Alesha Mart goes kaput

When the crash of the Ponzi schemes disguised as e-commerce platforms came in the middle of this year and hapless customers were frantically trying to recover their lost money, one firm desperately tried to portray itself as not-like-the-others. But its end was only a matter of time.

Alesha Mart, once claiming to have backing from a strong group of companies founded by a businessman with deep pockets, Manjurul Alam Sikder, who has assets to continue subsidies for long, finally shut its office down on Thursday until "further notice".

What is more, four employees of Alesha Group, including Alesha Mart, told The Business Standard (TBS) that they did not get paid for the past three months.

Alesha Group has more than a dozen registered companies including some "profitable" ones which, the founder claimed, have been subsidising the e-commerce business to the tune of multi-billion taka.

To add to the credibility of their claim, the platform entered lavish promotions like acquiring the Bangladesh Cricket Board's title sponsorship rights at Tk32.5 crore and hiring cricket superstar Sakib Al Hasan as brand ambassador on top of its frequent splashy media advertisements.

The e-commerce platform on Thursday blamed some "outsiders" who assaulted its staff while claiming refunds in its office, and it announced not to resume operations until it is assured of security.

Now the question is why are the customers so angry?

The grounds for their grievance are quite clear – the company neither is able to deliver the ordered products nor can refund its customers for more than the last five months. Alesha had promised to deliver the ordered products within 45 days.

Alesha Chairman Manjurul Alam Sikder claimed his company is a unique one among the mushrooming pay-less-now and get-more-few-months-later e-commerce platforms and was cordially trying to refund its customers.

Going live on Facebook on Thursday, he tried to reassure his customers by promising refunds within 30 January.

Only Tk2 crore in banks

Thousands of Alesha Mart customers were searching for some light at the end of the tunnel as the company's bank accounts were frozen and they hoped that when the situation normalises, the company would pay them back.

But Alesha's business model proved to have been identical to the fallen enterprises in the sector, including Evaly, Dhamaka Shopping, E-Orange, Qcoom and many others, while investigators found some to have siphoned off customers' money abroad to benefit owners and some merely failed to deliver or refund their customers amid fund crisis.

The bad news for Alesha Mart's customers hit them recently.

The company now has only Tk2.07 crore in its frozen accounts as it withdrew Tk1,999.2 crore of the Tk2,001.28 crore deposited there since it began operations on 1 January this year, according to a Bangladesh Financial Intelligence Unit (BFIU) report dated 8 November.

Manjurul Alam Sikder claimed on Thursday that Alesha Mart owed money to only 7,000 customers and it was in process of refunding the small amount customers on a priority basis.

Earlier, he claimed that his company's money got stuck in payment gateways following the policy changes but he never mentioned any figure.

Speaking to a large number of Alesha customers, TBS learned that they believed they would get refunded as soon as Alesha got its bank accounts back in operation, and the gateways began releasing its merchant funds.

 The other assets of the founder might help in case of deficiencies, they expected.

How much does Alesha owe?

TBS contacted the Ministry of Commerce that regulates the country's e-commerce sector to learn about Alesha's liabilities. The ministry, however, is yet to have any data on the firm's liabilities.

AHM Shafiquzzaman, additional secretary to the commerce ministry who is heading the Central Digital Commerce Cell, said he was convinced that Alesha Mart shut its office due to security threat and that the company would refund its customers gradually as its owner had enough assets.

Alesha Mart informed the ministry that some customer groups demanding undue favours went berserk in Alesha Mart offices in the capital.

Officials at the commerce ministry said the ministry would write to the home ministry to ensure Alesha's office security if the firm applies for it.

Alesha owes several hundred crore taka to its customers for sure, according to estimates by some of its sellers and customers who spoke with TBS.

The platform published a delivery list of around 45,000 motorcycles ordered in its last campaign that ended in late June, they said, adding that more than half of the products worth several hundred crore Taka are still undelivered.

On top of motorcycles, customers ordered smartphones, home appliances and dozens of popular products with pre-payments for discounts.

Similar fate?

Evaly, the pioneer of Ponzi scheme-like e-commerce platforms in the country, collapsed with several hundred crores of taka in liabilities and its founders are in custody following customers' legal action.

Dhamaka Shopping – found to have siphoned off huge amounts on top of mounting liabilities – also collapsed and some of its senior officials have been arrested while its managing director and some of his partners fled the country.

Eorange, which surpassed all other platforms in terms of discounts, also went belly up with several hundred crores of taka in liabilities to customers and its founders are in jail. Besides, police officer Sohel Rana, who is a brother of the chief executive officer and is believed to be the mastermind of the scheme, was arrested in India while fleeing the country.

Qcoom founder Ripan Mia also is in jail along with his marketing chief following a customer's legal action.

Mia was claiming that his liabilities were less compared with his receivables from the payment gateway FosterPay, but the money was stuck in the gateway as the bank accounts of FosterPay were frozen by the BFIU on the ground of an anti-money laundering investigation against Foster's parent company SSD Tech.

More than a dozen similar platforms, including Anonder Bazar, Dalal Plus, BoomBoom, PurplexBD, Shophetic, that suddenly appeared this year to collect advances from customers for a long-cycle delivery of the promised products, faced the same fate as Evaly and others, leaving thousands of their customers high and dry.

All these firms collapsed in the July-September period this year, following some crucial changes in the national e-commerce policy.

Businesses that used to entrap discount-loving masses, some of whom even took discount hunting as a source of income, collapsed as soon as the commerce ministry suddenly came up with its Standard Operating Procedure for the e-commerce sector that barred platforms from collecting advances against products to be delivered in more than 10 days.

Platforms which were depending on fresh orders to clear liabilities collapsed as soon as their previous model of 25%-50% discounts and 30-90 days' delivery cycle disappeared.

The escrow system in electronic payments against e-commerce orders, which was introduced at the end of June this year, also disrupted the trade as companies became unable to use the advances to pay the bills against previous orders.

Like officials of all of the fallen online shopping platforms, the Alesha Mart chairman has kept on telling his customers that he would refund them all. But there is little likelihood of that happening anytime soon.