Consumer Issues
From Flipkart to Flopkart in one BigBillionDay
Flipkart's big coming out party backfires with social media backlash following complaints from various users
 
For the last few days, Flipkart has been everywhere. Ads about the “Big Billion Day” made sure everyone knew there was to be some sort of an epochal sale on Monday. Snapdeal followed suit and finally the day's here. Things have not gone too smoothly for Flipkart though. 
 
 
 
 
As far as the social media trends go, Flipkart has done well to top the list, followed closely by Snapdeal. But there was a major backlash on social media as the site crashed, prices fluctuated and customers realised that the discounts on Flipkart weren't really discounts.
 
 
http://t.co/NzVXvGLbkG is celebrating Bakri Eid by making a bakra out of common ppl.. Amazing #BigBillionDay
Users complaining on social media have become a difficult situation for most companies to handle, especially when the complaints have some basis in truth. With a heavy push on social media and the traditional media blitzkrieg, this opened Flipkart up for serious trouble on social media.
 
It is an old tactic among sales managers to mark up a product before giving discounts on the same. This was however the first time, that such a sale was pushed and executed over social media. What is otherwise an open secret has now become a PR nightmare for Flipkart.
Flipkart followed this up with technical glitches as a result of a surge in traffic and a holiday, leading into a long shopping season.
 
Soon Flipkart had turned into Flopkart and memes were doing the rounds on Facebook and Twitter, like the one below:
Another major problem was the cancellation of orders for no clear reasons. Customers' ire about the fact that Flipkart has a No cancellation and No refund policy when it comes to customers was clear when their own orders were cancelled by Flipkart.
 
Sure enough, there were users pushing Snapdeal and what should have been a major win for Flipkart has gone completely awry for the young company.
 
An article on the website Mission Sharing Knowledge critiqued the ‘Big Billion Day’ sale over many issues. The article used Flipkart's own tool to show how this sale was a big scam and that prices had not been discounted at all. 
 
Business Standard quoted a spokesperson as saying the “There was an error, which has been corrected. Our team is prepared to check all stress points. The event is very successful and very well managed so far.”
 
In another development that promises to make things more complicated, the Confederaton of All India Traders has written to Commerce Minister Nirmala Sitharaman, complaining against such "Sales" by e-commerece website. "The above fact (discounts) certainly amounts to predatory pricing which is against principle of fair competition in the market and therefore demands animmediate cognizance of the matter by the Government and called for necessary steps," the letter says. The letter ends with a suggestion to constitute a regulator to monitor e-commerce websites so as to level the retail playing field.
 

User

COMMENTS

deepaksb

2 years ago

I do not agree with persons just blaming flipkart.Even OBAMACARE site in US had failed in spite of an advanced and rich country and technologies.

Flipkart has sent an apology email to its present and prospect consumers.

At times even large business houses like tata,birla,reliance etc. do not have any courtesy to send such apology mail.

( forget about govt.deps. like PSU banks,Railways,Income tax,Municipal corporations etc. fails many time but do not bother to write an apology-not being paid salary for apology !!!)

============================
apology mail was sent on 7th oct 2014.
===========================
Dear Customer,

Yesterday was a big day for us. And we really wanted it to be a great day for you. But at the end of the day, we know that your experience was less than pleasant. We did not live up to the promises we made and for that we are really and truly sorry.

It took enormous effort from everyone at Flipkart, many months of preparation and pushing our capabilities and systems to the limit to be able to create this day. We were looking at fulfilling the dreams of millions of Indian consumers through deals and offers we had painstakingly put together for months.

And though we saw unprecedented interest in our products and traffic like never before, we also realized that we were not adequately prepared for the sheer scale of the event. We didn't source enough products and deals in advance to cater to your requirements. To add to this, the load on our server led to intermittent outages, further impacting your shopping experience on our site.

An unprecedented 1.5 million people shopped at Flipkart yesterday. While we stand humbled by the sheer faith that such a large number of customers have shown in us, we are unhappy that we were unable to live up to the expectations of millions more who wanted to buy from us yesterday.

And this is not acceptable to us.

