Published On: October 26th, 20216.3 min read

It’s quite a rumble out there these days. The issue at hand here is eCommerce in Bangladesh and their legitimacy. It appears, for so many of us, distinguishing what is a scam and what is a genuine customer-business relation is getting cumulatively harder. And the dawning era of high-speed internet and faster connectivity isn’t exactly helping. Even pushing it in the opposite direction, one may say.

So, What’s going on in this seemingly complex area of e-commerce? What are the factors we need to be aware of when it comes to conducting a business online or benefitting from the services hereinafter? More importantly, What does the law say about all this?

We’ll try and break it down for you.

What is E-commerce?

Well, at this point everybody probably has an idea of what E-commerce is. If we’re going by the books, it’s any commercial transactions conducted electronically on the internet. In layman’s terms, it is the buying and selling of goods and services over the internet. It’s a relatively new way of conducting businesses compared to the age-old trading systems mankind always relied upon, but the underlying basic principles are pretty much the same. The big difference here is that the platform for buying and selling is, you guessed it, the internet. That made things convenient in a lot of ways, and it also enabled a new set of problems to arise. We’ll shed more light on it further in this article.

Enough about the definitions, let me entertain you with some statistics now.

  • The e-commerce sector has registered a growth of 36% year over year in the last quarter of 2020.
  • The biggest beneficiaries of this rise are the personal care, beauty, and wellness categories which grew by 95% year over year
  • Meanwhile, the electronics category saw a rise of 27% annual growth

Perspective from Bangladesh

eCommerce in Bangladesh | Blog | Nascenia

Only a few years ago, Bangladesh used to be a country where almost 100% of people would prefer old-school trading instead of online shopping. That situation changed dramatically upon the arrival of the coronavirus pandemic. Since the majority was bound to be stuck in their homes in a lockdown state, online shopping caught up in popularity real quick and online marketplaces started expanding exponentially. Now, it all happened so fast that the people had no idea what to expect and how these businesses are handled. A lot of scammers took the opportunity and might still be operational. Now, being a conveniently new marketplace, surely there is a lack of regulation and statutory laws to prevent shady businesses from thriving.

Some Problems

The lack of regulations leads to a multitude of problems. For starters, the most common one now is the ordered product not arriving or being delayed significantly. This primarily occurs because of businesses trying to sell products they don’t have direct ownership over. As they don’t acquire direct ownership before showing them as ‘in stock for the customers, it leaves a hole in the manageability of the products, and often this is where all goes wrong.

A significant portion of consumers is dissatisfied with the services. Numerous instances of breach of contract for the sale of goods have been reported regarding online business. Both buyers and sellers are having issues with these contract infractions that resulted in several payment anomalies.

Another issue is that a vast amount of these start-up businesses are breaking into the online market via Facebook or other social media pages. As we all probably know, it is not required to provide a lot of verifiable information for creating such a page. So, these business owners can have little to no regulation, and their identity can also remain ambiguous, Making sufficient room for fraud risks, misrepresentation, and infringement of consumer rights.

The Laws

eCommerce in Bangladesh | Blog | Nascenia

Bangladesh has initiated some statutory legislation in an attempt to minimize these scattered chaotic situations. The Digital Security Act 2018, Consumer Rights Protection Act 2009, and subsequently Consumer Protection Act 2019, Digital Commerce Operation Guidelines 2021, to name a few. Only time will tell if the proper implementation of these regulatory laws is practical or not.

The most recent legislation regarding e-commerce is the Digital Commerce Operation Guidelines 2021, following the revised National Digital Commerce Policy, 2020. Their goal is to assure transparency, obligations, and an answering-to to the government towards all online businesses. For that, they have described a bunch of rules regarding the completeness of e-contracts, the maximum delay of product delivery, procedure for making a formal complaint, et cetera. Read the official document in the given link for details.

Salient Points of the New Legislation for eCommerce in Bangladesh

e commerce in bangladesh growth and challenges | Nascenia BlogSo, within the new Digital Commerce Operation Guidelines, there are some laws that, if implemented and enforced properly, may substantially reduce the current disorderly situation of E-Commerce in Bangladesh. Let’s talk about one of the aspects, the laws that are channeled towards addressing the issue of delayed or not-arrived delivery of products.

In subsection 3.2.9 and 3.2.10, it is specified that a business cannot sell products they don’t have control over or in stock, or ‘available for delivery’ for uncountable service or products. This implies a mandatory prerequisite for direct ownership for either the platform or any contracted seller. For advance payment, a business cannot receive more than 10% of the price of the product if they cannot hand it over to delivery services within 48 hours unless it is through a Bangladesh Bank-approved escrow service. 

In subsections 3.3.1 and 3.3.2 they defined a fixed limit to ensure the delivery of the product, which is 48 hours for handover, 5 days for delivery within the same city, and 10 days for delivery to different cities.

In subsection 3.4.4 it is said that upon receiving 100% payment if a business cannot handover for delivery within 48 hours due to some reason that is out of human control ( Force majeure), the business must inform the customer within 48 hours and give the total amount of money back within 72 hours. There is also another detailed guideline for giving money back if the medium for payment is through online banking services or mobile banking, in subsection 3.5.1.

Strong enforcement of these guidelines has the potential to bring back balance towards the most common problem that is the delay or non-arrival of the product ordered. It will prevent businesses from selling products without acquiring direct ownership.

The Gap in between 

It is said that the Digital Commerce Operation Guidelines 2021 is in dire need of major revisions. Because: 

First of all, One major loophole is that the procedure of making a complaint by a customer is mentioned, it fails to detail instructions and procedures for follow-up on that complaint, leaving room for loopholes in the law. To address that issue, the guideline redirects this follow-up towards the Consumer Rights Protection Act (CRPA), 2009. The major drawback here is, CRPA does not apply for online transactions. So, fixing this loophole either on the direct guidelines or in the CRPA is an emergent necessity.

Another noteworthy one is about ensuring the ownership of the product that I discussed in the section above. There are still loopholes within the description of that legislation, like the fact that they didn’t directly mention the matter of product ownership in their terms, rather used the term ‘ in control of the product’ which is somewhat vague.

And so, a better solidification. regulation and implementation of statutory laws is a dire necessity to stabilize this e-commerce situation.

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