E-retailers spending big bucks on advertising, while customer service takes a backseat
E-retailers, flush with private equity money have large advertising budgets that are liberally spread across mainstream media. Is this allowing them to generate only positive news while poor service, delivery hiccups as well as the strange antics of some young founders are quietly buried?
It is boom-time for e-commerce start-ups in India, which are flush with venture capital funding that allows for large advertising budgets for brand building. These days, a clear corollary to large ad-spends is the ability to influence editorial coverage and ensure that it is restricted to positive coverage and puff pieces. All have learning glitches and delivery problems, even if they are teething troubles and are rarely reported.
Consider just one such example. On 6th April, a leading economic newspaper reported how India's largest online grocer BigBasket was set to offer home delivery in 60 minutes. It reported that BigBasket was planning to tie up with local stores to manage its logistics. The report talked about how BigBasket will collaborate with 1,800 local stores in Bangalore, Hyderabad, Delhi, Mumbai, Chennai and Pune, and how it will provide them the technology to handle deliveries and manage inventories. The report was clearly to counter a move by Flipkart and Amazon's (which has announced “Kirana Now”) to move into its domain by offering groceries and household products.
Interestingly, during the very time that this report was published, BigBasket was in fact struggling to manage deliveries, inventories and the large orders that were ostensibly triggered by its “offer” on fruits and vegetables. There were mistakes galore leading to incomplete delivery, damaged products and poor follow up and rectification or orders. This was happening for orders that had been placed as much as two days in advance as well. Clearly, the online grocer is a long way off from being able to deliver in 60 minutes, leave alone deliver a complete order based on correct updation of stocks and inventories on its website.
In fact, the problem was widespread enough for BigBasket to send out an apology email to customers, much like Flipkart had to do after its “BigBillion Day” chaos in October last year.
The email, sent out by KB Nagaraju, Chief Customer Experience Officer on 7th April acknowledges that customers have had to put up with “delayed deliveries, incorrect deliveries, or difficulty in getting delivery slots of your choice.” It also acknowledges that customers were unable to get in touch with their customer service office.
It goes on to list measures that are planned to avoid such issues in future, such as increased buffers in supply chain capacity, supply chain monitoring and prompt alerts to customers in case of any constraints from their end.
The audacity of being able to plug a story about 60 minute delivery at a time of a delivery crisis is an indicator of how all news that is fit to be published is decided by those who have the bucks to pay for large advertising campaigns.
It is not just BigBasket – customers have been complaining of problems with delivery in almost all e-commerce platforms. On the Indian Consumer Complaints Forum, many consumers have reported delayed deliveries, delivery of wrong items and rude behaviour of delivery boys. Many reported that while the online delivery tracker says “Out for Delivery” or “Item Delivered”, the products were in fact not delivered at all.
Customers face these issues across all e-commerce companies, including biggies like Snapdeal, Flipkart and Amazon. In addition, while customers are struggling to have their problems addressed, e-commerce companies have been spending big money on advertising and ‘positive news’.
According to media reports, the e-commerce sector spent between Rs750 crore and Rs800 crore on advertising in 2014, and this number could cross Rs1,000 crore in 2015.
An apologetic email or a few catchy jingles may appease customers for a few weeks, but e-tail companies such as BigBasket should perhaps, be working on getting their deliveries and customer service right before focusing on media strategies and delivery on short-notice.
Our email sent to BigBasket about the delivery issues remained unanswered till writing the story. We will incorporate their views as and when we receive it.