Delighting you, and every single one of our customers, is absolutely the top most priority for Flipkart and we have worked very hard over the last seven years to earn your trust. Yesterday, we failed that trust. We have learnt some valuable lessons from this and have started working doubly hard to address all the issues that cropped up during this sale.

Price Changes As we were preparing various deals and promotional pricing in the lead up to the sale, the pricing of several products got changed to their non-discounted rates for a few hours. We realise that this breaks the trust our customers have put in us. We are truly sorry for this and will ensure that this never happens again.

Out-of-stock Issues We ran out of the stock for many products within a few minutes (and in some cases, seconds) of the sale going live. For example, most of our special deals were sold out as soon as they went live. We had ensured availability, anywhere from hundreds to a few lakh units for various products, but it was nowhere near the actual demand. We promise to plan much better for future promotions and ensure that we minimise the out-of-stock issues.

Cancellations We had large number of people buying specific products simultaneously. This led to some instances of an order getting over-booked for a product that was sold out just a few seconds ago. We are working round-the-clock to ensure availability of additional units for these products and will do our level best to ensure that we minimise any cancellations.

Website Issues We realise that the shopping experience for many of you was frustrating due to errors and unavailability of the website at times. We had deployed nearly 5000 servers and had prepared for 20 times the traffic growth - but the volume of traffic at different times of the day was much higher than this. We are continuing to significantly scale up all our back end systems so that we do a much, much better job next time.

Everything that we have achieved at Flipkart is purely on the basis of our customer's trust and faith. This is why we come to work each day and continue to remain extremely passionate about building the best possible customer experience for Indian consumers. We failed to live up to this promise yesterday and would like to apologise once again to every single customer for our failure.

Thank you.
Sachin and Binny​

REPLY

chan

In Reply to deepaksb 2 years ago

Don't compare Tata's with Flipkart promoters. There cannot be comparison between jewel and bullshit.

deepaksb

In Reply to chan 2 years ago

Tata is worst than bullshit.Tata CDMA mobile service and also Tata docomo gsm service has been squeeziing its customers ( DUE TO POOR NETWORK) at Mumbai's some of low rise business areas LIKE CHAKALA AND SEEPZ and tata's own technical staff had admitted POOR network coverage.tata has been silent on this and did not reply to couple of mails and phone calls.

Tata's group co.Eureka forbes has been supplying defective water purifiers and has been taking its consumers for a ride !!!

SO WHO IS JEWEL AND WHO IS BULLSHIT !!!!

TIHARwale

2 years ago

Flipkart needs to put up number of pieces available even 72 hours prior to the sale commencement time ( like Railways site put up seats available and you can see how many seats are still available). This will remove doubts in public mind. I also confirm i received one Prestige Pressure Cooker 3L( against full payment of Rs 705/- on line) ang got its delivery in Bangalore on 7th and a Moto E cash on delivery Rs 5499/- yesterday at Delhi seller WS Retail Services Pvt Ltd, Mahipalpur Delhi. The discount is genuine because about 20 days ago i received a similar set from them paid on line for Rs 6,999/-. The pachage outer cover informs the VAT/TAN/Invoice. So the question will be whether i paid more on the first occasion or got a discoiunt in the sale day. Flipcart updated status by SMS that item is shipped and subsequently the expected delivery time. THE INVOICE CONFIRMED THE DATE OF INVOICE AS YESTERDAY

Today i find Amazin has put up a Asuz Laptop i find the specification attractive , of course site mention COD not available.

Srinivas Jayaram

2 years ago

Guys who wants to give it back to ‪#‎flipkart‬.? If you wanna then order something on cash on Delivery and don't respond to it.
punish them by putting logistics cost on their head.

REPLY

TGen

In Reply to Srinivas Jayaram 2 years ago

That's very unethical. They ran out of stock and their servers crashed. So you will cheat them?

ranjan pradhan

2 years ago

There is something fishy from flipkart or redmi side. I doubt about quantity of sale. On 30th September, I cliked within 1 seconds and reloded earlier to synchronise time with the website. But within 2 seconds got a message out of stock. Whereas the news says the sale process continued for nearly 14 seconds. The whole process is advertisement gimmick.

