Meanwhile, according to a report published in BLiTZ, seeing massive prospect of ecommerce sector in Bangladesh, a country of 180 million people, a giant ecommerce company is looking for buying shares by investing initially US$ 1 billion either in Bangladeshi ecommerce company Dhamaka Shopping or Evaly. Expressing readiness, Chief Executive Officer of the global ecommerce giant said: “Bangladesh is a massive market for ecommerce. Writes Vijaya Laxmi Tripura
According to media reports, Rapid Action Battalion (RAB), the elite force of Bangladesh Police has arrested Shamima Nasrin and Mohammed Rassel, Chairman and Managing Director of country’s largest “ecommerce” company named Evaly. These arrests took place hours after an individual named Arif baker filed a case with Gulshan Police Station claiming that the company has failed in supplying goods worth BDT 310,000 despite receiving payment few months ago.
During the raid, about 50 people, identifying themselves as Evaly clients, demonstrated outside Rassel’s home demanding his release.
They said the law enforcers should not have arrested him because he had sought time to deliver their products and the customers would have benefitted had he been given the time.
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.
Evaly appeared to be lying low after the government announced new steps to regulate digital marketplaces, leaving scores of disgruntled customers in the lurch.
The Anti-Corruption Commission is also investigating claims from the commerce ministry that Evaly misappropriated BDT 3.38 billion from customers and merchants, and began investigations on Jul 8.
The court, on Jul 15, ordered a travel ban on Rassel and his wife, following a plea from the anti-graft watchdog on Jul 9.
Earlier, a large business conglomerate named Jamuna Group had backtracked from investing BDT 10 billion in Evaly, while it was later revealed by the company that Jamuna is going to launch its own ecommerce business soon.
Evaly on July 27 told the media that Jamuna Group would invest Tk 10 billion in it, and for now the amount would be Tk 2.0 billion, under an agreement they had reached with the industrial conglomerate the same day.
According to the commerce ministry, Evaly had BDT 5.43 billion in current liabilities, including BDT 3.11 in customer liabilities, until July 15 this year.
However, in its wealth statement, the e-commerce company claimed it has BDT 1.21 billion as assets, which could make up for 22.30 per cent of its debts.
Meanwhile, according to a report published in BLiTZ, seeing massive prospect of ecommerce sector in Bangladesh, a country of 180 million people, a giant ecommerce company is looking for buying shares by investing initially US$ 1 billion either in Bangladeshi ecommerce company Dhamaka Shopping or Evaly. Expressing readiness, Chief Executive Officer of the global ecommerce giant said: “Bangladesh is a massive market for ecommerce. We have been closely monitoring business activities of a number of existing ecommerce companies in the country, and our initial target is to acquire shares either in Dhamaka Shopping or Evaly, although we also are collecting information on few more ecommerce establishments such as ChalDal, Alisha Mart etcetera”.
The CEO said, few years ago, Alibaba has invested significant amount in a number of ecommerce companies in a number of Asian countries, while both Alibaba and other ecommerce giants are looking for prospects of making similar investments in Bangladesh, India and Sri Lanka.
Commenting about Dhamaka Shopping and Evaly, the CEO of the global ecommerce giant said “Both the establishments actually has massive business prospects once they can properly formulate business strategies. But unfortunately, the current business plan of Dhamaka Shopping and Evaly are slipping towards the business style of MLM (Mult-Level Marketing) or Ponzi Scheme. This is not the perfect way for any ecommerce company, as there is distinctive difference between ecommerce and MLM Ponzi scheme”.
He said, “Bangladesh, being a country with 180 million population is definitely a huge market for the genuine ecommerce platforms. Another important positive factor is, during the current pandemic situation majority of the consumers of various types of items are buying their required items from ecommerce sites instead of physically visiting any shop. This trend will continue even after the pandemic is gone. Pandemic has changed the habit and daily lives of people in every walks of lives”.
