Appetite for purchases through online platforms using cards declined in July this year from that a month ago, as people have become cautious in placing orders following a series of scams centring e-commerce companies having started to come to light.

In July, customers spent Tk 740 crore on products and services, which is the lowest in five months and 42 per cent less than June's Tk 1,277 crore, according to data of Bangladesh Bank.

Customers became cautious owing to breach of commitments in delivery of goods by some e-commerce platforms, said Md Abdul Wahed Tomal, general secretary of the e-Commerce Association of Bangladesh (e-CAB).

 "It appears that the overall situation in the e-commerce sector has affected the market. Funds of many customers are stuck and they are in uncertainty about refunds," he said.

"It is true that allegations of anomalies by some e-commerce platforms affected confidence but we hope people will regain confidence as the government has framed standard operating procedure for e-commerce."

There was, however, a 15 per cent year-on-year growth in July. In the same month last year, people bought products worth Tk 640 crore.

In terms of the number of transactions, consumers placed 2 per cent less orders in July than that in June. Total number of transactions through cards was 24.3 lakh in July, down from 24.8 lakh in June, according to Bangladesh Bank data.

Merchant payment through mobile financial services also dropped in July from the previous month, data from Bangladesh Bank showed. 

"We did not experience the kind of impact that the overall industry experienced in July. But if we look at August and September, we see customer and business growth," said Tajdin Hassan, chief marketing officer of Daraz, one of the leading online platforms.

Industry operators said countrywide lockdowns to combat the rising infections of coronavirus in July also affected e-commerce transactions both by cards and MFS. The month also coincided with the Eid-ul-Azha festival when demand for products other than certain items was low.

This was the first time since September last year purchases through online marketplaces declined as reports of anomalies of some e-commerce platform became public.

E-commerce had been growing over the last decade and the growth accelerated after rising infections of coronavirus disease forced people to stay at home and place orders online to buy goods and services.

Customers became cautious after a Bangladesh Bank inspection report on Evaly found that the e-commerce platform had a huge mismatch in asset and liabilities.

The central bank found that Evaly had over Tk 400 crore in liabilities against current assets of Tk 65 crore as of March 14 this year -- a gap that prompted the commerce ministry to ask it to explain the whereabouts of around Tk 338 crore that the platform owed to customers and merchants.

Law enforcing agencies arrested Evaly Managing Director Mohammad Rassel and Chairman Shamima Nasrin last week while top officials of another e-commerce platform, Eorange, were also sent to jail and brought under trial on allegations of embezzling customers' money.

Bangladesh Bank data showed that transactions through e-commerce platforms crossed the Tk 1,000 crore mark for the first time in May this year as people found online purchases to be convenient and helpful in the fight against the Covid-19 pandemic.

Transactions hit the highest in June this year in terms of value since December 2010 when customers bought only Tk 185 crore worth of goods and services online.