REPLY

MOHAN SIROYA

In Reply to ranjan pradhan 2 years ago

And it is rigging also . Rigging of Online order clicking. Like it happens in Railway reservation in season. Within 5 minutes almost 20000 tickets get booked and waiting list starts. An example of 'System rigging'

jaideep shirali

2 years ago

I had placed an order about a year back on Flipkart for a printer at a good price. After confirming the transaction, they backed out saying they ran out of stock. What then is the sanctity of the transaction on Flipkart ? I cannot understand how a marketer sells articles he does not have or cannot deliver. That pattern seems to have been repeated yesterday. At around 8.20 am yesterday Flipkart said that the best deals were gone, across products. Great if that were the case, but my experience makes me wonder whether these companies place 'orders' to 'exhaust' stock at the ridiculously low prices and then sell the actual stock at lower discounts to customers. In the bargain they would get their customer traffic, but maintain the margins.

REPLY

TGen

In Reply to jaideep shirali 2 years ago

I live in Canada and let me tell you Amazon has done this to me as well. My husband ordered something for me for our anniversary, and 10 DAYS later they sent an email saying they can't source the item and my order is cancelled. Not unique to Flipkart.

Abhijit Gosavi

In Reply to jaideep shirali 2 years ago

But that is how the best pricing models work. And what is wrong if they maintain the traffic *and* get some profit margins for themselves? After all they need to survive too! You've hit upon essentially what their model is :)

Do complain if you lost money or time, but not otherwise (if they wasted your time, they've lost you in the future, and that should act as a strong deterrent for them). If even those "lower discounts" are better than what the competition has to offer, then go with them; otherwise, you are under no compulsion to buy their products.

Those who come early get the lowest prices, and that's how (surprisingly to some) they maximize their profits. Short of incentives there won't be enough demand generated. A flat pricing model won't do the consumer or the economy any good.

ranjan pradhan

In Reply to Abhijit Gosavi 2 years ago

Suppose you say a competition of 100 meter race and ask participants to apply. During the competition, you will say you to stand 20 meters behind the start line, some will stand at start line and some will stand at 20 meters after the start line. Now whistle will go and competition will start, it is obvious that your winning the game is very remote. Any advertisement for such game as fair competition may be termed as misleading advertisement and suppression of facts. This lead to wastage of time along with mental agony. This is a cost to the customer.

Abhijit Gosavi

In Reply to ranjan pradhan 2 years ago

Agree with you. If it cost you money or wasted your time, you should ask for a refund or never shop there again.

As far as "fair competition" that you mention goes, if this is indeed predatory pricing (which *is* considered unfair), it won't work for too long in this case --- because there's strong competition in the market (e.g., Amazon). Flipkart will have to raise its prices substantially in the near future to make up for any losses it just made. If it sinks, that will deter businesses from indulging in such an adventure again. If it survives, it means it just made history and that it had a new biz model (just like Dell did in the U.S. when it started shipping, via air, PCs to the customer's doorstep).

Of course, if it becomes a monopoly or if it is not paying taxes, then there are grounds for the govt. to intervene. The article I just read in HT suggests that the govt. is investigating Flipkart. So we will see what happens.

Jessicasarahgomez

2 years ago

Buy the latest Xiaomi phones for some amazing deals at Redmi-1s.com

REPLY

MOHAN SIROYA

In Reply to Jessicasarahgomez 2 years ago

Who got ? Have U got it ?

MOHAN SIROYA

2 years ago

P.S One more thing. No conditions/rules were applicable
for to days's transactions on Flipkart online. I know at a least a dozen persons who subscribed to its membership at 399 instead of Rs.500. Wishing that preference will be given to them. Foolish trap. Is it not ?

MOHAN SIROYA

2 years ago

In fact, flipkart billion day sale deserves to be called super flop and a fast one pulled on the Indian customers.
Morning papers were agog with up to 90 percent discount. For example Samsung Tab2 costing 13900 was quoted for just Rs. 1390. Who could have resisted? The stampede to log in and buy was pre-decided. But "Server Error' or actual pricing almost near to the original price was displayed. When shoppers protested , the next hour flashed "SOLD OUT". Well that was not confined to this billion day sale. Earlier when the Xiaomi Mi was launched in a second they flashed "All 45000" sold out. MAGIC .HOWZAT ! Just creaedt an hype and hoopla. Who cares of the common man yaar?

