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Bangladesh - Corporate - September 20, 2021

Revolving around greed …

Ibrahim Khalil: In the lure of a huge discount, the customer came in a daze, some people wanted to become rich in a few days by buying products from the e-commerce platform “Evaly” — their dream has now turned into a nightmare.
Mohammad Russell, the founder of Evaly, used to come to Facebook Live often along with attractive offers and flashy advertisements. He used to talk about reaching e-commerce in Bangladesh to a ‘different’ height. In the midst of criticism all around, ten days ago, even in a live, there was a tone of confidence in his voice, he heard the words of hope. But now this e-commerce entrepreneur is facing a different reality.
Russell, managing director of Evaly, a multi-billion dollar company built on customer money, and his wife Shamima Nasreen, chairman of the company, are now in jail on charges of customer fraud.
When the report of Bangladesh Bank came to light about the huge debt, all the promises of the last three years of the company’s entrepreneur Russell were washed away by the flood of anger and criticism.
Russell, who became a diaper importer from a banker and later became an e-commerce entrepreneur, has come up with a marketing strategy to attract customers with offers. In doing so, he has only increased the debt throughout the time, he could not give the products to the customers.
He has not only put himself under pressure by accumulating huge debts, he has also put his customers in danger, many of them are in a state of disappearance.
Russell has not only sunk himself into running a business to fall into the trap of temptation, but has also put the country’s potential e-commerce sector in a crisis of confidence.
Inspired by the success of Evaly, which started its journey in December 2016, some other e-commerce companies have created a net by cheating buyers to the tune of thousands of crores of takas.
Even there, thousands of customers have fallen into the trap of ‘huge discounts’ in the hope of making more profit.
Target was the youth
Young people were the main target of Russell’s aggressive marketing strategy tocapture the e-commerce market in Bangladesh. During this time, he did not want to think about the pros and cons of the business, the debt has increased, Evaly and e-commerce sector concerned.
However, the young entrepreneur hoped that if the number of customers increases, the situation will change as soon as foreign or domestic investment is received. But as the number of unsuspecting customers continues to rise, Evaly’s ‘hoax’ comes to the fore, and the situation changes.
Bangladeshi e-commerce customers have come through two options over the last two years – one: a decent discount and product delivery within the same week, and the second one is, up to insane 50% discount and delivery after months.
Naturally, an increasing number of customers were rushing for the second one, and that hurt the growth of the first group of regular e-commerce sites who finance any discount out of their own money instead of burning advances from customers.
Most of the regular e-commerce sites faced one-fourth to one-third drop in sales during the rise of errant platforms including Evaly, Dhamaka and Eorange as their unusual discounts attracted too many customers, said AKM Fahim Mashroor, a tech entrepreneur who founded e-commerce platform Ajkerdeal much before the rise of Evaly and suffered sales losses later.
“That was the short term impact, which is manageable in the long run,” he said, “The long term impact of the rise and apparent fall of the errant sites is worse – the trauma of the people, a dent on the confidence on e-commerce.”
The set of our core customers, mostly the early adopters, have been sticking to their purchases from regular e-commerce platforms and they still are, he said.
But, new customers, whom the industry needs most to grow up to its potential, seem to be shaky seeing all the bad news regarding e-commerce because of Evaly, Dhamaka and Eorange.
“Creating new customers is going to be tougher now as customers’ confidence to order online has been hurt,” he feels, “We need awareness campaigns communicating the difference between bona fide e-commerce and errant platforms in the name of e-commerce.”
Waseem Alim, co-founder and CEO of Chaldal, the pioneering grocery e-commerce, said grocery segment was not hurt much as customers prefer on time delivery and quality. But overall errant platforms distorted the e-commerce sector, he added.
“After many people’s bad experience in online shopping, it will be difficult for us to convert new people to shop online.”
He, however, said the recent course of events has not left any impact on their existing customers.
He opined that Ecab should be working on awareness building to let people know that the problem platforms are not the real face of e-commerce by any means.
“We need something for that, but no strategy is in place,” he said.
Nothing new, but the people of this country repeatedly step in to rotten snail to cut off their leg. Because, they look for rotten snails for precious pearls. But unfortunately, instead of pearls at the end they get. Then he forgot his greed for pearls and started rescuing the rotten snails. But what will happen to the one who knowingly stretched his leg even after seeing his predecessor’s leg cut off?
According to media reports, today’s e-commerce, multi-level marketing (MLM) companies and cooperative societies – all together 280 companies have squandered at least Tk 21,170 crore in the last 15 years. In all cases the way was to show the customer the greed for more profit and discount. This amount of money has been found on the basis of Bangladesh Bank, the investigation of the law enforcement agencies and the demands of the customers.
This includes Tk 2,600 cr in 2006 by Jubak, Tk 6,000 crore in ‘UniPay to You’ in 2011, Tk 5,000 crore by Destiny in 2012 and Tk 4,100 crore in 2008 to 2017 by Cooperative Societies.
In addition, 11 companies are not returning the money to their customers. These include Tk 1,100 cr by e-Orange, Tk 1,000 cr by Evaly, Tk 803 cr by Dhamaka, Tk 150 cr by APC World, Tk 110 cr by Ehsan Group, Tk 8 cr by Nirapad.com, Tk 31 cr by Chalantika and Tk 50 cr by Supam Products, Tk 20 cr by Rupsha Multipurpose, Tk 30 cr by New Navana and Tk 15 cr by Q World Marketing.

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