The term E-commerce refers to the activity of buying or selling goods, products, or even services over the Internet. E-commerce transactions range from the obvious stuff such as online retailing, online media stores, online shopping, etc. to the more indispensable matters such as digital payment, online banking, and even public administration procedures. In this article, we will focus on the necessary information regarding how to start an E-commerce business in Bangladesh.

 

Starting an E-commerce Business in Bangladesh

 

Types of  E-Commerce Business in Bangladesh

There are three kinds of E-commerce in terms of the composition of the product, which are as follows:   

1. Goods-oriented: These online businesses deal in tangible and physical goods or products over digital mediums.

2. Service-oriented: These online businesses specialize in providing services to a customer, be it between companies or just ordinary persons or vice versa;

3. Digital products oriented: These online businesses conduct legitimate businesses like the previous two except the goods or services they provide are entirely digital.

 

These online transactions are usually done in the following six ways

1. Business to Business (B2B): The “Business to Business” transactions include two more companies conducting business with each other and barely ever involve the final customers;

2. Business to Customer (B2C): The “Business to Customer” transactions involve a company or business selling their goods or services to prospective consumers;

3. Customer to Customer (C2C): The “Customer to Customer” model refers to the direct transactions conducted between the consumers themselves;

4. Customer to Business (C2B): The Customer to Business transactions refers to the providing of goods or services by a customer to legitimate businesses;

5. Business to Administration (B2A): Business to Administration involves the transactions between businesses and governmental or administrative bodies.

6. Customer to Administration (C2A): Customer to Administration refers to the transactions that are made between ordinary consumers and governmental bodies.

 

Starting an E-commerce Business in Bangladesh

The process required for starting an E-commerce business in this country entirely depends upon the nature of the business itself.

• Individual businesses: If your online venture is all about the Consumer to Consumer (C2C) model and you simply wish to trade with someone over the Internet, then not a lot of formalities are required. On the other hand, if you are actively selling any product or service through a website or page and you are the sole proprietor of the said business, then you may need a valid trade license and proper E-TIN setup.

• Companies or Associations: If your favoured business model is Business to Customer (B2C), where you want to set up a company or association to sell your goods or services, the laws currently in force in Bangladesh regarding companies, partnerships associations, etc. will apply to you.

• Domain & intellectual properties: Another important step of setting yourself up in the E-economy is to purchase a domain name. Being prepared with a valid domain, trademarks, copyrights, etc. will be instrumental in securing your intellectual properties among other things

• A typical online business in Bangladesh: A typical online business in Bangladesh begins with the creation of a website or a public page on a social media platform. The products or services to be sold are then catalogued on the website or page for the consumers to browse through. The final part of this initial process is to integrate a secured payment method, and there are quite a few good options to choose from.

• Payment methods: A lot of online stores provide a cash-on-delivery system which of course does not require any digital method of payment. On the other end of the spectrum, a good chunk of all the mobile banking in this country is currently being done through services such as Bkash, Rocket, Nexus Pay, etc., but you also have the choice to accept other services such as the various credit or debit cards, PayPal, Money gram or any other FIN Tech (Financial Technology) methods. The trick is to go with something that is easily accessible and has the greatest number of users.

As of now, it has been permitted by the Bangladesh Bank to transfer funds up to BDT 5,00,000 between two clients having accounts in the same bank through online facilities, provided that the transactions comply with the prevailing Money Laundering Prevention legislations and related government circulars.

In the event of any legal issue arising from these ventures, however, it is always best to seek professional help. As per the laws currently in force in Bangladesh, partakers in the E-economy are entitled to many legal remedies that can be availed with the least amount of hassle. The prospective dangers of conducting E-commerce businesses will be further discussed in this article.

 

The Dangers of E-Commerce

Being a relatively recent development in the economic history of Bangladesh, many potential issues can arise from an online venture. Some of these issues are briefly discussed below –

1. Credit and guarantee: A good number of higher-end purchases are made through credits such as EMI or other forms of instalment plans. If the customer defaults, legal actions may be necessary in some cases.

2. Financial frauds: Financial frauds such as credit card fraud, use of unauthorized payment methods, etc. happen all the time when it comes to E-commerce in Bangladesh. Established under the Money Loan Court Act 1990, the Artha Rin Adalat is a judicial body that deals with the recovery of money loaned to people via public sector financial institutions.

Financial frauds committed in e-transactions such as credit card frauds etc. can be adjudicated in this court. There are several other legal remedies available to a potential victim of fraud under the laws of Bangladesh such as the Digital Security Act, of 2018 among others.

2. Return of products or Non-delivery of Products: E-commerce businesses periodically recall products that are returned by the customers for various reasons, some of which are legitimate issues such as the size mismatch of clothing products while others are as vague and illogical as it can be.

Other than the financial blows sustained by the vendors, reasons such as the return of products or non-delivery of products can also be detrimental to the buyers. Under the laws currently in force such as the Sale of Goods Act, of 1930, etc., online sellers and buyers are entitled to a plethora of rights that can be enforced legally.

3. Quality of products: The E-economy of Bangladesh has a long history of vendors providing unsatisfactory goods or services to the customer. This is mainly because the customers do not get to check or verify what they are buying before the actual delivery takes place. This has resulted in sellers delivering damaged, expired, or unusable products in the end.

Issues of damaged goods or goods in lesser quantity than originally agreed upon can be brought to legal action under the governing laws of the country such as the Consumer Protection Act, of 2009, The Sale of Goods Act, of 1930, The Contract Act, of 1872, The Penal Code, 1860 and the Standard of Weights & Measures Ordinance, 1982, etc.

4. Adulterated goods: Be it provided by a consumer or a company if an online vendor is responsible for dealing in adulterated goods and products then he is subject to legal consequences. The Special Powers Act, of 1974 provides legal provisions relating to the adjudication of sellers who deal in adulterated foods, drinks, or other products.

5. Infringement of Intellectual Property: Due to the state of the basic economy and the newness of information technologies, there is a general disregard among the people of Bangladesh for intellectual property laws, especially when it comes to digital products. For example, only a fraction of internet users realize that the songs or videos they download from websites regularly are subject to copyright.

The laws governing the matter of Intellectual Property such as – the Copyright Act, 2000, the Patent and Design Act, 1911, the Trademarks Act, 2009, the Geographical Indication (Registration and Protection) Act, 2013, etc. are applicable in issues arising out of an E-commerce venture.

6. Exploitation: The very nature of the techs used for conducting various online transactions leaves room for loopholes that can be exploited for illicit gains. Credit or debit card fraud, digital forgery identity fraud, infringements of authority, unauthorized access to data and privacy, etc. are some of the examples that can seriously hamper the livelihood of an individual or a business. In addition to careful coordination on the part of the users, legal actions are also important in the aftermath of such occurrences.

 

Legal Advice regarding setting up a private limited company in Bangladesh by CLP:

The Barristers, Advocates, and lawyers at CLP in Gulshan, Dhaka, Bangladesh are highly experienced at assisting clients through the entire process and legal provisions relating to the setting up of your E-Commerce business in Bangladesh and the safeguarding of your rights and interests in case of any conflicts.

For any queries or legal assistance, please reach us at E-mail: info@counselslaw.com Phone: +8801700920980. +8801947470606.

Address: House 39, Road 126 (3rd Floor) Islam Mansion, Gulshan 1, Dhaka.