E-commerce bill finally prepared, but has too many problems, say stakeholders

Recently, Manish Ghimire from Maharajgunj, Kathmandu bought a vaporizer from a well-known e-commerce platform for Rs.1500. He later found out that the vaporizer he had purchased was available at Rs 1,000 in the market.

“I bought the vaporizer online because a discounted price was offered and thought it was worth buying,” Ghimire told The Post. “I didn’t think to complain because it was already late when I learned the real price. I was also unaware of the return policy.

In the absence of a law governing e-commerce, there have been customers like Ghimire who have complained of being cheated in terms of getting damaged products, getting a product other than what they they had ordered, price discrepancies and lack of sellers return and refund policy.

But now the government has finally drafted the e-commerce bill and asked stakeholders to comment on it, a decade after muncha.com pioneered e-commerce in the country targeted at the Nepalese diaspora who wanted to give gifts to the Nepalese.

“We have made the draft public so that we can get suggestions to improve the bill,” said Ganesh Prasad Pandey, joint secretary at the Ministry of Industry, Trade and Supply. “After receiving suggestions, we will make improvements to the project accordingly.”

But, according to consumer rights activists and entrepreneurs, the government’s plan to introduce the law came late and there are many problems with the bill.

“It is already late to introduce an e-commerce law in the country and everything that has been prepared is missing a lot of things,” Prem Lal Maharjan, president of the National Consumer Forum, told the Post.

According to him, such a law was already necessary five years ago, when online shopping began to take off in the country.

Industry insiders say, and government officials admit, that the e-commerce market has grown in recent years due to the growth of the middle class, the increase in the number of Internet users and users of smartphones.

According to the latest Management Information System report from the Nepal Telecommunications Authority, Internet penetration in Nepal reached 77.91% of the total population as of mid-October 2020.

The situation created by the pandemic has given the industry an extra boost with more and more people ordering everything from groceries, fresh vegetables, food and household essentials online.

According to Nepal Rastra Bank, 112,706 e-commerce transactions worth Rs 8.2 billion were made through online payment using only debit and credit cards in Mangsir (mid-November to mid-December ) only.

Apart from cards, payments are also made through payment gateways such as “digital wallets”, checks and cash on delivery, according to the industry.

“It would have been better if the e-commerce law had been prepared earlier, as it would not have caused misunderstandings and operational problems,” said Amun Thapa, managing director of Sastodeal, one of the main platforms. of e-commerce in the country. which partners with Flipkart of India.

It lacks clarity on many issues such as unnecessary service charges based on the weight of goods, quality assurance and customer service, among others, according to Maharjan.

E-commerce entrepreneurs also see a lot of holes in the bill.

“The bill needs a lot of revisions. Every topic needs to be discussed and defined properly for the final law to be good,” said Kiran Timsina, co-founder of UG Cakes, which delivers cakes, and Urban Girl, an online women’s fashion store.

This revision seems necessary despite the many discussions that took place during its preparation, according to Timsina.

“It seems to have been hastily prepared although it is already late to introduce e-commerce law in the country,” he told the Post. “Decision makers seem to misunderstand the e-commerce business model and the processes involved.”

According to Thapa of sastodeal.com, three important points must be clearly defined in the final e-commerce law: a precise definition of e-commerce, the confidentiality of customer data and a way to formalize small informal online retailers providing a service. e-commerce via social media.

“The suggestions that were provided during the preparation of the project did not come out clearly,” Thapa told the Post. “The definitions of what constitutes e-commerce and its operating model such as the marketplace and the inventory model or both are unclear.”

The bill defines electronic commerce as the sale and purchase of goods and services via the Internet or a computer network or any other electronic system as well as the commercial transaction, transfer of data, supply of goods and services, rental, hire-purchase, exchange and professional transactions. and other services provided through an electronic medium.

The market is defined as an intermediary business that facilitates transactions between sellers and buyers through the electronic medium network and includes wholesalers, retailers, commercial agents, brokers and distributors who carry out their activities through commerce. electronic.

But consumer rights campaigners are concerned that the lack of specific provisions in the law regarding the roles and responsibilities of online marketplaces means these companies are answerable to no one, despite making money. money as intermediaries.

E-commerce Insiders, on the other hand, say they cannot be held responsible and cannot take responsibility for faulty goods delivered or warranty and warranty on goods if provided by the company, because they only act as a marketplace.

According to the draft law, the e-commerce company must clearly mention the details of the goods and services such as the final price including taxes, the details of the goods such as the shape, the date of manufacture, the brand, the quantity, the expiration date and warranty and warranty date if provided. on goods and services.

If buyers wish to return goods found to be defective, the product must be exchanged or the money returned, depending on the project. And if the product and services have a warranty and warranty, the e-commerce platform should offer that as well.

The platform should be responsible for handling complaints and cannot back down saying that the company is not the manufacturer of goods and services and is only a marketplace.

Penalties are not clearly defined, according to Madhav Timilsina, a consumer rights activist.

There are also issues about who can be counted as an intermediary.

“There are people who have settled on social media,” Thapa said. “There is no mention of fines for anyone doing something like this.”

An e-commerce business must be registered with the Commerce, Supplies and Consumer Protection Department according to the draft, but registration requirements are strict.

The e-commerce business should have a secure electronic equipment system with a secure socket layer, a small data file installed on a web server that allows a secure connection between the server and a web browser for data privacy. data, but industry insiders say that may not be possible for small businesses.

There have already been cases of data breaches in Nepal’s fledgling e-commerce industry.

Foodmandu, an e-commerce company providing a food delivery service, encountered a data breach in March last year. The company detected a cyberattack by a hacker that resulted in unauthorized access to customer data.

If buyers must submit the personal data when purchasing goods and services, the company must protect the data of the person and must not provide it to anyone for any purpose and the company must not no longer use them for other purposes.

The issue of data privacy has been raised, but it needs to be worked out properly and criteria need to be defined, according to Timsina.

“For example, whether data is used for transactional purposes such as sending marketing emails to buyers with the customer’s permission may or may not be sent is unclear,” he said.

But for Ghimire, who got screwed with the vaporizer, the government’s efforts to pass the law came too late.

The government prepared a national strategy related to the development and use of e-commerce in Nepal in 2018.

But it wasn’t until this fiscal year’s budget announcement that e-commerce was given priority due to its growing demand during the lockdown.

Subsequently, the Directorate of Trade, Supply and Consumer Protection prepared a draft law on electronic commerce and sent it to the Ministry of Industry, Trade and Supply. end of June 2020.

Panday, the co-secretary, admitted that there might be shortcomings while preparing the draft and that is why the ministry made it public so that it could be improved.

But even if the comments are incorporated and a bill is finalized, it is unclear when it will pass.

“The House has been dissolved. The final draft will not go to the Chamber unless the new Chamber is formed after the next election,” said Urmila KC, spokesperson for the Ministry of Industry, Commerce and Supplies.

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