Evaly: An E-Commerce Giant in the Making or a Digital Ponzi Scheme?

Evaly was launched in December 2018 in Bangladesh and the ecommerce landscape has not been the same ever since. 2018 also happened to be the year that Alibaba group, the global ecommerce mammoth, had acquired Daraz Group, and with it, of course, Daraz Bangladesh. By this time, Daraz had already operated in the country for over 3 years and was just starting to sort out its previously poor track record with delivery timeline and product quality. 

Fast forward 15 months, we are in the middle of a once in a century pandemic with the whole world resorting to lockdowns and social distancing to curb the COVID-19 infections. This was a blessing in disguise for digital businesses, especially ecommerce as it was just the catalyst that was required to bring a change in shopper behavior. In these 15 months, Evaly has had a phenomenal run with a few bumps along the way and is now going head to head with Daraz (which is currently almost 7 years old).

According to website metrics from similarweb.com comparing Evaly to Daraz Evaly is ranked higher both in their Global and Bangladesh country rank. On Alexa ranking, Daraz and Evaly are the top two ecommerce sites in Bangladesh with rankings of 12 and 18 respectively. The only other ecommerce site in the top 50 is Chaldal.com.

Source: SimilarWeb

In the graph below from silimarweb.com you can see how Evaly’s monthly web traffic overtook Daraz’s in December 2020 and has continued to lead the race throughout till now with current total visits of around 13.1 million compared to 6.8 million of Daraz in the last 6 months.

Source: SimilarWeb

There is no doubt that Daraz is facing serious competition from the “new kid on the block” however Daraz and Evaly have very different business models.

E-Commerce vs Social E-Commerce

To be fair to Daraz, what Evaly is aiming to establish is not the traditional Ecommerce model that companies like Alibaba or Amazon have executed to perfection to become two of the largest companies in the world. Evaly is taking more towards the social ecommerce trend that is taking China by storm (minus the social networking part). 

Let’s talk about social ecommerce. Social ecommerce makes up 11% of China’s retail sales. Pinduoduo is the largest social ecommerce platform in China where customers can muster up a group of peers who are willing to order a specific product as a group and in the process scoring discounts of up to 90%. The interface of the platform looks more like the Facebook newsfeed than a typical ecommerce homepage. 

It can be observed in the Bangladeshi f-commerce market as well where we see sellers post live videos, advertising their products (especially ladies’ garments and make up), and demonstrating their usage. Buyers comment on the posts and share the posts with their friends and family and place orders on the video. Evaly capitalized on the networking effect through the Facebook group that they had set up during its infancy. The group currently has over 600,000 members and has contributed to the growth of the platform immensely. Evaly heavily moderates the posts to their benefit but still allows some dialogue to take place in the comments section which is both a boon and bane for the company. The group posts are often riddled with customer complaints in the comments but also act as a highly cost efficient way of promoting the various campaigns that can be said to be Evaly’s bread and butter.

Deep discounts to attract low income customers

Evaly’s Cyclone and Earthquake are two of its flagship campaigns, which have become weekly events now. Products in these campaigns are available at unmatched deep discounts which entice users from all socioeconomic classes. Evaly’s discounts enable customers to purchase products, especially consumer durables which would otherwise be unaffordable. Products like motorbikes, refrigerators, televisions and smartphones are of particular interest to Evaly customers.

While traditionally, E-Commerce customers were primarily urban and semi-urban, Evaly has been able to change that to some extent with people from less developed areas of the country also purchasing online through Evaly.

Before Evaly’s emergence, customers used ecommerce for low value items only as they trusted research online purchase offline (ROPO) model for high involvement and high value purchases. However, enticed by the very high discounts which are not available anywhere else (online or offline), customers have learnt to live with compromising trust factor and shift from ROPO to direct placing orders on Evaly’s website.

While traditionally, E-Commerce customers were primarily urban and semi-urban, Evaly has been able to change that to some extent with people from less developed areas of the country also purchasing online through Evaly. This is one critical advantage that Evaly has over traditional ecommerce like Daraz and is helping the company gain scale rapidly.

How are these insane discounts possible by Evaly?

