While Indian consumers are increasingly turning to ecommerce sites for the convenience of making purchases and the discounts they offer, as many as 38% have complained of getting fake or counterfeit products in the last year alone, reveals a survey. About 29% said they received counterfeit products from one of the leading e-commerce sites and the fakes were usually to be found in fragrances, apparel and bags, which tend to be sold at heavily discounted prices. This is a very high number for an industry that wants to attract more users.
LocalCircles, a social media platform conducted a survey, which saw participation by over 12,000 unique consumers from across India. According to the Survey, about 38% consumers in the first poll said that they have received a counterfeit product from an ecommerce site in the last one year while 45% said this has never happened to them and 17% were unsure about it.
“In the race to advertise highest discounts, most ecommerce class="ismall" sites only do basic checks on sellers and do not really perform the detailed due diligence. Many ecommerce sites in fact offer cashback schemes and additional quantity and threshold discounts to lure the consumer to shop more and finally somewhere in this process the consumer ends up shopping for a product that us counterfeit,” the Survey says.
Globally, top retailers such as Alibaba, Amazon and eBay have also struggled to weed out counterfeits and second-hand products. Counterfeit product selling is a big business worldwide amounting to almost $500 billion annually. Ecommerce platforms are realizing the problems and some of them have even taken steps to identify and remove counterfeit product listings. While many experts have predicted that India’s e-commerce market will touch $100 billion in the next 10 years, the ecommerce sites, the regulator and the consumers will have to work in-sync to fight the demon of counterfeit goods.
Responding on second question about ecommerce site from which they received a counterfeit product in the last year, about 12% named Snapdeal, 11% said Amazon and 6% said Flipkart. About 71% said they either did not shop online or did not receive a counterfeit product.
Recently, Skechers, an American footwear brand dragged e-commerce site Flipkart and four of its seller to Court for allegedly selling its counterfeit products. As per media reports, raids were later conducted in various seller warehouses in Delhi and Ahmedabad and more than 15,000 pair of fake Skechers shoes were found.
The third question asked what the ecommerce sites should be required to do by law if a product received from their site is found to be counterfeit. Around 49% said they should accept return and issue a full refund plus a penalty based on the product value while 30% said they should accept return and issue a full refund plus a fixed counterfeit penalty. About 18% said ecommerce sites should just accept return and issue a full refund while 3% consumers were unsure about what should be done, the Survey shows.
The counterfeit products shipped via ecommerce sites do not match the quality standards of the original products. This in turn, brings bad publicity to the brand eventually affecting their sales numbers.
In the following question, 34% consumers identified perfumes and other fragrances as the top category for counterfeit products on ecommerce sites while 11% identified it as shoes, 4% as sporting goods and 51% said others like fashion apparels, bags, and gadgets.
Earlier, the Delhi High Court banned a seller from using the name L'Oreal on any of its products sold on ShopClues.com, after it was reported by consumers for selling fake L’Oreal products on the site.
When asked about requirement or provision in law to blacklist any seller of counterfeit products on an ecommerce site, an overwhelming 98% respondents replied in a ‘yes’.
LocalCircles, says, “This is a reasonable ask that the consumers feel must be implemented by the Government. Such a rule will reasonably penalise seller as the ecommerce site will be required to only bar them from that particular category where they were found selling counterfeit products while still allowing them to sell in other categories.”
Paytm Mall, in mid-2017 had delisted over 85,000 sellers, in an effort to block fraudulent sellers from signing up on their platform. Flipkart in past has said it removes counterfeit items from its platforms regularly and has a ‘zero tolerance policy’ for counterfeit goods.
The last question was about reasonable counterfeit penalty that the ecommerce sellers should be liable to pay to the consumer once it is proven that the product shipped was a counterfeit. About 86% said it should be 100% of the product value, 9% said it should 50% of the product value and 4% said it should be 25% of product value.
“Most of the consumers are of the opinion that if a counterfeit product is delivered to them, then they should be refunded their entire money and at the same time, also asked to keep the product with them,” the Survey says.
Some of the consumers on the platform have also raised a strong concern suggesting that some ecommerce sites not only tend to ignore counterfeit sellers but promote such sellers as it allows them to offer the big discounts.
Genuine products of international brands cannot afford to be sold at 50-80% off, according to some consumers. A few consumers have also suggested that the Government look at a conflict of interest relationship between the ecommerce site and the counterfeit seller where the ecommerce site may have made an investment in the seller and is knowingly let such sellers sell on the platform.
LocalCircles says it will escalate all such consumer complaints the Department of Consumer Affairs and other Government departments.