Regulatory 'failure' and lack of coordination among the oversight institutions led to the e-commerce scams, experts said, while renowned economist Prof Rehman Sobhan sees "governance problem" in the debacle of promising entrepreneurship.
They expressed the views at a virtual dialogue Saturday and came up with a slew of remedies for the authorities to cure, not kill the new-generation business dominated by young entrepreneurs having innovative ideas for startups.
Instead of formulating separate regulatory body for the business, as proposed, they underscored the need for capacity building and coordinated responses by the regulatory bodies to prevent recurrence of the digital frauds in the future.
The virtual dialogue on 'Challenges in the E-commerce sector: What should be done?' was hosted by the Centre for Policy Dialogue (CPD). It was moderated by CPD executive director Dr Fahmida Khatun.
Founder and Chief Executive Officer of Chaldal.com Waseem Alim told the audience that there was a huge deficit of trust when they started the e-commerce business but they had managed to gain people's trust over the last five years of their tireless efforts.
In terms of payment method in the overall e-commerce business, he said, around 70 per cent of the orders are non-cash wherein the major problem lies.
"We preferred cash on delivery. Almost 70 per cent of our products are delivered through cash-on- delivery method," he said.
He said the recent e-commerce scams put an adverse impact on the business. "It's hard to get new
customers now onto our platform. I hope this will get solved in the long run automatically".
Opposing the recent government move to form a separate regulatory body for e-commerce business, he said the existing rules and regulations are enough to ensure governance in the business.
Under the existing business climate here, he said, it is still harder to launch a startup business and new law or set of regulations might make the situation even further difficult.
"There is lack of diligence from buyers, media and institutions that are supposed to monitor the whole proceedings. I think these need to be addressed.
"This sector is very new. Let us not throw the baby into the bathwater," he added.
CPD chairman Professor Rehman Sobhan said the sector has been flourishing with the dominance of the young entrepreneurs, which is very impressive.
"I think what just happened (e-commerce scams) should not be an issue that would in fact frustrate the growth of entrepreneurship of these young people. This is a scam, this is not inherent in the system," he said
Many scams in various areas have been taking place over the years in the country and mostly originate from regulatory failure, Mr Sobhan said.
"It's governance problem rather than a problem of weak law or changing laws. It's a question of how you enforce them," he said.
"Big scams are operating at a level where you (scammers) are expecting to get protection. When it is finally exposed quite a long time after the event, suddenly it is discovered. None of the big scams has happened overnight," he added.
Barrister Tanjib-ul Alam was very critical over the role of Bangladesh Financial Intelligence Unit (BFIU) of the central bank.
Following media reports, the BFIU froze transactions of Evaly for a month but it did not extend it further, he said.
Getting clearance from the BFIU, he said, Evaly management aggressively marketed their business and customers thronged them seeing that BFIU found no unethical things in its business.
"The BFIU should have extended transaction-blocking regime alongside taking legal action. Unfortunately, it did not, and the Evaly management used it by converting the crisis into an opportunity," he said.
To attract more customers, he said, Evaly invested in Bangladesh Cricket Board (BCB) and media while e-CAB awarded Evaly as e-commerce movers.
Chief Executive Officer of Bdjobs and ajkerdeal AKM Fahim Mashroor said there are already too many regulations in the business.
"We don't need any further regulations. The issue is whether we are using the existing regulatory framework. We need to strengthen bodies like the directorate of consumers' rights protection and the competition commission," he said. Criticising the role of Bangladesh Bank (BB) in stopping such frauds, he said the errant e-commerce platforms were taking money in advance and holding it for six months for delivery.
"It's beyond e-commerce. It's a kind of investment scheme or parallel banking. BB should have intervened long ago to stop such possible frauds," he added.
Chief of Staff, ShopUp, Md Ziaul Haque Bhuiyan said the recent e-commerce scams would have stopped a long time ago if the overseeing institutions had properly monitored the bad platforms.
He said customers have been complaining against the so-called e-commerce sites with the directorate of consumer rights protection for the last one year.
"We saw complaint counts for some companies go over 1000. The directorate should respond proactively the moment the complaint counts crosses a certain threshold. We did not do that," he said.
He also said the advance payment collection was done through a payment-gateway system.
"The moment the advance payment hits the gateway, we can see the volume of transactions the particular platform received. If we can set a monitoring tool to check whether the transaction volume crosses a certain level for a company having not enough documents," he said.
"So, there needs to be an investigation about the company because something goes wrong in the company. We need such monitoring tools to prevent such malpractices in the future," he added.
Managing partner of Asix BD Afsana Asif highlighted the importance of standardised pricing of the products.
She said there are some companies who release products at such a rate to allure more customers that damage the market. "these are not monitored properly," she added.
Managing director and CEO of Brac Bank Selim R F Hussain said the lack of coordination among the stakeholding institutions had led to fraudulent activities.
"If the regulators respond proactively together, we might stop it," he told the virtual meet. Considering the situation, he said, the bank first suspended transactions of some 10 e-commerce platforms on June 22 last
General Secretary of the e-Commerce Association of Bangladesh (e-CAB) Muhammad Abdul Wahed Tomal said the main problem that is hurting image of the business is lack of coordination among regulatory bodies.
"It is a technical-oriented business but we don't see such coordination. It needs to be addressed as quickly as possible. The committees we suggested in the guideline should immediately be formed," he said.
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