48% of Online Shoppers Got Stuck with a Wrong Product: LocalCircles
Moneylife Digital Team 16 January 2025
Due to return and refund policies of platforms, as many as 48% of online shoppers got stuck with a wrong product, while 20% of online shoppers surveyed received a fake or counterfeit product at least once in the past 12 months, reveals a survey by LocalCircles. 
 
Consumers allege that some online sellers are taking advantage of the non-returnable product category and shipping different goods or, in some cases, counterfeit products. One in five such consumers surveyed confirmed receiving one or more counterfeit products just in the past 12 months, with the highest percentage of fake products sold on e-commerce platforms being in the shoes, cosmetics and fragrances categories, the community platform says.
 
 
Currently valued at US$70bn (billion), India's online shopping makes up about 7% of the country's total retail market, presenting a huge growth opportunity. In the coming years, several factors, like high internet penetration, low-cost internet services and a substantial increase in rural smartphone users, are expected to propel the sector towards a promising future, according to a report by investment promotion and facilitation agency Invest India. The report has projected that India will be the leader of the online shopping revolution, with an estimated 500mn (million) shoppers by 2030.
 
"However, the sale of counterfeit products and poor return and refund policies are the two common consumer complaints that have been posted repeatedly by online shoppers on the LocalCircles platform. One of the key processes that platforms need to handle counterfeit complaints better is returns and refunds,” LocalCircles says.
 
The LocalCircles study received over 102,000 responses from online shoppers located in over 327 districts of the country. While 63% of respondents were men, 37% of respondents were women and 41% of respondents were from tier-1, 28% from tier-2 and 31% respondents were from tier-3, tier-4 and tier-5 and rural districts. 
 
What is noteworthy is that only 39% of consumers surveyed, who received a fake or counterfeit product from an online platform, were able to get a replacement product, while 41% got stuck with it due to platform or seller terms or not raising the grievance, LocalCircles says.
 
"Also, problematic is the fact that only one in four consumers surveyed say they found a direct way on e-commerce platforms to report a counterfeit or fake product receipt, while 43% of them found no way of reporting fake products on the platforms. This works in favour of the bad sellers who are selling counterfeit by design as it delays their identification by the platform thereby leading to more consumers getting impacted," it added.
 
Recently, Flipkart was fined Rs10,000 by a district consumer redressal forum in Mumbai for refusing to take back a defective nutrition supplements product from a consumer who alleged that the product was a counterfeit. The forum stated that Flipkart's 'no return policy' was an unfair trade practice and a deficiency in service. The commission also observed that Flipkart is under obligation to ensure that the products being sold from its e-marketplace are of good quality.
 
In the survey conducted by the community platform, a section of the consumers alleges that sellers are taking advantage in the category of products with no return and some sellers are shipping different products by design as they know that the consumer does not have a return option. This practice is rampant on Meesho and Flipkart, according to the feedback received, it says.
 
When asked by LocalCircles about which platform is their favourite from a returns and refund perspective, Amazon was rated as the most preferred by a whopping 79%. In contrast, Meesho and Tata Neu was preferred by just 2% of consumers and Ajio by just 1%. Flipkart was preferred by just 3% of consumers, although its subsidiary Myntra was a favourite of 6% of consumers. 
 
"A similar exercise in the quick commerce space found that 22% of consumers preferred Big Basket for returns and refunds while 13% preferred Swiggy Instamart and Blinkit. Only 6% preferred Zepto while the highest 31% were not happy with the return and refund policies and processes of any quick commerce platform," the community platform says.
 
According to LocalCircles, the Union government needs to intervene and ensure that common standards are set for how returns and refunds are handled by platforms and how platforms handle consumer complaints of counterfeit products. 
 
"LocalCircles will escalate the findings of this survey to the central consumer protection authority (CCPA), the department of consumer affairs, bureau of Indian standards (BIS) and department for promotion of industry and internal trade (DPIIT) for their respective interventions through policies and enforcement," it added.
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