Merchants will suffer if regulation is imposed prematurely

Bangladesh is still at the early stage of e-commerce and digital marketplace. And I appreciate the fact that regulators are adopting policies to ensure consumer rights.

Nonetheless, it seems to me that a fair number of policies have been formulated to address their concerns that have been arising from certain practices of one particular e-commerce platform, which have been widely reported in the past.

The concerns are very legitimate, and it is essential for a platform to ensure credibility in building consumer trust. But, there are more direct ways to address those concerns than formulating a more extensive policy.

The draft policy for e-commerce mentions that products must be picked up within 48 hours of order and customers should get it delivered within 7-10 days. Moreover, you cannot order a product which is out of stock.

These things are all connected. You certainly cannot pick up an out-of-stock product within 48 hours.

To me, transparency is more important. Sellers should fulfil their contract obligations to their customers.

If you look at countries around the world, you will see there is a way to pre-order upcoming products. For example, when major cell phone manufacturers prepare to launch a new flagship device, they allow customers to pre-order that device.

And, that is understandable, because a new product has potentially limited stock and lots of people want to get a hold of it, so this might happen.

People who use e-commerce platforms are amongst the more aware consumers. They want to get hold of products that are the best in terms of quality or otherwise hard to access. The inventory for such products may not be readily available in our country.

The supply chain might get disrupted because of multiple issues like infrastructure challenges, Covid-19 challenges, etc. Hence, putting an arbitrary cap on the deliverability on inventory at the time of purchase is very limiting.

If you look at e-commerce platforms around the world, you'll find that most of them already have a largely developed infrastructure. For example, Amazon in the United States would not be able to achieve its fame, if it were not for the US postal service, or FedEx, UPS or other third-party logistics service providers. These logistics service providers provide the door to door delivery service that is necessary for these types of products.

Unfortunately, in Bangladesh, we did not have those three peer logistics service readily available, and we had to replicate that ourselves. In many cases, e-commerce platforms have developed their own logistics team, and in some instances, they take help from third-party logistics service providers.

Also, services of third-party logistics like the courier services are not adequate for e-commerce services. They are more point to point, and you need to collect products from their depots, which is a significant concern for the e-commerce business.

Therefore, what is happening is that you are relying upon other third-party logistics services that are new. And it takes a lot of time and a lot of investment to build an infrastructure, and a lot of technology to build up this whole system. This is because it is not only about point to point delivery inside Dhaka, it is also about places outside the capital. Nowadays, a large portion of orders are coming from outside Dhaka, and such orders account for around 30-35 percent of total orders.

Thus, you have to have the first-mile service to go and pick up the product, and your sorting facility and then rely on the line howl and finally you have to have the last-mile service. And you will need this last-mile service to the remote upazila levels as well.

Building such infrastructure over a short period is no easy task. For this reason, the policy that makes it mandatory to deliver products within 7-10 days of their orders appears very restricted and arbitrary. It also limits the type of business models that can be available and accessible to e-commerce platforms.

If you look at who are the e-commerce merchants in Bangladesh, you will see there is only one international operator here. We have a few local platforms and a long tail of small e-commerce merchants.

Even though we have seen a few reports that say this policy attempts to make a distinction between e-commerce and f-commerce, the reality is that the line is blurred. For example, many merchants may have their website, and also are selling products through social media. So, on whom would this policy be applicable?

If you impose these requirements prematurely, the potential of tens of thousands of e-commerce and f-commerce merchants who have been building their business for the past couple of years would be tamed. Therefore, we have to be very careful in this regard.

Also, we already know about the logistics challenge and limitations in delivering products to the remote areas of the country. In consideration of all these things, delivering products within 7-10 days appears tough.

Third-party logistics service providers usually pick up products a day later, although e-commerce platforms have a ready inventory. So, it takes more than 24 hours to pick up a product, and after that, the logistics companies have to sort out the products and all. So, there has to be some rational approach.

If you look at the USA, you will find multiple shipping options. You can choose the next-day shipping by paying some extra money or choose a usual shipping method which will take time. And, in case a product is out of stock at the moment, the website will show how long it will take to reach the product to you if you order it now.

Also, people will spend on quicker delivery service depending on the price of products. For example, if the cost of your ordered product is Tk5,000, you would be interested in investing around Tk200 for a same-day delivery option. But, if your basket size is of Tk500 or below, you will certainly not want to pay the amount required for the same-day delivery option. Thus, product prices also have an impact on delivery time.

What is much more important is transparency and accountability. We need to make sure that e-commerce companies fulfill their promises to customers, instead of coming up with one solution for all.