Muted response to e-commerce SOP reflects recent troubles in the industry
The Commerce Ministry has recently completed its task of formulating a set of Standard Operating Procedures for the e-commerce industry.
Yet the muted response to the SOPs reflect the significantly deeper concerns surrounding the industry, that have come to light recently in the form of troubling revelations about some of its biggest players, most notably Evaly, that have come straight from investigations carried out by an authority as important as Bangladesh Bank.
Given the seriousness of some of these concerns and allegations, a set of guidelines rooted in global best practices, that would essentially allow the rapidly growing industry to regulate itself.
Firms would be responsible for implementing the SOPs within their own organisations, while a failure to do so would not carry the threat of incurring a legal penalty. None of the SOPs in that sense would be legally binding.
Although this kind of light-touch approach can be entertained in a situation where the assumption is that one is dealing with good faith-actors, the recent revelations regarding Evaly, that include possible money laundering, have effectively blown the credibility of such a working assumption out of the water.
It suggests the more prudent route forward for harnessing the sector's potential may well be regulatory oversight by a competent authority.
Even so, the nearly 70-point SOP provides a reflection of the issues pertaining to e-commerce that vex even an administration that projects itself as the handmaiden of 'Digital Bangladesh'.
The most talked-about SOP states that items sold on e-commerce sites must be delivered to the buyer within a maximum period of five days of the payment being made, where the two parties to the transaction reside in the same city.
When the two parties don't reside in the same city, the maximum period allowed for the seller to deliver the goods to the buyer will double, to 10 days.
Additionally, it is stated that products shall be handed over to the delivery men or delivery agency within 48 hours of payment, and it needs to inform the buyers about it through telephone, e-mail and SMS. In case of the daily essentials, the delivery time would be shorter and it would have to inform the purchasers clearly about the delivery time while taking the purchase order.
The Digital Commerce Standard Operating Procedure was designed in line with the National Digital Commerce Policy 2020 (Amended). And the SOP was gazetted last July 4.
Notable points in SOP
The SOP states it is essential to mention all information and conditions clearly over the products and services on a website, marketplace or social media.
The conditions related to the sale and purchase, return of payment, return of products, or change of products, delivery system and delivery time and other conditions must be mentioned in Bengali words and displayed clearly. If needed, these conditions may be written in another language.
As an e-commerce platform, it must have clear and detailed descriptions on the products and the services for sale (like amount, quantity or weight, ingredients, colour, size, quality, model, country of origin and other descriptions) alongside price, delivery charges and delivery time. Buyers must be provided all the relevant details to help them make informed choices.
If it is rational to do so, an image and video of the product or demonstrating the service will be uploaded.
All information related to digital business transactions will have to be preserved for at least six years for the sake of transparency, according to the SOP. And the information shall be supplied to any authorised agency of the government, if it wants.
Trade license and VAT registration
All persons and organisations that run digital commerce facilities need to have at least one trade license, VAT registration, unique Business Identification number or personal account number, as well as display these in the marketplace or social media page. The foreign digital commerce organisation must be registered and take permission from the proper authorities to run business in the country.
No MLM business or networking business can be run on the digital commerce or e-commerce platforms. The business of narcotics and explosive items or other banned goods or services can’t run here. Besides, the arrangement of online betting or online gambling or participation in these are not allowed.
It needs to collect a license from the Directorate General of Drug Administration to sell medicine and medical items and a license is required from the explosives department to sell combustible items through the digital platforms.
No lottery or raffle draw can be arranged without prior permission of the government as per the SOP.
Clampdown on advance payments
In case of taking payments in advance, that Evaly reaped massively in return for hugely discounted prices, the SOP states products must be at least in the country. Even then, no more than 10 percent of the price can be taken as advance, in those cases where the product can’t be handed over to the delivery person or organisation within the 48- hour window.
Limits on advance payments can be waived however, if use is made of an escrow service approved by Bangladesh Bank - where the money is held by a third party rather than transferred to the seller, till delivery is completed.
All types of offers, discount or free service facilities must be mentioned clearly, if any.
Complaints from the buyers will be recorded properly. The company will initiate a resolution process and inform the complainant about its conclusions through phone, e-mail or SMS.
Commerce Minister Tipu Munshi, while announcing the SOP on July 6, was also careful to add that if needed, the SOP would be revised.