Palak urges caution over promoting start-up businesses

State Minister for ICT Zunaid Ahmed Palak has called on high-ranking government officials to be vigilant about promoting new firms amid the swirling controversy surrounding the e-commerce industry.

“Important government officials, ministers or brand ambassadors definitely need to be careful when it comes to promoting any kind of business or start-ups,” Palak said at the inauguration ceremony of a mobile app of Dhaka Reporters Unity on Wednesday. “We need to be on guard.”

The state minister has drawn flak on social media for a lack of foresight by promoting a few e-commerce firms that are now mired in controversy and for his continued backing of Evaly even when the organisation came under the scanner over its dubious schemes.

Since its inception in 2018, Evaly has racked up a debt of Tk 5.43 billion to its suppliers and customers.

Evaly’s system, which thrived on stupendous cashback offers, came under scrutiny after the Ministry of Commerce and Bangladesh Bank opened a probe into their workings and found a significant amount of embezzlement.

Addressing the Evaly scandal, Palak pointed out that world-renowned companies like Alibaba, eBay and Amazon had also started off by offering discounts on products but later made adjustments.

“The promise to provide incredible profits has created a huge abnormality. Those who had good intentions could not time things correctly,” Palak said.

“And there are also those who had wrong motivations and thought, ‘we’ll get the money and flee'. Whenever something new comes up, we try to use it to turn Bangladesh into a creative and innovative economy. Silicon Valley is a shining example of how to promote the digital economy. It took them 60 years to get where they are now.”

He reiterated the need for greater regulatory oversight of the embattled industry.  “What the government needs to do is, make the regulators impose some policies, methods and laws. We in the ICT department try to determine strategies when any start-up business arrives,” he said, while pointing to the consolidation of ride-sharing policies several years ago.

“We haven't barred anyone from opening up a business. We formulated strategies and policies, which went to the cabinet through the BRTA. These are being amended and refined.”

The state minister claimed that the policies formulated for the e-commerce sector by the ICT ministry in 2018 were bogged down by the commerce ministry.

“We presented a complete digital policy to the cabinet in 2018. As the cabinet decided that it was the affair of the commerce ministry, we did not keep it with us. The cabinet then handed it over to the commerce ministry.”

“The policy we made mentions how to update this, establish regulators. The ministry amended it in 2020.”

Palak also highlighted the need to make escrow services mandatory for transactions involving e-commerce platforms in light of its success in the digital cattle trade during Eid-ul-Azha

An escrow is an arrangement where the buyer and seller of big-ticket items, such as properties, large amounts of cash, shares, and other physical assets place them in the care of a neutral third party until the transaction is completed.

“In this case, a guideline must be put in place, dictating the maximum discount that can be offered on a product’s market price."

"The profit could be lower. Say you are selling a product for Tk 10 at a retail shop, but your expenditure drops as it is being transferred to the digital shop directly from the warehouse. In that case, you can sell it for Tk 9. ”

“You can set a percentage of discount on the market price which cannot be lowered. We need to set some policies like this.”

Palak touted the use of technology to deal with the threat of financial fraud in e-commerce. For this, the government set up the Interoperable Digital Transaction Platform or IDTP.

“We are hoping to set this off by 2021. As many as 13 banks and bKash have joined up and tests are being run. All transactions will then be done online and there will be accounts of all transactions made by people or organisations.”

“We seek a solution, not a way to avoid responsibility. We want to learn from the experience of different countries and the DRU can arrange a roundtable discussion on this.”

Using the DRU app that Palak inaugurated, the members of the organization can pay annual and welfare fund contributions.