Chandramohan Amritkar

2 years ago

They have learnt the art from our airlines - make a few pieces of each item available at a very low price, advertise it and then sell at normal prices.

Rakesh Goyal

2 years ago

Many times, things are executed without proper and in-depth planning covering all possible dimensions. In this case, these include but not limited to stress-testing, security, functionality, infrastructure constraints, real-life simulation, back-up, legal angle, CCI and incident response in case of different disaster scenarios. This was bound to happen. Apart from this PR disaster, some more disasters are waiting in the wings.

Prem Bajaj

2 years ago

absolute agreement - the arrival of flopkart. in fact snapdeal is even worse (that is if you can even access the website). But flipkart has a very poor choice of products and supremely hyped pricing.... and flipkart (sorry flopkart has proved that internet discounts are on last years products which are already +25% discounted on store websites)

and no refunds?
seems the billion day scheme is more a drive towards interest free deposit. Its better off going to the local mall and getting a choice of the latest designs.

shame on bansals to have misused the fresh funding.

Public Interest Exclusive
Is the Modi govt helping Ponzi, MLMs become legal?
Ordinary people are the biggest losers in the Ponzi, MLMs, chit fund and money circulation schemes like Saradha, Speak Asia and QNet. Yet, under 'pressure' from powerful MNCs operating as direct selling companies, the Modi government is reportedly proposing to dilute the PCMCS Act. Will it impose stringent conditions on them or merely help them to escape scrutiny?
 
It is reliably learnt that Department of Banking and Financial Services under the Ministry of Finance is moving a Cabinet Note on 7 October 2014 to bring exceptions to Prize Chits & Money Circulations Schemes (Banning) (PCMCS) Act, 1978.
 
By using this amendment, several multi-level marketing (MLM) companies, like Amway, QNet may get a free run in this country and become completely legal, when they were operating in a grey area so far.  The lobbyists of these companies in Delhi have been extremely active in New Delhi to get the Narendra Modi government support by diluting the Act. The irony is that while the Finance Ministry is quietly working at diluting the Prize Chits Act, the very same government and its capital market regulator has been going after the Saradha scamsters with renewed vigour and the chairman of MPS Greenery has been arrested following action by the capital market regulator. Ponzi schemes have been bursting on the national scene with great regularity and in most cases, there is political collusion. A major scam is also being investigated in Orissa after tens of thousands of people were duped of their life savings.  
 
So why is the dilution of the PCMCS act such a priority for the new government? Why is it being discussed so quietly, without a public engagement and seeking of feedback from stakeholders? Those who have persistently fought to protect people or highlighted activities of these MLM companies are surprised that the government has time to discuss dilution of this act, when at least six nationalised banks are headless for months and many do not even have executive directors. 
 
EAS Sarma, former secretary to the Government of India (GoI) has written to Cabinet Secretary Ajit Seth and the Banking Secretary Mr Sandhu in response to reports that the Ministry of Finance has circulated a Cabinet note with respect to proposed amendments to the PCMCS Act, 1978.
 
He says, “There are issues that impinge on several court cases and any dilution of the Act will prejudice the Centre's and States' cases before the Courts. Such a dilution will allow the delinquent MLM companies and their promoters to escape scot-free to the detriment of the public interest”.
 
The Cabinet note cited by Mr Sarma comes in the wake of regular chit fund scams, like Saradha, breaking all over the country and the government's as yet ineffective efforts to bring these chit funds under control.
 
By aping the model of MNCs, many indigenous companies are promoting illegal money circulation schemes in every nook and corner, thus ruining the fiscal system of this country. Rough estimates till now has revealed that financial consumers have lost a whopping Rs3 lakh crore by ‘investing’ or ‘buying products’ from these MNCs and local indigenous companies.
 
Even, the Intelligence Bureau (IB) in October 2012, written to the government about the illegal financial activities of chit fund companies. The IB reported "fresh" illegal financial activities of chit fund companies and multi-level marketing schemes that were cheating lower middle class and poor people, especially from rural and semi urban areas. Of the four firms named, two companies - Rose Valley Estate Construction Ltd, Kolkata and MPS Greenery Developers Ltd, Jhargram are in West Bengal, says a report from Hindustan Times.
 
