E-commerce platform Evaly faces no risk although its dues to customers and merchants have surpassed Tk300 crore, said Managing Director and Chief Executive Officer Mohammad Rassel.

He said the dues have reached this figure since they are now maintaining "a loss leader strategy" – selling a product or service at a price that is not profitable but sold to attract new customers.

"To minimise the Tk300 crore gap, we have initiated priority store sales that have proved to be profit-making so far. Last month's sales amounted to Tk10 crore, and it gave us a handsome profit margin," he told The Business Standard in an interview.

The Evaly CEO said they will reduce the discounts gradually to minimise the losses as the margin from the merchants and priority store sales will increase the overall profit.

"Our projection is that by gradually reducing the losses, we will not have any more losses by 2022, and we will completely cover up the current losses by 2024 – with profit," he added.

With the discounts on products, he said, the Tk300 crore either went to the customers or to the suppliers. "But in the meantime, I have secured 1 crore visitors to my website a day and all companies of the country have joined hands with Evaly for business. "So far, I have paid Tk6,000 crore to the suppliers alone," Rassel said.

The CEO noted that Evaly is managing the gap between liabilities to customers and merchants and its assets with supplier credits.

"With the supplier credits, I am delivering products to customers. As a result, our credit limit is expanding," he said.

"We certainly will cover up the losses with profits, and it is like a long-term venture. It may sound confusing – how will the losses be covered up?

"But as we incurred losses from sales, so will we return to profit from sales. Then we will also return our credits," said the evaly CEO.

The central bank has observed that evaly has fallen into a vicious cycle of liability and loss leading to an existential threat.

About the Bangladesh Bank remarks, Mohammad Rassel said, "We have been getting products from almost all companies in the country for the last two years. We have done the core business development. There is profitability in our purchasing prices. If there was no profitability, then it could be called a vicious cycle or baseless business.

"But we are creating a place of major profitability. That profitability and sales may still be at a loss. But profits will gradually increase and the losses will decrease. This is our business policy."

Asked about the fact that there is only Tk2 crore in Evaly's bank account against the Tk73 crore gift cards, he said, "Our gateway payments are not reflected here. The Bangladesh Bank has only taken our bank balance into account. But the gift cards are not cash equivalent, people will use them to buy products. When customers buy products against the Tk73 crore gift cards, I will have a margin there too."

Evaly spends Tk3.57 to profit Tk1. Then how would the company post an overall profit? In reply, Rassel said their revenue-loss ratio was more than the current figures.

"The gap is now dropping significantly. At a point, it will reduce to zero and we will return to profit then."

Asked why the net loss is increasing, he said the accumulated net loss is increasing, but ultimately the revenue-loss ratio is declining significantly.

On database access denial to bank officials, Rassel said, "Our real-time database is neither fully automated, nor updated. Many of our systems are still manual. And this is what we told them [bank officials]."

What is the reason for dues to the merchants even after taking payment in advance from customers? Rassel said, "We have to buy products from the merchants at a higher price than the rates we charge the customers. It takes a lot of customers and a lot of sellers to make the business sustainable. Discounted sales are part of the business campaigns, which is what all e-commerce platforms in the world offer.

"Since we have to buy at a higher rate from the merchants than the customer payments, some limitations surface that deter real-time delivery. It will come down gradually and there will be real-time delivery."

The central bank remarked that Evaly is now paying off old liabilities with advances from new customers.

Rassel said, "It is a matter of developing business relationships. In building the relationship with a company, the transaction will depend on how long the two parties have been doing business.

"If we purchase the products of a company for one month, and then do not buy from them for the next three months, that company will neither give us any margin, nor the supplier credit.

"That is why you always have to take a certain number of products from the merchants. But this does not mean that we have to pay the merchants after taking advance from customers. Because, delivering products to customers is still a loss for us."