formalize their undisclosed income by making fake order on the online portal," he says in a disclosure of new dimension to the shop-less shopping in an unfolding meta-verse human society is being placed on.

Some of them are also bribing influential quarters by transferring money through using online platforms, he goes on saying about flipside of e-commerce brouhaha.

"Data-privacy of the e-commerce businesses has to be maintained strictly by devising relevant law in a bid to secure consumers' data and confidence," the sector leader suggests.

Farhana Zubair, a banker working with a commercial bank in the capital city, Dhaka, wonders how people get her contact number or e-mail to send variegated offers.

"I purchased some jewelry from an online shop yesterday, and after confirming the order, several massages started to come on my cell phone with various offers," she says.

The businesses, having a hefty Tk 400 billion worth of market, have seen a decline of orders by 40 per cent owing to reduction in its 'basket value'.

Basket value before the COVID-19 onslaughts was 850 to 950 per order that jumped to an average of Tk 2200 during the pandemic that pushed people under lockdowns.

However, the value has come down to Tk 1450 in the post-pandemic period until 2023.

Basket size refers to the number of products sold in a single purchase.

Apart from the economic factors, the e-commerce businesses also lose consumer confidence following scams in this sector, says AHM Shafiquzzaman, Director-General of the Directorate of National Consumer Rights Protection (DNCRP).

He notes that the e-commerce business has not got institutionalized in Bangladesh yet due to absence of a dedicated authority to regulate the businesses.

"It expanded widely during the Covid-19 lockdown period but the business is not a disciplined one here," says the chief of the watchdog meant for thwarting acts of defrauding consumers such as cheating at weight, price and quality.

He mentions that the digital commerce was under supervision of ICT ministry earlier that is now under monitoring by commerce ministry.

However, he said, the World Trade Organisation (WTO) cell at the ministry was authorised to supervise it under a project.

The MoC is supervising e-commerce on the sidelines of its regular activity.

"There is no separate authority to regulate the e-commerce business-it runs haphazardly," the DG remarks regarding apparent freewheeling of the trade worth billions.

Talking to the FE writer, a number of consumers in low-and middle-income groups explained several incidents of how they became cheated by the e-commerce businesses.

"We prefer visiting outlets rather than buying from online shops after being cheated several times by various online platforms," said Rehana Khatun, who is also a private service-holder.

She has observed that initially e-commerce businesses attracted many people due to several offers, but it could not uphold the confidence of common people.

As such, she thinks, people in low- and middle-income brackets, already battered by surging commodity prices, prefer not to take risks of losing money in e-commerce business.

Mashiat Prapti, a BBA student of city's North South University, ordered a Kurti (shirt for females) from an online page but she got substandard product which does not match the picture of the advertisements.

"When I complained about the product on the same page, they did not respond. And after a while, the page disappeared from the facebook," she said about an apparent deceit.

Mr Shafiquzzaman of the DNCRP, who is working dedicatedly to ensure consumer rights amid market waywardness for alleged acts of oligopolies, believes it is not possible to track the facebook portals of e-commerce business. Public awareness is the most important thing before buying from the facebook pages.

Using the e-commerce platform, multi-level marketing or MLM businesses have also allegedly been hoodwinking consumers in Bangladesh since 2018.

Khondokar Tasfin Alam, Chief Operating Officer of Daraz Bangladesh Ltd, observes that purchasing power of people has shrunk under inflationary pressure while supply-chain disruption due to the Russia-Ukraine war has left an impact on grocery e-commerce business.

"I'll behaviour of some platforms has jeopardized the e-commerce business as some consumers have lost trust on online business," he said.

E-commerce business for both food delivery and grocery has shown a downturn in 2023 due to fall in import of goods.

Mr Shovon of the e-CAB further mentions that only 1.0 per cent of the retail consumers are involved in online shopping out of its total consumer-base of 5.0 per cent.

Before the COVID-pandemic hit the country, on March 2020, year-on-year growth in e-commerce business was around 25 per cent, he says citing data of the e-CAB.

It has been found that there are only 20-percent businessmen directly involved with e-commerce business while the rest are doing online business on the sidelines of their regular work.

The growing e-commerce sector could not play any significant role in employment generation yet as facebook (meta) controls its 25-percent business.

However, e-commerce has helped to generate the scope of part-time employment for students and the unemployed.

According to the e-Cab data, around 350,000 people are directly involved with e-commerce businesses while 200,000 more are part-time or homemakers.

The DNCRP chief said the number of e-commerce business is on the rise in Bangladesh too as in other countries in the world.

The number of members of the e-Cab association has increased from 900 in 2020 to 2100 in 2023.

Some 23 per cent of consumers of e-commerce business are from rural areas while the rest are city-based.

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