The e-commerce sector needs a sound policy to ensure the credibility of all stakeholders and punish delinquent platforms, experts said yesterday, as online firms face a reputational crisis in the wake of questionable business practices by a few.

"The momentum of the growth in the e-commerce sector should not be stalled only for a few fraudulent platforms," said Barrister Tanjib-ul Alam, an expert on company laws.

"We need a proper policy that will ensure the credibility of all stakeholders and punish the delinquent participants."

He spoke at a virtual discussion on "Building a Sustainable Ecosystem for E-commerce" organised by the Dhaka Chamber of Commerce and Industry (DCCI).

The combination of the role of all stakeholders such as digital platforms, sellers, payment gateways, and policy-makers is essential to foster the e-commerce sector.

The standard operating procedure of digital commerce should be viewed as an organic document, and it could go through further modification, Alam said.

"The government can do its part to ensure logistics and automation to boost the sector."

The current e-commerce platform-based business model, in which customers order products on a platform where many sellers are connected, should be seamless. The connection between platforms and sellers should be more seamless and organised.

"This is a booming sector. But if a customer comes to buy something from an e-commerce platform and has a bad experience, they will not be encouraged to return to these platforms. So, building customers' confidence is important," Alam said.

"So, repeated and loyal customers are essentials to grow the industry further. You can't expand it only through discount hunters."

Highlighting the recent controversy over some e-commerce platforms, Fahim Ahmed, president of Pathao, said a massive fraud had been committed. 

The "money" is gone because it was never there, he said. "The net liabilities of the company are precisely equal to the losses made by the company." 

"Where did these losses go? It went for the deep discounts, the high salaries, the sports team sponsorship, the media buying, and the influencer peddling.

We must acknowledge that the amount of these liabilities is significant."

He demanded immediate actions from regulators. 

The platforms whose operations have come into question must not be allowed to operate, and bank accounts of these companies and their principals should be frozen, he said. 

Tapan Kanti Ghosh, commerce secretary, said the government did not want to impose strong regulations on the sector so that small entrepreneurs could come onboard easily.

"We introduced the escrow system for compliance, but the number of transactions fell."

Escrow uses a third party, which holds an asset or funds before they are transferred from one party to another. The third party holds the funds until both parties have fulfilled their contractual requirements.

Ghosh said consumers should not be greedy or discount hunters.

Khondoker Tasfin Alam, chief operating officer at Daraz Bangladesh, said the e-commerce sector had been made synonymous with discounts, but it was not sustainable for long-term growth.

"We have invested Tk 500 crore in developing logistics countrywide. We could get short-term gain in customer acquisition if we could provide hefty discounts with the money. But that growth is not sustainable."

Rizwan Rahman, president of the DCCI, said despite some recent challenges, sustainable development would come to the sector with the intervention of the government, regulators and stakeholders.

According to an estimate, transactions in the e-commerce sector were about $2 billion in 2020, which may go up to $2.5 billion in 2021. Transactions in the f-commerce segment totalled about Tk 320 crore in 2020.

Rahman said the 15 per cent value-added tax imposed on the e-commerce sector might hamper the growth of small investors.

If international e-commerce behemoths such as Amazon enter Bangladesh, it may create opportunities for the local cottage, micro, small and medium-sized traders and manufacturers, he said.      

AK Enamul Haque, a professor at the economics department of East West University, said regulating e-commerce should be done with more caution.

"We can't impose strict regulations only because of Evaly as it may hinder the growth of other entities. If you want to book Evaly, do it with other laws."

 "Too many regulations may push up the cost of doing business, and it will discourage small investors from entering the sector. Let them grow."

Ashish Chakraborty, chief operating officer at Nagad, Md Abdul Wahed Tomal, general secretary of the e-Commerce Association of Bangladesh, and Khorshed Anowar, deputy managing director of Eastern Bank Ltd, also spoke.