The provisions of the PCMCS (Banning) Act, 1978 deals with such activities.  Section 2(c) of the Act defines ‘Money Circulation Scheme’ as a scheme by whatever name called for making of quick or easy money on any event or contingency relative or applicable to enrolment of new members into the scheme; for receipt of any money or valuable thing as consideration for a promise to pay money on any event or contingency relative or applicable to enrolment of new members into the scheme. This section further clarifies that it is immaterial whether the commission derived from entrance fee of new members, renewal of periodical subscriptions, conducting of seminars and sale of products or not.
 
Section 3 of the Act bans (i) Promotion or conduct of these schemes, (ii) enrol of members into such scheme, (iii) Participate or otherwise involvement in these schemes and (iv) remit or receive of the money relating to these schemes.
 
Mr Sarma, says, “I wish to underline the fact that ‘economic liberalisation’ should not mean welcoming firms that add no value to the economy. Most MLMs, the world over, belong to that category. Many of them are high and mighty, as they are MNCs supported by their parent countries. Their parent governments lobby on their behalf as they profiteer at the cost of the public in the developing world. These companies have, time and again, tried to sneak into the country, through the questionable FIPB route. The smaller MLMs and Chit Funds, hand-in-glove with the regulatory authorities, function merrily without registering under the Companies Act and swindle people. Several of these companies have financial links with terrorist groups, drug traffickers and so on. There is no place in India today where some family or the other is not shedding tears for having got robbed by one of these Ponzi companies! Do you want this unfortunate situation to continue and become worse?”
 
“If this report is true and if the Act is diluted in anyway, it will not only prejudice the ongoing court cases against MLM companies like Amway but also help more and more unethical Ponzi companies to derive strength and rob millions of unwary households of their meagre savings. There will be a mushrooming of Saradha-like companies having their sway over unsuspecting public and destroying their lives. Instead of curbing the MLMs, then the Central Government will have the unenviable distinction of being an abettor of the MLMs' anti-social activity,” the former Secretary said in his letter.
 
What is urgently needed today is not any dilution of the PCMCS Act but making it more stringent so that any company that tries to carry on activities that add no value to the economy but syphon off the savings of the small households are brought under rigorous regulatory oversight. The need of the hour is to secure coordination among regulators like SEBI, Registrar of Companies, Enforcement Directorate, Serious Fraud Investigation Office (SFIO), the State police and so on. Similarly, there is need for coordination among Central Ministries such as Finance, Corporate Affairs, Consumer Affairs and the State governments.
 
Moneylife has been writing and exposing thousands of MLMs, including Speak Asia, QNet (earlier version Gold Quest and Quest Net), StockGuru India, NMart, Minerals for All, and so on. Even Moneylife Foundation, the voice of over 31,000 financial consumers across the country, sent a Memorandum to the then Prime Minister Manmohan Singh urging him to either to ban out rightly or put in place a regulator in-charge to monitor such MLM companies and their schemes.

User

COMMENTS

Rohith Kp

3 months ago

Modi government should not support the MLM business like QNET. They are just duping people. Serious action must be taken to stop this in India.

Umesh Galande

7 months ago

In case , Amway Business is MLM and I heard , already courts have declared it as illegal , then why still Amway Business is running in India ?

Can anyone post a link of full and final judgement regarding Amway ?

Thanks !

REPLY

Scott Johnson

In Reply to Umesh Galande 7 months ago

That's a great question. I live in the U.S., not India, so perhaps I don't understand how the Indian government system works.

Agyat Vyakti

9 months ago

Off the topic. This is just for awareness.. Qnet and MLM are using friends and relatives to dupe you... You may like to read Qnet modus operandi with screen shots and facts and how to avoid them here ... Please share for public interest.. Qnet Scam in delhi by Ashwin Baluja and Prithvi Raj Grover http://qnetindiascam.blogspot.in/

Hemant Sharma

2 years ago

http://www.consumercomplaints.in/complai...#comment

REPLY

Agyat Vyakti

In Reply to Hemant Sharma 9 months ago

Off the topic. This is just for awareness.. Qnet and MLM are using friends and relatives to dupe you... You may like to read Qnet modus operandi with screen shots and facts and how to avoid them here ... Please share for public interest.. Qnet Scam in delhi by Ashwin Baluja and Prithvi Raj Grover http://qnetindiascam.blogspot.in/

Manoj

2 years ago

Case of MLM need to be presented to PM Namo effectively by team of Moneylife experts. These all are indirectly cheating people and with your insight on the matter, it will be sound knowledge of domain, I think PMO will buy your arguments & these all MLM will be forced to curb their operations totally.

