Online sales of counterfeit products weigh on e-commerce industry: experts

The Daily Star September 25, 2020
Star Business Report

Protection of consumers’ rights and brand value of reputed companies has become a major challenge with the increased use of e-commerce platforms as a major engine of online sales and financial transactions, industry experts said.

The e-commerce platforms have been mushrooming in the country and every day crores of transactions take place without following the legal issues religiously and without ensuring consumers’ rights and compliance.

Moreover, delivery of counterfeit products—especially fast moving consumer goods (FMCGs)—and transactions with fake accounts have become a headache for the consumers, users and reputed companies.

In many cases, counterfeit products are sold by unauthorised sellers, which in turn is hurting the image of the reputed brands and their customer base, they said.

Senior officials of different companies, users and entrepreneurs of different online platforms raised the issues at a virtual discussion on “Digital economy and intellectual property rights protection” organised by Marico in collaboration with different trade bodies and business chambers.

If consumers are cheated by one e-commerce platform, the whole industry will suffer because of a trust deficit, said Waseem Alim, CEO of Chaldal, a leading e-commerce platform.

For instance, many fake or lookalike hand wash items using the brand names of reputed companies came to the market after the Covid-19 outbreak, he said.

“Manufacturers should be aware of such counterfeit products.”

It is a must to use the Bangladesh Standards and Testing Institution’s certification while selling goods or FMCG through e-commerce platforms, he said.

“But many superstores in the country are flouting the rules.”

During the Covid-19 period, online transactions and the use of e-commerce platforms have gone up significantly in the country, said Syed Almas Kabir, president of Bangladesh Association of Software and Information Services.

The lockdown period was a blessing for the e-commerce, he said.

Currently, the country has 2,500 e-commerce sites, which sell $2.07 billion worth of products a year and Bangladesh is the 46th largest in the world in terms of e-commerce revenue.

Some 80 per cent of the consumers live in urban areas and 80 per cent of the payments are done through cash on delivery, Kabir said.

Bangladesh has 15 active mobile financial service operators at present with 67.5 million registered subscribers. Over Tk 63,000 crore change hands in 31 crore online transactions a month.

Moreover, Bangladesh has already become the second largest supplier of online labour globally, according to the Oxford Internet Institute.

About 600,000 active freelancers are currently working in Bangladesh regularly, Kabir said.

Some of the best practices for consumer protection in digital economy are maintaining the accuracy of information by providing clear information on the quality, quantity, authenticity and the prices of goods and services, said Ismat Zerin, head of legal affairs at Daraz, another leading e-commerce platform.

Helping the consumers make informed choices according to individual wishes and needs is also one of the best ways to protect the consumers’ rights under the digital economy, Zerin also said.

One in every two items bought online is FMCG in India, said Pratik Gupta, head of digital transformation of Marico Group.

The FMCG contributes about 11 per cent of online sales and the FMCG online has been growing seven times faster than FMCG offline, he said.

He also said the counterfeit market in the FMCG sector is increasing at 44.4 per cent per annum and it is obstructing the growth of manufacturers.

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