The CEO further said, initially though they are looking for buying shares in Dhamaka Shopping or Evaly, if these companies finally fail to sustain the current challenges which has been created due to their wrong business strategies, the global ecommerce giant may launch their own branch in Bangladesh.
The success story of Chaldal
Founded in 2013, Bangladesh’s Chaldal was one of the first grocery delivery startups in the world to use the “dark” store model, picking up orders from its own warehouses instead of retail stores. Now the company says it is the country’s second-largest grocery player and the largest grocery e-commerce platform, with 27 warehouses located in four cities. Chaldal plans to expand into 15 new cities with a recently closed $10 million Series C. The round was led by Taavet Hinrikus, co-founder of Wise; Topia chief product officer Sten Tamkivi; and Xploration Capital, with participation from Mir Group.
When Chaldal launched in Dhaka eight years ago, it first picked up orders from local grocery stores. But most retailers in the city are very small and Chaldal was unable to guarantee items would be available for its customers. As a result, it decided to start building its own network of warehouses.
“When we started, Instacart was still the dominant model, but we took a different stand and said we want to deliver from our own warehouses because that leads to better inventory management,” co-founder and chief executive officer Waseem Alim told TechCrunch.
Now the company, a Y Combinator alum, has 27 warehouses located in four cities (Dhaka, Naryanganj, Chattogram and Jashore). It will expand to 15 new cities and plans to open 50 warehouses by the end of this year. In addition to its flagship grocery deliveries, Chaldal will expand GoGo Bangla, its on-demand logistics service for small e-commerce businesses, and the Chaldal Vegetable Network, which connects farmers directly to retailers. It also has plans to launch a direct-to-consumer pharmacy.
Chaldal claims that it has generated US$40 million in revenue and performed 2.5 million orders over the past 12 months, growing about 120 percent year over year. It currently sells about 8,500 kinds of products and wants to expand that to 30,000 SKUs by December.
Huge prospect of ecommerce in Bangladesh
With the proven record of tremendous success of Chaldal, which has already generated US$40 million in revenue this year, with the growth rate of 120 percent, for large ecommerce platforms such as Evaly and Dhamaka Shopping, overcoming the current crisis is not a mission impossible. Rather they can easily overcome the existing crisis by overhauling business strategies in particular. This is essential for all those existing ecommerce companies in Bangladesh especially as large foreign investors are already looking for investing hundreds of millions of dollars in this sector.
Now the question is – can Evaly, Dhamaka Shopping and similar ecommerce companies overcome the current crisis and transform the crisis into opportunity?
The answer is both YES and NO.
First of all, the top management of the Bangladeshi ecommerce companies should know, even companies like Alibaba had faced crisis during its early days, which they have successfully overcome. This had opened the opportunity for Alibaba is attracting billions of dollars of foreign investment. With Alibaba, hundreds and thousands of people had been ruthlessly scammed and cheated by its members (both verified and unverified) for years. Still it did not challenge the very existence of Alibaba. For Evaly, Dhamaka Shopping and others, it is first of all important to determine whether these are truly ecommerce companies or simply Ponzi Scheme. The pattern of activities of these companies would more look like Ponzi Schemes instead of ecommerce firms. This major obstacle should be corrected by the top policymakers of the companies, which would open huge prospect for them. Unless it is done forthwith, existence of Evaly, Dhamaka Shopping and others would be difficult, if not impossible.
For the sake of reshuffling their business strategies and emerge as genuine ecommerce companies, government needs to grant at least one-year grace period to each of them. At the same time, it is important to stop the top policymakers of these companies from leaving the country. Keeping the owners of the ecommerce companies, including Evaly in jail is not a solution, as this would never create the opportunity for the people who already have their hard-earned monies into these companies. Evaly’s Chairman Shamima Nasrin and Managing Director Mohammed Rassel should be released on bail with written pledge of resolving the existing crisis within one year and gradually clear the debts. At the same time, they should be granted opportunity of continuing negotiations with prospective foreign investors in their companies.