REPLY

Agyat Vyakti

In Reply to Manoj 9 months ago

Off the topic. This is just for awareness.. Qnet and MLM are using friends and relatives to dupe you... You may like to read Qnet modus operandi with screen shots and facts and how to avoid them here ... Please share for public interest.. Qnet Scam in delhi by Ashwin Baluja and Prithvi Raj Grover http://qnetindiascam.blogspot.in/

Hemant Sharma

In Reply to Manoj 2 years ago

It will be good for moneylife to post their ideas to curb the scams here so that we can also see if we can add value to the topic

Hemant Sharma

2 years ago

check unicity another company peddling expensive products from bangalore like binary mlm

Shankar

2 years ago

While your article highlighting the pitfalls of the amendment of the Act is commendable, I find that your reference to Saradha as a 'Chit Fund' scam is not in order. Saradha, though it call itself a chit fund, was not performing the role of a chit fund in its true sense. Much like you, Shri Gurumurthy has written quite a few articles on how this scam unfolded while at the same time making a clear distinction between a genuine chit fund and a bogus one like Saradha.

REPLY

Hemant Sharma

In Reply to Shankar 2 years ago

think strategy india is way ahead in understanding the difference and has courage to stand by its action .these guys posted 800 scams in one year on their website . commendable

Hemant Sharma

In Reply to Hemant Sharma 2 years ago

sorry forgot the link http://www.strategyindia.com/blog/scam-a...

Tex

In Reply to Hemant Sharma 2 years ago

Interesting, I didn't see Amway, Herbalife, or Qnet on that site. I sent in complaints for the first 2 of them.

Rogier van Vlissingen

2 years ago

Note the following summary of what is going on in the USA, which is the birth place of this particular white collar crime wave:
http://seekingalpha.com/article/2559565-...

also, a good account (and fun read) is E. Robert Smith's book: "Downline... an intolerable potential to deceive." It should be noted that from a standpoint of economic analysis MLM simply is a pyramid scheme dressed up with sales program that is designed to give it legitimate appearance, but in the end, saturation will depress the retail margins to zero, leading to expose the pyramid scheme. This is one reason that mature MLM companies are fighting hard against on-line sales right now, for the discounts undermine retails sales, and they'd be left with only the pyramid sales, which is all there was anyway.

REPLY

Tex

In Reply to Rogier van Vlissingen 2 years ago

Rogier,

By "online sales," you mean selling on eBay, personal web sites, etc., correct?

I don't agree with your saturation claim. 10s of millions of people turn 18 each year. If saturation were the issue, older MLMs like Avon (over 100 years) and Amway (55 years) would have saturated LONG ago. The real problem is these MLM scams DON'T saturate, they are "the gift that keeps on giving."

Rogier van Vlissingen

In Reply to Tex 2 years ago

Clearly, the saturation issue is harder, but the overall model, that they behave like a viral infection is pretty accurate. Kay Herbert on Seeking Alpha did a good piece on that recently.

And re online selling, right, the companies are going after unauthorized online sales by their distributors on online websites, in an attempt to protect their MSRP.

Tex

In Reply to Rogier van Vlissingen 2 years ago

Saturation is not only harder, it has been thoroughly discredited by the courts.

As far as I know, discounts will still be allowed on the HLF site, as they are on the Amway site. What the HLF sites do is prevent people from shopping around for the best prices by visiting multiple online personal sites.

RJ

2 years ago

What is the status now? Is this cabinet note approved?

Sunil Pratap

2 years ago

Can the PCMCS Act be useful against Adooye & other such Internet schemes?

Suiketu Shah

2 years ago

One shd not equate what Mr Jaitly is doing with that of PM.On several occasions we have seen Mr Jaitly continue doing exactly what Congress was doing.Pl give Mr Modi some time,its not even 4 months since he took power.Things are drastically going to change once Mr Modi wins Mumbai hands down 19 Oct.Pl give him atleast 18 months before judging him.

