Commerce ministry issues show-cause notice to Daraz

The commerce ministry on Thursday served a show-cause notice on Daraz Bangladesh, one of the largest e-commerce platforms in the country, accusing them of organising an illegal campaign to attract customers.

“A show-cause notice has been issued to Daraz, seeking explanation as to why legal action will not be taken against the company for the 11.11 campaign, which goes against the law,” the ministry’s Additional Secretary AHM Shafiquzzaman said.

The platform – owned by China’s largest e-commerce firm Alibaba Group – launched the lucrative campaign from November 1 flouting regulations, he added.

Daraz had earlier applied to the commerce ministry seeking permission for the annual campaign titled 11.11 on October 6. In response, the ministry on November 4 asked Daraz not to carry out the campaign, which included offers such as Tk 1 Game and Spin the Wheel.

The ministry mentioned that the campaign violates Consumer Rights Protection Act, 2009, Competition Act 2012 and Contract Act 1872. However, Daraz moved forward with the campaign, despite the ministry’s directive not to do so.

Shafiquzzaman further said, “Commerce Ministry’s panel lawyers recommended sending a show-cause notice to Daraz for violating government regulations. If we find the company’s response unsatisfactory, we will direct law enforcement agencies to take action accordingly.

“We will not spare any e-commerce platforms showing malicious activities. If found guilty, we will take strong action against Daraz.”

Responding to a query, Daraz’s Chief Corporate Affairs Officer Hafinul Quddus Rusho said, “This is a global campaign which we organise every year. We had also informed the commerce ministry about this.

“They then had sent us a notice stating that the Tk 1 Game and Spin the Wheel is illegal. We have been running those games since November 1 to inform our consumers about various products. After a meeting with the ministry on November 3, we followed their directive and stopped the Tk 1 Game.”

Rusho added that Daraz has responded to the ministry’s notice requesting them to explain where exactly the platform has violated the law.

Daraz Bangladesh, a concern of the Chinese e-commerce and retail giant Alibaba Group, sold products worth Tk 108 crore from 12am to 2pm on Thursday during its 11.11 campaign. The sale of last year’s 11.11 campaign was Tk 80 crore, the platform told the media.

Daraz is luring customers with lucrative offers on cars, motorcycles and televisions.

The platform is even offering a Tk 16 lakh car as a prize for their quiz. Some of their other prizes are - Silver Toyota Axio (2016), Speedoz’s GPX-Moon 165 motorcycle, TVS Apache RTR 160cc 4V motorcycle, TVS Apache RTR 160cc Motorcycle Race Edition.

The day-long 11.11 campaign held on Thursday featured more than 2.5 crore products with attractive discounts.

Their offers included Mystery Box, Surprise Voucher, Guess and Get It Free, Big Buy Win, Thousand Taka Discount, Shake Shake – Seller Double Taka Voucher, Flash Sale, Big Buy Win, 11’Clock Deals and Add to Cart Giveaway. It also offered up to 75 percent discount on products.

It should be noted that Daraz has been facing accusations of irregularities from consumers for some time, and facing complaints submitted against the platform with the Department of Consumer Protection.

In their complaints against the e-commerce giant, consumers mentioned receiving sub-par quality products, ordering one product and then receiving another, delayed deliveries, and poor customer service.