Evaly CEO on a Facebook Live session hinted that Evaly is following the Pinduoduo “group buying” model where Evaly as a middleman aggregates individual demands and collectively places orders with the manufacturers (OMEs) or vendors. Evaly bargains for a deep discount from the manufacturer and procures at cost price as Evaly technically generates new sales for the OEMs without the OEMs having to spend anything on advertising, distribution channel and warehousing.

However, if you were to analyze the discounts offered by Evaly, you would notice that they are often far below what would ideally be the cost of production. This would lead one to believe that Evaly pitches in on the discount that is offered to the customer as well.

Source: UI Sources

Ecommerce companies passing on benefits to the customer in the form of discounts and offers is nothing new. In fact, ecommerce businesses are notorious for providing discounts to survive and be the last man standing in the market. What stands out with Evaly is the unprecedented level of discounts never before seen in Bangladesh ranging upto 100%.

In its early days, Evaly was smart with the discounts by terming it as cashback where the customers would have to pay the full amount and the discount amount would be credited to the customer’s Evaly wallet and the customer would have to use that amount to purchase products from Evaly or its associate, Efood. However, this soon caught the eyes of the Central Bank (which regulates mobile and other digital wallets) and Evaly has since almost fully phased out the use of cashback offers. They now provide discounts on the Market Recommended Price (MRP).

Customer complaints and investigations

2020 has been a good year for the company but it was not all smooth sailing for the company. As the company rapidly grew, it did not focus on making its systems and processes efficient and scalable. The orders and campaigns were managed manually and individually by employees, which made their operations not only human intensive but also very ill designed to support the kind of volume that their marketing was generating. This led to orders being cancelled due to mismanagement at vendor end and of course the infamous 6-9 month wait times.

Evaly Customer Complaints

The number of cases where customers were waiting for months on end only to have their order get cancelled also increased substantially. These growing adverse cases of orders placed by customers who were generally from relatively lower income background was soon picked up by news outlets.

Evaly Newspaper

As the reporting on the irregularities within Evaly increased, government agencies started taking notice which included the Central Bank of the country. For a few weeks in August and September of 2020, Bangladesh Bank had frozen all the bank accounts of Evaly while they investigated their accounts. Since Evaly was a prepayment only business, their operations were seriously hampered by this. Soon after the bank accounts were unfrozen, few more agencies started their investigations including the Ministry of Home Affairs, Ministry of Commerce, Anti Corruption Commission and Directorate of National Consumers’ Rights Protection (DNCRP). According to a report by the Dhaka Tribune, at least eight types of frauds and irregularities were detected in their investigations.

Aggressive spending

Despite all the bad rapport that Evaly had built owing to the bad press, Evaly maintained its momentum through its magic bullet: campaigns and deep discounts. Evaly would have to have very deep pockets to be able to sustain for almost 2 years running campaigns where 100% discounts are common. In addition to these campaigns, Evaly has also recently recruited A-list celebrities like Tahsan Khan and Rafiath Rashid Mithila to be their brand ambassadors in hopes of salvaging customers’ trust in their brand. 

Evaly Tahsan Mithila
Source: Evaly Facebook Page

In order to start building a favorable relationship with the press, Evaly bolstered their PR team and started placing ads in most of the popular new outlets (both print and electronic). They have also sponsored the Bangladesh National Cricket Team in addition to their continued heavy investment in TV ad spots. This type of overt and extravagant spending on advertisement and promotion is a first in Bangladesh from an ecommerce or an internet company.

Evaly Sponsorship
Source: Daily Cricket

Additionally, in the last 9-12 months, Evaly has been on a recruitment spree poaching talent from competition offering upto 2x their current compensation package. Evaly has had to rent new office space every few months to accommodate these resources. In addition to industry best compensation packages, Evaly is also providing vehicles as part of compensation to the middle and top management.

Evaly recruitment

The CEO and MD of the startup, for example, was allegedly provided a Range Rover initially and a Porsche Panamera recently. Evaly has become so strapped with cash that they had taken their some 200+ member management team out for a picnic in the sea beach town of Cox’s Bazar which is rare even at large decades old conglomerates and multinationals operating in the country.

Evaly has also ventured into new verticals like food delivery through their brand Efood, building their platform from scratch in a very short time. It is worth mentioning that the execution here has been superb, unlike the mother ecommerce vertical. Recently Evaly has also stepped into the travel & tourism sector through the acquisition of a flailing startup in the sector badly affected by the pandemic. Both of these expansions required heavy investment, no doubt, only adding to their heavy cash burn.