REPLY

Jai Verma

In Reply to Suiketu Shah 2 years ago

He is proposing amendment in the law which was enacted by Congress UPA how do you say that he is following congress

Atif Rahman

2 years ago

How to start MLM i.e Ponzi scheme.
Start with a small amount of seed money.(Capital).
Go to small tier-2-3-4 town in India.Put false ad and recruit local educated presantable unemployed boys/girls.
Recruit these kids at a nice hotel ,provide dinner meals ,motivating speech,future dreams blah blah.
Some will be convinced some will withdraw.
Start to convince/sell offers to folks locally by these bakra employees.
Offer high value/interest on deposits.
Collect hefty amounts...pay off the biginner investor handsomly.
Success story spreads...more people jump into bandwagon.
Collect more and more.
Once target achieved jump ship.
Local employees will be screwed.
This has been going on for years and years in new forms.
This scam is succesfull and unbeatable. You just need credibility in the begining.this is MLM.
I consider Eureka Forbes/Kent Waterfilter selling as legitimate direct selling.
Amway is a scam.
Sorry....i consider even LIC ,Sahara etc as scam.(Not term insurance).

REPLY

Tex

In Reply to Atif Rahman 2 years ago

Atif,

I agree. MLM has, in the words of former FTC Commissioner Dixon, that MLM has "an intolerable capacity to deceive." MLM should be made illegal, and only allow Direct Selling/one level.

sathya cumaran

2 years ago

sathyacumaran dhandapani
what ever the rules or body is formed unless the implementor of the rules should be honest and integrity and now its lacking in india because of politician looting these officials also loot in their capacity and rule makers become the rule brakers first of all there should be honesty sincerity and accountability which lacking until then indian cannot improve is my opioion

Ajit Patel

2 years ago

I Think There Should Be Needed Regulatory Body To Regulate Direct Selling/MLM Companies. When Insurance Companies Regulate & Develope By IRDA, Just Like This There Should Be A Body Like DSRDA(Direct Selling Regulatory & Development Authority) Nedded For Betterment Of Direct Selling Industry & Direct Sellers.

REPLY

Rogier van Vlissingen

In Reply to Ajit Patel 2 years ago

Learn a lesson from the USA. The direct selling association has been taken over by the MLM industry. Direct sales is legal, MLM for the most part is not, if it is analyzed closely. The fundamental model of chainselling is illegal in many states. Prosecution has been a mixed bag, and has been too laborious to stop MLM, but the fundamental concept is still illegal, and these companies can be prosecuted at any time, for they implicitly violate the laws and regulations. There was just another victory in the case of BurnLounge, in the 9th Circuit Court of Appeals in CA, where a pyramid finding was upheld. And currently there is a prosecution in the works of TelexFree, which was shut down as a Ponzi scheme a few months ago, and an international law enforcement collaboration is now tracking down the money and the perpetrators. If marketing programs are designed so that they money is in the recruiting, not the selling, they are pyramid schemes. Recent actions by Herbalife prove the fact that under free competition retail margins go to zero, because they have unlimited numbers of distributors. That is simply how it works economically. If you design your plan to reward recruiting, people will neglect and ultimately ignore the selling, thereby proving the economic fact that a recruiting plan = a pyramid scheme.

Pricing of essential medicines and discounts
Many drug stores, upon request, give 5% discount so as to retain the client, but mostly they do not give this reduction voluntarily
 
National Pharmaceutical Pricing Authority, a Ministry of Chemicals & Fertilisers sponsored organisation, was formed on 29 August 1997.  It has been given powers to implement and enforce the Drugs Price Control Order (DPCO) 1995/2013.
 
A visit to their web site is of interest.  It shows that NPPA advises the Government on matters of drug policies and prices. NPPA is "constantly endeavouring for abundant availability of affordable medicines for all".  The margins allowed for a wholesaler and a retailer, officially, varies between 10% and 20%.  Branded medications, for the same "disease" could be high and not controlled.  These margins are for "decontrolled" formulations.
 
