Half of e-commerce platforms suffer from fraud customers: Study

About half of the small enterprises operating business through social media or other e-commerce platforms suffer from fraud customers, revealed a research paper presented today (24 February) at a session of the 7th Sanem Annual Economists' Conference (SAEC) 2024 in Dhaka.

The paper "Impact of social media marketing on business performance of small business enterprises during and post Covid-19 period: The case of Bangladesh" was presented by Saeefa Samsad Porshia, a post graduate student of Economics at Jagannath University, in a session titled "Growth Dynamics".

Professor Mustafizur Rahman, distinguished fellow of Centre for Policy Dialogue (CPD), chaired the session.

Mustafizur Rahman said, "We have seen exponential growth of SMEs, particularly online SMEs and e-commerce platforms during the Covid-19 pandemic. It is also equally true that many small industries went out of business."

He also said online product delivery services are quickly gaining popularity among people but it is also true that there are customer complaints about the commitment of the supplier and the quality of the products supplied.

He said access to the internet and cost of internet are also important for e-commerce.

Porshia said in her paper that there are 2,500 e-commerce platforms in Bangladesh, consisting of 95% small businesses, 4% medium businesses and 1% large businesses.

She also said there are over 5,00,000 Facebook-based business pages from Bangladesh and 2,00,000 of those are now actively doing business. E-commerce platforms in Bangladesh are growing at a 25% yearly rate.

While conducting a survey among 52 respondents, she found that dependence on social media platforms for small businesses increased significantly in the post-Covid-19 period.

About 41.5% of the respondents said boosting posts and pages on social media is beneficial for them.

Before Covid-19 pandemic, 26.9% entrepreneurs thought that advertising on social media by live streaming was beneficial.

In the post-Covid-19 period, 16% respondent strongly agree and 38% agree that live streaming is beneficial.

Before Covid-19, 7.5% strongly agreed that advertising through influencers and bloggers on social media was beneficial.

After Covid-19, 17% strongly agree and 43.4% agree that advertising through influencers and bloggers on social media is beneficial.

Porshia also said the average daily transaction by businesses on social media was Tk44 crore in 2020 and the amount increased to Tk1,600 crore by the end of 2021.

A new era of online business has started with multiple changes and the business model shifted dynamically towards the online sector due to the Covid-19 pandemic, she added.