Where does the money come from?

This sort of splurging while their system remains inefficient leading to more and more disgruntled customers each day would lead one to question their fiscal management and the source of the funds that power this sort of extravagance.

One source of funds is obvious, the prepayment that Evaly receives against customers’ orders. It takes at least 3 months for a customer to receive their orders (even though 45 working days is mentioned in their policy) and another 3 months to receive their order if and once their order is cancelled (which is 58% of the cases). In case the order is not cancelled, the vendor gets paid with a 90 day credit period.

In any case, Evaly holds the cash from each order for about 180 days (about half a year) from an average order. Of course, there are orders which are delivered within a month and there are vendors who do not agree to the 90 day credit term but those are exceptional cases where the customers purchase at full price. These sort of orders make a very small percentage of the total order volume.

Evaly has not disclosed or hinted at any other source of equity or debt financing it had acquired to fund its operations. It does not take a finance genius to see how funding uncontrollably growing operating and promotional expenses from cash generated from orders can be unsustainable. This is considered a snowball rolling down the hill by many who often compare Evaly to the sensational MLM ponzi scheme Destiny 2000.

The crux of Evaly’s delivery problems

Evaly with all its defects has managed to achieve feats which would otherwise have been considered impossible. They have successfully engaged the previously untapped rural market, they have gained scale at both ends of the supply chain to create cost efficiency in the market and they have, to a great extent, shifted customers from cash on delivery to digital prepayments. These are positive, potentially game changing, things that they have managed to do in 2 years that Daraz could not do in 7 years in Bangladesh.

With these key unique advantages, Evaly has the potential to become ‘the people’s champ’ in the internet space of Bangladesh. However, to realize this potential, Evaly needs to get the basics right. 

Evaly is structured like a traditional trading company which happens to be tech enabled instead of a pureplay technology startup. For example: Evaly has a large commercial team and operations team (made up of people with traditional sales and distribution background), a very large customer service team (modelled around telco customer service with people from telco background). As these teams grow in numbers the IT team takes the backseat and, along with it, so do all the possibilities of building IT capabilities to reduce lead times and human involvement in the order to cash process. 

If you reach out to Evaly’s customer service team via email, you will almost certainly receive a reply within the hour but the reply will have no tangible information on ETAs or the current status of the order.

Additionally, hiring talent from traditional backgrounds and large companies means these people will come with a lot of experience (and/or baggage) that they will try to implement at Evaly. These practices may be well accepted in traditional industries but might not necessarily be ideal for a fast growing ecommerce company. One such example would be Evaly’s decision to invest heavily in increasing the number of customer service agents (with an aim to improve customer satisfaction) instead of investing on the logistics so that an order can be tracked with precision and transparency on the delivery status can be provided to the customers. Investing only in customer service agents worked well in telco as the service delivery (phone calls, SMS and data) is instant and hence there is no need for logistics tracking but ecommerce is a different ball game. If you reach out to Evaly’s customer service team via email, you will almost certainly receive a reply within the hour but the reply will have no tangible information on ETAs or the current status of the order. They will essentially reiterate the vague order status that is already available on the website and apologize for any delay. Fast replies really do not mean much to the customers if they contain no information regarding their order.

Arguably, the core of ecommerce, ensuring a transparent and efficient delivery process. Daraz had realized it and had invested heavily in their Daraz Express network in 2018 through till 2020 and they are currently reaping the results with improved Customer Satisfaction (CSAT) and Net Promoter Score (NPS) scores than ever before. Daraz has also aggressively adopted best in class processes and policies from Alibaba since then with laser focus on improving customer satisfaction. As a result they have significantly improved their return process, refund process and their tracking process. It is time, as Evaly goes head to head with Daraz to become the largest ecommerce of the country, to also adopt such practices and bring their delivery process up to par with the Daraz.


Evaly’s rise thus far has been through deep discounts. Its growth has brought about an inflexion point in the shift of customer behavior and dynamics of the ecommerce industry of the country. However, the this sudden success is also a turning out to be a curse for the company as it has failed to the basics in check: spending responsibly, keeping up with scale with technology instead of manpower, adopting customer centric policies and processes from global best practices and finally hiring a winning team with startup and digital mindset.

Featured Image Source: Evaly Career Page

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