According to the available information, prices are capped at an average of all medicines in a segment having more than one percent market share; for all other drugs, companies (drug manufacturers) are FREE to decide the pricing!
 
It may be recalled that on 10th July NPPA issued a notification capping prices of 108 anti-diabetic and cardiovascular drugs, on the basis of guidelines issued in May, after finding the market prices of some brands varied widely.
 
The government, in a rather sudden move, last month withdrew the power of the drug regulator, NPPA, to cap prices of non-essential drugs.  Perhaps, this was done to appease the US drug makers who have been taking up the issue of intellectual property rights (for sometime) and this matter has been a source of bitterness or has acted as a stumbling block in our trade relations with that country. It is not clear if this matter was raised at all during the recent visit of Prime Minister Narendra Modi.
 
But, in the meantime, the Indian Pharmaceutical Alliance (IPA) and the Organisation of Pharmaceutical Producers of India (OPPI) went to the court against the NPPA's move, in July.
 
According to the press reports, OPPI has moved the court challenging the notification and seeking an order preventing the government from taking any further steps in this matter.
 
As a sequel, the Delhi High Court has asked the NPPA to show the manner in which it is exercising its power to cap prices of non-scheduled drugs, "in view of the recent withdrawal of the guidelines issued for this purpose". And the High Court has directed NPPA to file an affidavit indicating framework within which prices of non-scheduled drugs are now sought to sustain in the absence of guidelines". 
 
It will be therefore in the interest of the public to await the final outcome on this issue, in the next few months.  In the meantime, there are related issues that could be discussed and debated.  Until this matter is resolved, it is presumed, status quo will continue on prices?
 
There are other issues that can be thought about, in the meanwhile.
 
First is the issue of "essential drugs".  As long as a medical practitioner diagnose a sick person and prescribes some medication for use by the patient, should we not consider that becomes "essential" for the welfare of the sick person? With the prescribed medicine, the "sick" may return to health! So, for him/her, the "medicine" prescribed is "essential"!
 
One can understand the difference between a "lifesaving drug" and a simple headache!
 
Second, most corporate bodies today have extended medical facilities to the staff, and in many cases, medical cover includes the whole family. Either the company concerned from their own pharmacy gives the medicines free or the same made available at a "staff" rate.  However, sadly, this benefit comes to a dead stop, once the person "retires" from active service.  It is possible that some well to do organisations, which truly care for their staff welfare, as a Corporate Social Responsibility, extend this till the end, and more often than not, offer employment to the son/daughter in the organisation.
 
The trouble is such organisations are few and far between.  A "retired" person becomes a family liability, not bearing to think that he/she was the bread earner, until the last day in office.  It is a pity we do not have old people's home with all facilities like many other countries.
 
The third refers to a whole lot of people, like our farmers, the backbone of India's agricultural might, who have nothing to bank upon, as they grow older! They go to village quacks to get medication if there are no dispensaries available. 
 
Fourth refers to the need of the Government Directive and the related licensing authorities (who issue shop licenses) that all medical stores must have qualified chemist who should be able to advice on generic medicines. Ministry of Health, in all the State Governments, must publicise details of Generic Medical shops so that patients can obtain competitively priced medicines in lieu of highly priced "branded" medications.
 
Finally, NPPA must make it mandatory for all priced medicines, must contain, on the package, not only the MRP Rates, but also the specially discounted rate for the Senior Citizens. The NPPA website does not show if the senior citizen's discount is 5% or 7%. Many drug stores, upon request, give 5% so as to retain the client, but they do NOT give this reduction voluntarily. NPPA can make this obligatory on the part of drug makers to print MRP and MRP for Senior Citizens.
 
It is time NPPA also prints the email address of the Organisation in their web site.  The list of senior officers, starting with the Chairman, Injeti Srinivas (phone 23746630/6639 and fax No: 23746652) and others must also show details of those who are qualified as Pharmacists.  
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
 

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COMMENTS

Padmanabha Vyasamoorthy

2 years ago

Many voluntary organisations are setting up generic medical shops that sell medicines at 50 % to 70% of MRP. Even these shops are making sufficient profits.There are more than twenty such shops in AP / TS. Without depending upon the govt philanthropic organisations must set up similar shops everywhere.

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